New ME Scam out of Texas????

Discussion of various forms of Advance Fee Fraud, including application fees for loans that never materialize, self-liquidating loan scams, as well as mortgage elimination scams and related debt elimination scams [Nigerian-type scams should go in the Nigerian 4-1-9 forum]
User avatar
Cathulhu
Order of the Quatloos, Brevet First Class
Posts: 1233
Joined: Wed Apr 07, 2010 4:51 pm

Re: New ME Scam out of Texas????

Postby Cathulhu » Tue Nov 08, 2011 5:10 pm

webhick wrote:I'm still hung up on the claim that they're licensed to run FBI criminal background checks, because...you know...I'm weird. Maybe I'm misunderstanding the process, but this company is not a state agency and they're not on the approved channeler's list. Can someone clarify?


Excellent question, webhick. I've done those background checks for a federal agency, and I find I wonder who the hell would hand out criminal and federal info to these bozos. And under what provision of "licensing"? Cite me some law, or I call BS.
Goodness is about what you do. Not what you pray to. T. Pratchett
Always be a moving target. L.M. Bujold

AndyK
Illuminatian Revenue Supremo Emeritus
Posts: 1299
Joined: Sun Sep 11, 2011 9:13 pm
Location: Maryland

Re: New ME Scam out of Texas????

Postby AndyK » Tue Nov 08, 2011 6:00 pm

Prof wrote:You also wrote:
If the chain of title is messed up, documents are missing, etc; the ownership of the note reverts to the last documented holder. The borrower owes the money to that holder.


This is just simply absolutely wrong. See generally Art. 3 of the UCC, which only allows a note to be enforced by a holder or transferee; prior holders who transfer to third parties retain no right of reversion -- and could not, since the obligation to that prior holder was satisfied when it transferred the note to the new holder.
...
In order for a real estate mortgage to be valid, the foreclosing lender must be able to show that it is the holder or transferee of the note secured by the mortgage. In a non-judicial foreclosure state like Texas, a foreclosure must be challenged by the debtor -- he must initial judicial process to challenge the foreclosure and force the lender to show that it owns the debt and that the mortgage (Deed of Trust) is valid and that the requirments of notice of default, etc., have been met.

In a judicial foreclosure state like Florida, the lender must sue, and must allege and be prepared to show that it is the holder or transferee of the note. Unless the lender can make that showing to a judge's satisfaction, there can be no foreclosure.


You very well clarified what I was trying to say: Whomever is trying to foreclose must be able to prove that they are the holder or transferee of the note. BUT IF THEY CAN'T, the note (and associated obligation) doesn't vanish. Someone is the last, legitimately documented holder or transferee.

It seems like Quasimodo's strategy / theory is that, if the foreclosing entity can't demonstrate that they are the legitimate holder or transferee, the borrower gets to walk away with the property and without any debt.
Taxes are the price we pay for a free society and to cover the responsibilities of the evaders

User avatar
Prof
El Pontificator de Porceline Precepts
Posts: 1209
Joined: Thu Mar 06, 2003 10:27 pm
Location: East of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Prof » Tue Nov 08, 2011 6:45 pm

No, I still disagree. The foreclosing entity must represent that it is or is acting for, in the case of a Deed of Trust, the holder of the debt. If that person does not hold the debt, the entire process is fraudulent. Only the holder or transferee is authorized to foreclose.

If the prior holder still has the note, then the current foreclosing entity is up for fraud charges.

If the note has been lost or stolen, the person asserting those rights must be a holder or transferee -- i.e., must show that at one time he had possession as a holder or transferee. If he can't show that, he can't take advantage of the "lost or stolen" provisions.

You must understand -- the actual, physical note and its actual, physical possession is crucial under Art. 3.

So, yes Virginia, someone can get a free house.

For a more organized discussion of the missing note issues, see the article at: http://www.langleybanack.com/admin/news ... 112422.DOC
"My Health is Better in November."

ArthurWankspittle
Slavering Minister of Auto-erotic Insinuation
Posts: 2652
Joined: Thu Sep 30, 2010 10:35 am
Location: Quatloos Immigration Control

Re: New ME Scam out of Texas????

Postby ArthurWankspittle » Tue Nov 08, 2011 8:57 pm

Thanks to the prof for putting me right, I'm not in the best frame of mind at present and was just replying to quasimodo "from the hip".
Can you explain this to me though.* Why does the repayment "go away"? If someone tries to foreclose and fails due to not having the note or being unable to prove previous possession of it, why is it not open for someone else to come along later and say "hey, I just found this note at the back of a filing cabinet - where's all my mortgage repayments?"
Putting it another way: Z buys a house with a mortgage from Lender A. Lender A sells a tranche of mortgages to Entity B. Entity B bundles a whole load of mortgages together and sells them to Entity C but keeps doing the mortgage servicing. Entity C sells mortgages to Corp D. Some time later B tells D that Z isn't paying his mortgage. D goes to foreclose but can't find the note. First, I don't see how this gets Z out of paying his mortgage. Second, I also don't see why this doesn't cause a chain of lawsuits between most of the parties involved.

*Where I am this sort of thing is more rigidly defined in law and procedure. Person/organisation has a "lien" (I'm translating) and it is recorded against the property (short version: if you have a "note" and you don't register it, your fault. You might still be a creditor but you can't go foreclosing to get your money.) If you manage to have an unrecorded property (rare) and there was documentation of "liens" against it you'd end up with a situation where at some point in the future someone may come along and claim to hold a "lien" on the property which would mean that no one would buy it except at a huge discount to market value. You may be left with not needing to pay off the "lien" but effectively you'd never be able to sell the place.
Going to Tibet now and deleting Facebook you have my email address

User avatar
Prof
El Pontificator de Porceline Precepts
Posts: 1209
Joined: Thu Mar 06, 2003 10:27 pm
Location: East of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Prof » Tue Nov 08, 2011 9:21 pm

Please read the article cited above.

I'll put it simply. Liens are recorded. Notes secured by liens, whether on personal or real property, are not -- and cannot be recorded with the exception of negotiable paper, an Art. 9 construct, that combines note/lien on personalty into one document.

Notes are negotiable instruments. They go from hand to hand (ACTUALLY, PHYSICAL TRANSFER, BY POSSESSION). Bearer paper, which is made payable to bearer, and not a named person, is transferred by physical transfer alone. To transfer order paper, which is made to the order of a person, is transferred by endorsement and physical possession. In other words, order paper requires both possession and a chain of title. Pay to Joe. Joe endorses Pay to John. John endorses pay to Sam, etc., etc.

Ordinarily, a note cannot be enforced by collection, foreclosure, etc., unless the party who claims to own it also has possession -- with the requisite endorsements if order paper.

So, if I find a piece of bearer paper on the ground, I can present it for payment. I could be guilty of conversion or theft, with the right facts, but I can still present it for payment. If I find a note payable to Joe and endorsed to John and I am not John, I cannot present it for payment unless I forge John's name (and forgery is a crime.)

However, if I loose the original note, I cannot enforce that debt unless I can show that I am a person entitled to enforce the note and that the original is gone. I would have to show that I received the note with necessary endorsements and became a holder, or that a holder with the necessary endorsements made a me a transferee for collection.

If I misplace the note, and can only show that the note belonged to the named payee, Joe, and allege that I got it from John, unless John can be found to verify that claim, the note is not enforceable by me. It is not enforceable by Joe, because he endorsed it to John; John cannot be found.

The mortgage cannot be enforced without the note.

Result: Free house.

I'll put it as simply as possible. Without a note or a fact situation fitting within the lost, stolen destroyed note provisions of the UCC, the debt does not exist and cannot be enforced, even if there is a valid perfected recorded gold-encrusted certified bonded bottled genuine Grade A mortgage securing the now-non existent debt.
"My Health is Better in November."

ArthurWankspittle
Slavering Minister of Auto-erotic Insinuation
Posts: 2652
Joined: Thu Sep 30, 2010 10:35 am
Location: Quatloos Immigration Control

Re: New ME Scam out of Texas????

Postby ArthurWankspittle » Tue Nov 08, 2011 10:16 pm

Prof wrote:I'll put it as simply as possible. Without a note or a fact situation fitting within the lost, stolen destroyed note provisions of the UCC, the debt does not exist and cannot be enforced, even if there is a valid perfected recorded gold-encrusted certified bonded bottled genuine Grade A mortgage securing the now-non existent debt.
That was the bit I was missing or failing to understand.

Still leaves the possibility of someone turning up with it at a later date though, doesn't it?

It also fits with the general timbre of these sorts of "mortgage investigation" types of operation. (This is what I believe George Tran was trying.) Keep trying (and keep paying us money) and if you are lucky you might find the note can't be found. Rather like duelling and relying on your opponent to accidentally shoot themselves.
Going to Tibet now and deleting Facebook you have my email address

User avatar
Prof
El Pontificator de Porceline Precepts
Posts: 1209
Joined: Thu Mar 06, 2003 10:27 pm
Location: East of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Prof » Tue Nov 08, 2011 11:34 pm

Of course, if someone else turns up with a validly transferred note, and limitations has not run, it can certainly be enforced; whether the screwed up lien position could be straightened out, I don't know.
"My Health is Better in November."

Arthur Rubin
Tupa-O-Quatloosia
Posts: 1434
Joined: Fri May 30, 2003 12:02 am
Location: Brea, CA

Re: New ME Scam out of Texas????

Postby Arthur Rubin » Wed Nov 09, 2011 4:16 am

Prof wrote:If I misplace the note, and can only show that the note belonged to the named payee, Joe, and allege that I got it from John, unless John can be found to verify that claim, the note is not enforceable by me. It is not enforceable by Joe, because he endorsed it to John; John cannot be found.

I should know that. (I don't take Property until next year, and I'm not sure that I ever will have a course covering notes.) Don't you need John even if you have the note; after all, how does the legal system know that the note wasn't forged by John (or someone else in the chain between Joe and you.)

As another side issue, suppose Joe doesn't recall endorsing it to John. (I know, Joe thought he endorsed it to John, and he has a record of receiving payment for endorsing it to John, but suppose that note in the tranche wasn't endorsed.) John isn't around to object, and you don't have a claim without John, so you have no reason to object.

And, as a further "note", you may have a claim for restitution against the homeowner. I don't know whether equitable concepts can survive those UCC provisions, and I don't know whether a judge will consider a bank worthy of the concept of equity, but there are many legal methods which could be tried. (I still don't know how Q's clients don't have a claim against Q if the method doesn't work for some reason, thereby putting Q out of business. It certainly looks as if Q is making promises to his clients which he can't keep.)
Last edited by Arthur Rubin on Wed Nov 09, 2011 4:18 am, edited 1 time in total.
Reason: Out, damn spell-check
Arthur Rubin, unemployed tax preparer and aerospace engineer
ImageJoin the Blue Ribbon Online Free Speech Campaign!

Butterflies are free. T-shirts are $19.95 $24.95 $29.95

Judge Roy Bean
Judge for the District of Quatloosia
Judge for the District of Quatloosia
Posts: 3528
Joined: Tue May 17, 2005 7:04 pm
Location: West of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Judge Roy Bean » Wed Nov 09, 2011 4:45 am

Arthur Rubin wrote: ... (I still don't know how Q's clients don't have a claim against Q if the method doesn't work for some reason, thereby putting Q out of business. It certainly looks as if Q is making promises to his clients which he can't keep.)


Ah ... herein lies the root of all such machinations.

With the gigantic boondoggle created by the perversion of the property-recordation system in the US, the opportunity for mischief is coming home to roost.

That is not to say Q's unsuspecting "clients" will end up with free-and-clear title, but after paying a few thousand dollars to play the game, along the way there will be any number of "WTF" moments in the offices of title insurers and especially the mortgage servicer foreclosure mills.

My guess is some small number of people in some states could wind up living without a house payment and will consider it a victory - for a while. Hey - a lot of people don't stay in the same place for a long time so a few months or a year while the legal system grinds away might be a good deal if you don't give a **it about your credit score.

So the business model is the "client" gambles $X,XXX.XX against $XX,XXX.XX in future house payments, hoping the securitization machine misfired and doesn't have any more rounds in the cylinder.

In some cases it's going to be a circular gunfight.

You step into the circle and you take your chances.
The Honorable Judge Roy Bean
The world is a car and you're a crash-test dummy.
The Devil Makes Three

User avatar
Kestrel
Endangerer of Stupid Species
Posts: 877
Joined: Sun Jun 05, 2011 9:09 pm
Location: Hovering overhead, scanning for prey

Re: New ME Scam out of Texas????

Postby Kestrel » Wed Nov 09, 2011 5:00 am

Prof wrote:If I misplace the note, and can only show that the note belonged to the named payee, Joe, and allege that I got it from John, unless John can be found to verify that claim, the note is not enforceable by me. It is not enforceable by Joe, because he endorsed it to John; John cannot be found.

The mortgage cannot be enforced without the note.

Permit me to come at this from a different direction.

I've faithfully paid my mortgage for umpteen years as directed by proper notice from the chain of transferees. First I paid Joe, then I paid John, and now I'm paying you. The only time I ever saw the note was when I signed it all those years ago.

Now I'm ready to move to Florida. I sell the house and the title company sends you money.

But (surprise) you don't have the note. How can I get the note released? If Joe's or John's heirs find the note in a shoebox somewhere can they come after me?
"Never try to teach a pig to sing. It wastes your time and annoys the pig." - Robert Heinlein

Judge Roy Bean
Judge for the District of Quatloosia
Judge for the District of Quatloosia
Posts: 3528
Joined: Tue May 17, 2005 7:04 pm
Location: West of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Judge Roy Bean » Wed Nov 09, 2011 5:56 am

Kestrel wrote:...

Now I'm ready to move to Florida. I sell the house and the title company sends you money.

But (surprise) you don't have the note. How can I get the note released? If Joe's or John's heirs find the note in a shoebox somewhere can they come after me?


The short answer is, yes.

Whether they can recover is yet another question.
The Honorable Judge Roy Bean
The world is a car and you're a crash-test dummy.
The Devil Makes Three

ArthurWankspittle
Slavering Minister of Auto-erotic Insinuation
Posts: 2652
Joined: Thu Sep 30, 2010 10:35 am
Location: Quatloos Immigration Control

Re: New ME Scam out of Texas????

Postby ArthurWankspittle » Wed Nov 09, 2011 9:10 am

Kestrel wrote:I've faithfully paid my mortgage for umpteen years as directed by proper notice from the chain of transferees. First I paid Joe, then I paid John, and now I'm paying you. The only time I ever saw the note was when I signed it all those years ago.

Now I'm ready to move to Florida. I sell the house and the title company sends you money.

But (surprise) you don't have the note. How can I get the note released? If Joe's or John's heirs find the note in a shoebox somewhere can they come after me?
This is the other part I am still trying to understand. (Where I am this can't happen. You sell me a piece of real estate and no lawyer would transfer it without the existing "notes" "liens" whatever that are attached being satisfied (paid).) Surely, as a minimum, this affects the market value? Equally, if you have a mortgage, won't the lender want first position in the pecking order? If you say here's a 5 bed, 3 bath triple garage house, free and clear, it has to be worth more than a 5 bed, 3 bath triple garage house that there's a note for $xxx,xxxx somewhere.
Going to Tibet now and deleting Facebook you have my email address

User avatar
JamesVincent
A Councilor of the Kabosh
Posts: 2647
Joined: Sat Oct 23, 2010 8:01 am

Re: New ME Scam out of Texas????

Postby JamesVincent » Wed Nov 09, 2011 2:40 pm

Judge Roy Bean wrote:
Kestrel wrote:...

Now I'm ready to move to Florida. I sell the house and the title company sends you money.

But (surprise) you don't have the note. How can I get the note released? If Joe's or John's heirs find the note in a shoebox somewhere can they come after me?


The short answer is, yes.

Whether they can recover is yet another question.


Now if this does occur, can the house actually be sold again? and can the party trying to sell it be liable for any missed payments since they in good faith had kept up their end of the contract and had made that last payment (the sale of the house to release the note). And then what happens to the buyers?
"Just knowing we're in the same genus makes me embarrassed to call myself Homo." Professor Farnsworth

User avatar
Prof
El Pontificator de Porceline Precepts
Posts: 1209
Joined: Thu Mar 06, 2003 10:27 pm
Location: East of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Prof » Wed Nov 09, 2011 8:07 pm

Kestrel wrote:
Prof wrote:If I misplace the note, and can only show that the note belonged to the named payee, Joe, and allege that I got it from John, unless John can be found to verify that claim, the note is not enforceable by me. It is not enforceable by Joe, because he endorsed it to John; John cannot be found.

The mortgage cannot be enforced without the note.

Permit me to come at this from a different direction.

I've faithfully paid my mortgage for umpteen years as directed by proper notice from the chain of transferees. First I paid Joe, then I paid John, and now I'm paying you. The only time I ever saw the note was when I signed it all those years ago.

Now I'm ready to move to Florida. I sell the house and the title company sends you money.

But (surprise) you don't have the note. How can I get the note released? If Joe's or John's heirs find the note in a shoebox somewhere can they come after me?


YES. So long as limitations have not run. However, then you have a claim for fraud against the servicing companies that took your payments, since you did not owe any money to them or the alleged note holder for which they allegedly collected. As explained below, this should not happen if a title company is involved.

Payment on the note creates an obligation on the recipient to credit the payments and release the debt upon payment in full. See generally Art. 3 of the UCC.
Last edited by Prof on Wed Nov 09, 2011 8:39 pm, edited 1 time in total.
"My Health is Better in November."

User avatar
Prof
El Pontificator de Porceline Precepts
Posts: 1209
Joined: Thu Mar 06, 2003 10:27 pm
Location: East of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Prof » Wed Nov 09, 2011 8:11 pm

James wrote:

Now if this does occur, can the house actually be sold again? and can the party trying to sell it be liable for any missed payments since they in good faith had kept up their end of the contract and had made that last payment (the sale of the house to release the note). And then what happens to the buyers?


No, the payment would require a release of the mortgage. If the final payment on the note did not release the mortgage, the homeowner would have a cause of action against the note servicer and the alleged note holder for fraud. Under state law, full payment requires the release of the lien. With MERS, the servicing company would probably instruct MERS to release the lien.

In a payoff situtation, where there is no closing at a title company, final payment entitles you to a delivery of the cancelled note and a release of lien, which you usually file. If you make final payment and don't get both rather immediately, HIRE A LAWYER very quickly.

In a sale to a new owner before the note is paid in full would take place in a title company in most states, and the title company will not close (or should not close) without possession of the orginal note for cancellation and a release of the old mortgage to be filed so that the new one can be recorded as the first lien.
Last edited by Prof on Wed Nov 09, 2011 8:38 pm, edited 1 time in total.
"My Health is Better in November."

User avatar
Prof
El Pontificator de Porceline Precepts
Posts: 1209
Joined: Thu Mar 06, 2003 10:27 pm
Location: East of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Prof » Wed Nov 09, 2011 8:31 pm

Arthur R. wrote:

(I don't take Property until next year, and I'm not sure that I ever will have a course covering notes.) Don't you need John even if you have the note; after all, how does the legal system know that the note wasn't forged by John (or someone else in the chain between Joe and you.)

As another side issue, suppose Joe doesn't recall endorsing it to John. (I know, Joe thought he endorsed it to John, and he has a record of receiving payment for endorsing it to John, but suppose that note in the tranche wasn't endorsed.) John isn't around to object, and you don't have a claim without John, so you have no reason to object.



You should be required to take the UCC courses -- Sales (art. 2), Negotiable Instruments and Bank Transactions (Art. 3 & 4), and Secured Transactions (Art. 9). If you are not required to take them, and Sales is often part of the first year contracts curriculum, MAKE YOURSELF TAKE THEM.

As to your questions about forgery, it's complex. Generally, see Art. 3, sections 3-401 and following. Forgery by a maker, forgery of a payee's signature and other forged endorsements are all covered. To simplify, the question is usually who is the most negligent -- the person who allowed the forgery to occur or the person who took up the note from the forger. For a fun case, see Perini Corp. v. First National Bank of Habersham County, Ga, 553 F. 2d 398 (5th Cir. 1977) (Ala., Ga., and Fla. were still in the 5th Cir. in 1977). The question presented was who was the most negligent, Perini, who allowed blank checks and a check writing facsimile machine to be stolen or the Bank, which took the forged checks from a man wearing an obviously fake Foo Manchu mustache, bell bottoms, and Cuban heels.

There is a back story here about the Covette driving woman doctor and a shoot out involving .45 pistols, gut I have lost it. 100 Q to anyone who can find the cite or copy of the article.
"My Health is Better in November."

quasimodo

Re: New ME Scam out of Texas????

Postby quasimodo » Thu Nov 10, 2011 5:56 am

ArthurWankspittle wrote: Case number?

This is all public information.
D-1-GN-11-001991

Judge Roy Bean
Judge for the District of Quatloosia
Judge for the District of Quatloosia
Posts: 3528
Joined: Tue May 17, 2005 7:04 pm
Location: West of the Pecos
Contact:

Re: New ME Scam out of Texas????

Postby Judge Roy Bean » Thu Nov 10, 2011 6:33 am

JamesVincent wrote:...
Now if this does occur, can the house actually be sold again? and can the party trying to sell it be liable for any missed payments since they in good faith had kept up their end of the contract and had made that last payment (the sale of the house to release the note). And then what happens to the buyers?


A phalanx of questions that boil down to a conundrum that is almost paralyzing some real estate markets.

What so many in the political realm don't want to deal with is they and their predecessors, at the behest of the lending industry, have promulgated a mechanism which has generated unpredictable results.

As long as the opportunists are in charge in Washington, the rules will be developed to their advantage with little regard to the victims of what may or may not be unintended consequences.

Collateral damage is acceptable as long as it doesn't touch the right folks.
The Honorable Judge Roy Bean
The world is a car and you're a crash-test dummy.
The Devil Makes Three

User avatar
Kestrel
Endangerer of Stupid Species
Posts: 877
Joined: Sun Jun 05, 2011 9:09 pm
Location: Hovering overhead, scanning for prey

Re: New ME Scam out of Texas????

Postby Kestrel » Thu Nov 10, 2011 7:27 am

Prof wrote:In a sale to a new owner before the note is paid in full would take place in a title company in most states, and the title company will not close (or should not close) without possession of the orginal note for cancellation and a release of the old mortgage to be filed so that the new one can be recorded as the first lien.

Following this one through to the logical conclusion...

I've got a buyer. The've got their mortgage approval. The title company schedules the closing.

Then MY mortgage servicer, which is a tertiary successor to the original mortgage company, tells the title company, "Whoops... we don't have the note... and we don't know who does..."

(In these days when nearly everything else is reduced to an electronic document, I'd think mortgage transfer records could be handled the same way.)

So am I basically screwed? No note, no closing, pissed off buyer backs out and demands his deposit be returned... And now, instead of closing on the new house I planned to buy in Florida, I'm stuck with the vacant old house back in Port Foozle and trying to find a lawyer to sue the mortgage servicer?

Lovely... Just lovely...
"Never try to teach a pig to sing. It wastes your time and annoys the pig." - Robert Heinlein

Arthur Rubin
Tupa-O-Quatloosia
Posts: 1434
Joined: Fri May 30, 2003 12:02 am
Location: Brea, CA

Re: New ME Scam out of Texas????

Postby Arthur Rubin » Thu Nov 10, 2011 12:50 pm

Prof wrote:You should be required to take the UCC courses -- Sales (art. 2), Negotiable Instruments and Bank Transactions (Art. 3 & 4), and Secured Transactions (Art. 9). If you are not required to take them, and Sales is often part of the first year contracts curriculum, MAKE YOURSELF TAKE THEM.

Sales and Property are separate required courses, but not first year. I don't know exactly what's covered. So far, in Contracts I, we've discussed UCC 2, but only 2-204 through 2-207 in detail.
Arthur Rubin, unemployed tax preparer and aerospace engineer
ImageJoin the Blue Ribbon Online Free Speech Campaign!

Butterflies are free. T-shirts are $19.95 $24.95 $29.95


Return to “Advance Fee Fraud and Mortgage & Debt Elimination”

Who is online

Users browsing this forum: No registered users and 1 guest