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mr.yet · Jan 18, 2006, 01:33 PM

I friend has a problem with mortgage. He refinanced with mortgage1 and at settlement, his papers at notice of assignment to mortgage2. He paid for 5 months and received document in the mail stating, Paid in full and satisfied. Those documents are the original promissory note and deed of trust.

1. Now the first mortgage co1. Who sold it to mortgage co2, is taking him to court for a declaratory judgment, as they claim an error occurred at settlement. They want to have copies certified as originals.

2. He signed Errors and omission form to cooperate. He states he did cooperate at settlement and complied.

3. He has tried to settle this matter but they want too many things, no jury trial, gag order, if error occurred again he would have to pay them to fix it.

4. Mortgage co2, as never send any request for payment, no notice of foreclosure, nothing.

5. Latest twist is a third co. claiming to have the note, and demanding payment.

6. Who holds the note??

7. It is stalled in court right now. Trying to find suggestion for him on how to proceed.

Not asking legal advice

LisaB4657 · Jan 18, 2006, 02:13 PM

The first thing I would do is have a title search performed on the property to see who the current lienholder is. If there is a mortgage showing up, contact that company to see if they are holding the original note.

With regard to the note, tell your friend to tell each company that he will deal only with the company who is holding the original note, which they must show him. Since he signed an Errors and Omissions Agreement he is obligated to work with that company to fix the errors. But he should not sign any new notes, or have any copies certified as originals, until he is provided with the original note. (The original note can be given to a title company, escrow company or an attorney to be held in escrow until he signs any new documents that are required. But the original note must be returned to him and destroyed simultaneously with the signing.)

This can be a very complex situation that could create a major title problem for him in the future, and make him liable for more money than he borrowed. I strongly recommend that he retain the services of a real estate attorney in his area to get this cleared up.

mr.yet · Jan 18, 2006, 02:16 PM

Title search complete, deed of trust never recorded. No ucc-1 recorded with state

DrJ · Jan 18, 2006, 02:25 PM

To complex for me... but if you are having trouble finding the right advice, I would contact a company called Legal Advice Line. They are very credible and have been around for like 15 years. Its $35 per call but you can have as many legal questions answered as you want. Look them up t legaladviceline.com

(no, I don't work for them lol they are just a really good resource for cheap legal advice)

LisaB4657 · Jan 18, 2006, 02:26 PM

Interesting. Whoever closed that mortgage on behalf of the lender really messed up.

But the important thing is that your friend still owes money to someone. The question is who is entitled to be repaid. I still think it would be best if your friend had an attorney to represent him

I just read your question again and I see that the first time around I missed the fact that the original note has already been returned to your friend. Since he no longer has to worry about that, things become much easier. He can do one of two things:

1. Ask the third company for proof that the note was assigned to them, and then pay that company when/if they provide that proof; or

2. Reach an agreement with the first company to make payment, but as a condition of payment they must indemnify him and hold him harmless if anyone else comes along with a valid claim for payment on that loan.

But it would still be best if he had an attorney to handle this for him.

mr.yet · Jan 18, 2006, 02:32 PM

He started this process over a year go, it is stalled in the court, he request a jury trial, and only the attorney for the plaintiff was showed up in court, plaintiff was not appeared in the 3 previous hearing on motions. My friend at the last hearing on motion, was challenged the jurisdiction o the court to hear the suit, since the court has not been empower by the plaintiff to do so.
I have researched some of my books, it seems, he my stalled this matter for quite some time.

By the way, he did file Motion to Dismiss lack of subject matter and personal jurisdiction, judge has not rule on the point yet.

LisaB4657 · Jan 18, 2006, 02:36 PM

Your friend is making things harder for himself. Does he dispute that he owes the money? Or is he just trying to make sure that he pays the right party?

mr.yet · Jan 18, 2006, 02:41 PM

Trying to ensure that the proper party is paid, the first mortgage co. he tells me, they refuse to cooperate in anyway. The mortgage was sold to the second company, right after settlement. Signed, sealed and endorse. Without recourse.

Also Title Company has refuse to help, he did pay for title insurance.

LisaB4657 · Jan 18, 2006, 02:48 PM

If mortgage co. 1 sold and assigned the mortgage to mortgage co. 2, then mortgage co. 1 should have no claim. But still, your friend is making things harder for himself by refusing to get an attorney. A jury trial isn't essential for a case like this and in fact a decision by a judge would probably be better. As for jurisdiction, why would your friend want to contest it? All of these things that your friend is doing is serving the purpose of stalling the trial proceedings and increasing the plaintiff's legal costs. If it is eventually determined by the court that your friend was doing these things on purpose, the judge could rule that your friend is responsible for the plaintiff's legal fees regardless of the outcome of the trial. Tell your friend to get an attorney before he creates a bigger problem than already exists.