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justwondering68 · Oct 19, 2013, 08:45 PM

Bank A refinanced the mortgage on a home. After a few years Bank A assigned the deed to Bank B but held the mortgage. After 18 months Bank A still holds the blue ink mortgage note, while Bank B is on the deed. Is this legal and who actually has rights to the property?

LisaB4657 · Oct 19, 2013, 08:52 PM

Could you please tell us your location (state, country) and what type of deed you're talking about? Is it a deed of trust or a deed of ownership?

AK lawyer · Oct 19, 2013, 10:15 PM

I assume that by "blue ink mortgage note", OP means the original note. But as Lisa indicates we need to know if it's a deed of trust or a mortgage, and what state it is in which the property is located.

justwondering68 · Oct 19, 2013, 11:28 PM

TN, USA. Yes original signed note and it has been viewed recently in Bank A's possession. Bank A assigned the property deed to Bank B 18 months ago through the Registrar of Deeds in my County.

AK lawyer · Oct 20, 2013, 05:51 AM

Originally Posted by justwondering68

TN, USA. Yes original signed note and it has been viewed recently in Bank A's possession. Bank A assigned the property deed to Bank B 18 months ago through the Registrar of Deeds in my County.

The borrower normally has the deed, not the lender. So for the lender to "assign the deed" to another lender makes no sense at all. That's why Lisa asked you if you mean deed of trust (which is something like a mortgage).

If the banks have the deed, the mortgage has been foreclosed and the note cancelled. So Bank A can do anything it wants with the deed.

Or, if it's really a deed of trust you are talking about, Bank B, as the beneficiary by assignment could present an affidavit of default to the trustee and institute foreclosure. At some point, probably when the sale occurs, the note shoud be delivered to the trustee for cancellation I suppose. My state is an anti-deficiency deed of trust state, so cancellation of the note is unimportant there.

LisaB4657 · Oct 20, 2013, 06:51 AM

If you're talking about a deed of trust rather than the deed of ownership, then it's possible that Bank A assigned the loan to Bank B but Bank A is still servicing the loan, which means that the payments are made to Bank A for the benefit of Bank B.

If this is a case where there was a foreclosure then it sounds like Bank A foreclosed and then transferred the property to Bank B. In such a case the loan would no longer exist and Bank B would be the owner.

ScottGem · Oct 20, 2013, 08:32 AM

As noted, you need to explain the situation in greater detail. The organization that services a loan can be different from whomever holds the note. But the lender doesn't own the property in ordinary circumstances. They just have a lien.

justwondering68 · Oct 20, 2013, 08:36 AM

No foreclosure, no default, all payments current... just that the mortgage note is held by one and the deed assigned to another(which is a trust closed in 2008 per SEC filing and assignment happened in 2011).

LisaB4657 · Oct 20, 2013, 08:39 AM

Originally Posted by justwondering68

No foreclosure, no default, all payments current... just that the mortgage note is held by one and the deed assigned to another(which is a trust closed in 2008 per SEC filing and assignment happened in 2011).

Okay, it sounds like the deed of trust was assigned from Bank A to Bank B but Bank A retained the right to service the loan. That means that Bank A collects the payments for the benefit of Bank B. That's legal and is very common. The rights to the property should not have changed from the terms that were in place when you financed the property.