7/27/2019 Example Flow From Real Estate Closing to Foreclosure

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ACTUAL CASE: FLOW FROM REAL ESTATE CLOSING TO FORECLOSURE

At Real EstateClosing: Borrowersigns: PromissoryNote promising

to pay GBCompany Security Deed orDeed of Trust (deedto secure debt)

America Servicing Company (ownedby Wells Fargo) buys Servicing Rights(responsible for collecting money forthe promissory note holder.)

ASC failed to respond to borrowerwho offered full payment rushed

toforeclosure. Request for promissorynote(legally required by attorneys toforeclose)denied.borrower.

Fraudulent DocumentRecorded in CobbCounty:Assignment ofBeneficial Interest inSecurity Deed -- fromMERS to Wells Fargo

Associate attorneys fromthe foreclosing law firmsignedas officers of MERS.

Also Notary did notwitness signatures.Stamp dated > 4 yearsfrom date signed.

GB Company sellsPromissory Noteto Nations Bank(Security deed shouldbe transferred with

Note)

Note is bundled with5.000 other Notesto make asecuritiespackageMortgageBackedSecurities(MBSs)

Multiple bundles ofMBSs arepackaged intoCollateralizedMortgageObligations(CMOs)

CMO

MBS MBS

MBS MBS

MBS

MBS

CMOsSold toInvestorsandInvestment Houses

Notes: Required documentsbefore foreclosing entity(attorney) can legallyforeclose: Original (not copy) wet ink

promissory note signed byborrower at closing endorsed(signed/notarized) insequence from the mortgageeto the foreclosing party. Or,absolute proof of loss of note(per UCC Section 3-309).

Assignments of BeneficialInterest in Deed to Secure Debt

in sequence - frommortgagee to foreclosingentity

Signed and notarized Deed

of Trust or Security Deed(with recording information)

Copy of modifications ofthe Note (with recordinginformation). Accurate accountingof payments andcharges.

Security Deed or Deed ofTrust has to have a legitimate

Power of Sale provision.CAUTION: Why is it theBorrower's right to demand

proof that theforeclosing entityis the legal noteholder? In theeventthe judge allows a "copy" tobe submitted, the Borrowerwillbe at risk because theoriginal noteholder couldlater comeforward demanding payment.

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American Home Mortgagebuys Servicing Rights(responsible for collectingmoney for the promissorynote holder.)

Irwin Mortgage buysServicing Rights

(responsible for collectingmoney for the promissorynote holder.)

Mortgage ElectronicRegistration Systems(MERS):Electronic registry formed byheads of mortgage bankingindustry to track ownershipand servicing rights inmortgages. Avoids feesassociated w/ recording inpublic registry.

MERS registers SecurityDeed or Deed of Trust(deed to secure the note)while servicing rights aretransferred from one entity tothe other. It never legallyholds the Promissory Noteand therefore has nobeneficial interest in theNote. (See Exhibit onMERS)

Investment Houses:Bear StearnsLeaman BrothersGoldman SachsMerrill LynchOther Investors:Deutche BankGroups of banksPrivate Individuals

Important:These Investors aresupposed to hold theoriginal PromissoryNote signed at closing,not a copy.

GovernmentBailout