I have been studying this issue all week as it applies to the transfer of servicing and note ownership.Â This case study comes from my own situation. Â Can anyone comment on this or shed some light on questions I have regarding â€œMERSâ€, the conflict between the â€œnote holderâ€ and the â€œbeneficiaryâ€?Â Who owns my loan?Â
When a payment is made to Countrywide as servicer who is entitled to the money?Â If the loan were to be paid off, who receives the proceeds?Â Who is actually entitled to the proceeds?Â I understand that is it the â€œnote holderâ€.Â So actually holds my note?Â Is it â€œMERSâ€, Greenpoint Mortgage, Countrywide or is it CAPITAL ONE?
Outline of Specific Facts
There are two parts to a home loan.Â The Promissory Note and the Trust Deed.Â There is a company or â€œservicerâ€ designated to collect your monthly mortgage payment, manage your escrow account and keep accounting of your payments and payment history.Â This company may or may not be the holder of the Promissory Note however.Â
The borrower is required to be notified in writing at least 15 days in advance of any change in servicing including the name and address you are to make your payments to beginning on a specified date.
The borrower is NOT required to be notified of any change of who the holder of your Promissory note is or who the current owner of your loan is.
With that said, here is my case:
As of 4/22/04, the original beneficiary named on my note or â€œnote holderâ€ is Greenpoint Mortgage. Â Â The lender named on the deed of trust is Greenpoint Mortgage.Â The Trustee named on my deed of trust is Marin Conveyancing Corp. and â€œMERSâ€ is named as the beneficiary under the deed of trust.Â
As of 7/9/08 as noted on the N.O.D. the name of the â€œcreditorâ€ to whom the debt is owed is Greenpoint Mortgage.Â Â The name of the beneficiary is â€œMERSâ€ and the name of the Trustee is Marin Conveyancing Corporation.
As of 10/27/08 as noted on the N.T.S. the name of the â€œbeneficiaryâ€ is â€œMERSâ€ and the name of the Trustee is Old Republic National Title. Â (Makes no mention of Greenpoint Mortgage.)
The Substitution of Trustee dated 10/13/08 attached to the N.T.S. states that the name of the Beneficiary is Greenpoint Mortgage Funding and the name of the Trustee is Old Republic National Title Insurance.Â (Does this imply that â€œMERSâ€ is no longer the beneficiary even though they are currently listed as such on the NTS?)
As of 12/9/08 the Notice of Transfer of Servicing states that the servicing of my loan is transferred from Greenpoint Mortgage to Countrywide Home Loans.Â Countrywide states that owner of my loan is CAPITAL ONE.Â (Does this imply that CAPITAL ONE is the beneficiary even though is makes no mention of this on the N.O.D. or N.T.S.?)
The following was written by Neil F. Garfield as part of an attorneyâ€™s group that follows all the latest findings and changes as it applies to what we call â€œThe Mortgage Meltdownâ€ and it prompted me to review my documents once again to attempt to track my chain of title with regards to â€œMERSâ€.Â I also included information I thought you would find interesting regarding issues that are mounting in regards to title insurers and table funding.
Mortgage Electronic Registration Systems was invented by the financial services industry as an illegal scheme to avoid recording changes in ownership of the mortgage rights, changes in Trustees, assignments etc. Arizona law requires any interest in real estate to be recorded. The reason for the recording requirement, besides revenue, is simple â€” it is the only way to keep track of who owns which property. MERS (currently banned in the State of California and under attack in at least 2 dozen other states) is a cloak which the financial services industry is using to avoid paying the taxes, stamps and fees on each step of the securitization process, plus a way to obfuscate the real ownership and to essentially choose later who will be designated to be the â€œownerâ€ of the mortgage rights â€” i.e., who will be said to own the mortgage note and thus be a successor to the beneficiary under the Deed of Trust.
The fact remains that companies are getting certificates of title transferred to them when there is nothing in the record to support the chain of title. Thus Arizona faces an enormous challenge and potential lawsuits in failing to enforce its recordation laws. One day, in the not distant future, some lawyer is going to take a close look at these transactions and realize that not one of the modification, refinancings, short sales, foreclosure sales and subsequent third party sales is supported by a proper chain of title in the record. The effect on the solvency of title insurers is immeasurable.
Note that in table funded loans of this sort the real lender is not the named payee on the note or the named beneficiary on the deed of trust â€” but it is the source of funds. The named payee on the note, the beneficiary under the deed of trust was paid an extra fee to drop its underwriting standards in favor of whatever was dictated by the securitizers, which makes the securitizers the successor trustee, successor beneficiary and possibly the successor payee. It means that companies are operating as â€œtrusteesâ€ when they have failed to register or qualify as Trust Companies.