The following letter was made available to me. It was sent to the North Carolina Attorney General by a couple from Hickory. This letter gets to the heart of the matter and goes a long way towards explaining the plight of North Carolina Citizens who have residences with outstanding mortgages. I think that we should all make our concerns known to Attorney General Cooper. In the end, will he represent the interests of the average primary residence mortgage note holder or the Banking Interests involved in the financial and debt lending industry in our State.
October 10, 2010
North Carolina Attorney General
9001 Mail Service Center
Raleigh, NC 27699-9001
Subject: Foreclosure Fraud within North Carolina
Dear Attorney Cooper,
First let us commend you on your current efforts to stop the fraudulent foreclosures by banks and mortgage companies occurring within our state. We encourage you to participate in the multi-state task force of attorney generals just beginning to organize to come up with common solutions to this mess recently exposed in various litigation occurring across our country. We do want to ensure you are aware of a broad fraud that is occurring that many of our state's homeowners are exposed to. We're talking about the scam organization that the banking industry put in place in order to rob our state of millions of dollars of recording fees. This organization called Mortgage Electronic Registration Services (MERS) may in fact be the root cause of this mess we are in.
Multitudes of North Carolina homeowners have MERS written into their Deeds of Trust (DOT) as “nominees” for their lenders and “beneficiaries” of the DOT. As numerous Judges have pointed out, MERS specifically disclaims any interest in the obligation, note or DOT. Even the language of the Deed of Trust says MERS is mentioned in name only and that the Lender is someone else. These Judges who have considered the issue have come up with one conclusion, an assignment from a party with no right, title or interest has nothing to assign. The assignment may look good on its face but there still is the problem that nothing was assigned. If MERS was there in name only to permit transfers and other transactions off-record (a detriment to our state) and if the original party named as a Lender is no longer around, then what you have is a gap in the chain of custody and chain of title with respect to the creditors side of the loan. It is all off record which means it is a question of fact as to who owns the loan. The vary presence of MERS makes it a judicial question which means that the non-judicial election should not be available.
So when you put this all together, you end up with the following inescapable conclusions:
1. The naming of MERS as beneficiary in a deed of trust is a nullity.
2. MERS has no right, title or interest in any loan and even if it did, it disclaims any such interest on its own website.
3. The lender might be the REAL beneficiary, but that is a question of fact so the non-judicial foreclosure option should not be available.
4. If the lender was not the creditor, it isn’t the lender because it had no right to title or interest either, legally or equitably.
5. Without a creditor named in the security instrument intended to secure the obligation, the security was never perfected.
6. Without a creditor named in the security instrument intended to secure the obligation, the obligation is unsecured as to legal title.
7. Since the only real creditor is the one who advanced the funds (the investor(s)), they can enforce the obligation by proxy or directly. Whether the note is actually evidence of the obligation and to what extent the terms of the note are enforceable is a question for our courts to determine.
8. The creditor only has a claim if they would suffer loss as a result of the indirect transaction with the borrower. If they or their agents have received payments from any source, those payments must be allocated to the loan account. The extent and measure of said allocation is a question of fact that should be determined by our courts.
9. Once established, the allocation will most likely be applied in the manner set forth in the note, to wit: (a) against payments due (b) against fees and (c) against principal, in that order.
10. Once applied against payments due, the default vanishes unless the allocation is less than the amount due in payments.
11. Once established, the allocation results in a fatal defect in the notice of hearing, the statements sent to the borrower, and the representations made to our Superior Clerk of Courts. Thus at the very least they must vacate all foreclosure proceedings and start over again.
12. If the allocation is less than the amount of payments due, then the investor(s) collectively have a claim for acceleration and to enforce the note, but they have no claim on the deed of trust. By intentionally NOT naming parties who were known at the time of the transaction the security was split from the obligation. The obligation became unsecured.
13. The investors MIGHT have a claim for equitable lien based upon the circumstances that BOTH the borrower and the investor were the victims of fraud. This mess is very convoluted and will have a severe impact to our state. I believe our Clerk of Courts are not equipped to handle these complex issues. Appellate Judge Carl R. Fox of the Wake County Superior Court in the decision of the foreclosure of a Deed of Trust executed by Hannia M. Adams and H. Clayton Adams reaffirmed that “while a power of sale provision is meant to function as a more expeditious and less expensive alternative to a foreclosure by action, In re Foreclosure of Brown, 156 N.C. App. 477, 486, 577 S.E.2d 398, 404 (2003), foreclosure under a power of sale is not favored in the law, and its exercise will be watched with jealousy. In reForeclosure of Goforth Props., Inc., 334 N.C. 369, 375, 432 S.E.2d 855, 859 (1993) (internal quotation marks
Please make proper use of our North Carolina court system in resolving this mess a part of your proposed solution going forward.
You can help people save their homes!
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