MORTGAGE RIGHTS
 The New Foreclosure Defenses Attacking the Chain of Title
Your Right to Obtain the Chain of Title The first hurdle you may face is obtaining a record of all transfers of the note. Remember, if the note is endorsed to order, to bearer or in blank, the note is negotiated simply by giving the next party physical possession of the note. Nothing need be written on the note to record the passage of the note. In other words, you cannot trace the history of the transfers by looking at the face of the note. You will have to take discovery to obtain the complete chain of title. Plaintiffs in foreclosure cases often balk at producing this evidence. Plaintiffs argue a borrower who is in default on his or her loan suffers no prejudice from foreclosure by an unauthorized party, since the actual holder of the beneficial interest on the deed of trust could equally well have foreclosed on the property. Homeowners, however, can face double liability if a party not entitled to enforce the note is allowed to foreclose. The homeowners payment to a party that is not entitled to enforce the note does NOT satisfy the obligation. If a homeowners pays a wrong party, a proper holder of the note could demand payment, exposing the homeowner to double liability. As the California Supreme Court held in Yvanova v. New Century Mortgage, page 22 (copy in Materials), "The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security." Notes can be made payable to a specific person or company by either(1) the maker making the note payable to the identified person or company; or (2) by another holder naming the person or company in an endorsement of the note. These notes are called "order paper." If an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder. There are a number of mistakes that can be made during this process. Order paper must be endorsed by someone with authority to transfer the note. Endorsement by a person without authority is ineffective. The loan documents, the Pooling and Servicing Agreement, or state law will tell you who has authority to endorse a note. It is possible that the order paper was sent to the securitization trust without being endorsed. When this happens, the trust is not a holder of the note. The trust can correct the problem by demanding an endorsement by the party that attempted to transfer the order paper to it, but the order paper may be overdue when it demands the endorsement. Notice that the order paper was in default when the trust obtained it may prevent the trust from being a holder in due course. If it loses holder in due course status, the trust may be liable for misdeeds committed by the original lender and other holders in the chain of title. Look carefully at the endorsement. If it does not have the words, "to the order of," it is not a negotiable instrument. Pay to Hometown Bank is not order paper because it does not contain the magic words, "to the order of." If a bank acts as trustee for a securitization trust, the endorsement must be to the bank in its capacity as a trustee. For example, the endorsement would be to Hometown Bank, as trustee for the XYZ Trust. Be certain to check the name of the trust against the caption in your foreclosure case. If the trusts are not the same, you can argue that the named plaintiff does not have standing to foreclose your mortgage. Another thing to watch is the timing of the endorsement. I discuss standing issues that can be caused by a late endorsement in Standing at the Time the Foreclosure Is Filed.
NEXT: Standing At the Time the Foreclosure Is Filed
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
 The New Foreclosure Defenses Attacking the Chain of Title Your Right to Obtain the Chain of Title The first hurdle you may face is obtaining a record of all transfers of the note. Remember, if the note is endorsed to order, to bearer or in blank, the note is negotiated simply by giving the next party physical possession of the note. Nothing need be written on the note to record the passage of the note. In other words, you cannot trace the history of the transfers by looking at the face of the note. You will have to take discovery to obtain the complete chain of title. Plaintiffs in foreclosure cases often balk at producing this evidence. Plaintiffs argue a borrower who is in default on his or her loan suffers no prejudice from foreclosure by an unauthorized party, since the actual holder of the beneficial interest on the deed of trust could equally well have foreclosed on the property. Homeowners, however, can face double liability if a party not entitled to enforce the note is allowed to foreclose. The homeowners payment to a party that is not entitled to enforce the note does NOT satisfy the obligation. If a homeowners pays a wrong party, a proper holder of the note could demand payment, exposing the homeowner to double liability. As the California Supreme Court held in Yvanova v. New Century Mortgage, page 22 (copy in Materials), "The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security." Notes can be made payable to a specific person or company by either(1) the maker making the note payable to the identified person or company; or (2) by another holder naming the person or company in an endorsement of the note. These notes are called "order paper." If an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder. There are a number of mistakes that can be made during this process. Order paper must be endorsed by someone with authority to transfer the note. Endorsement by a person without authority is ineffective. The loan documents, the Pooling and Servicing Agreement, or state law will tell you who has authority to endorse a note. It is possible that the order paper was sent to the securitization trust without being endorsed. When this happens, the trust is not a holder of the note. The trust can correct the problem by demanding an endorsement by the party that attempted to transfer the order paper to it, but the order paper may be overdue when it demands the endorsement. Notice that the order paper was in default when the trust obtained it may prevent the trust from being a holder in due course. If it loses holder in due course status, the trust may be liable for misdeeds committed by the original lender and other holders in the chain of title. Look carefully at the endorsement. If it does not have the words, "to the order of," it is not a negotiable instrument. Pay to Hometown Bank is not order paper because it does not contain the magic words, "to the order of." If a bank acts as trustee for a securitization trust, the endorsement must be to the bank in its capacity as a trustee. For example, the endorsement would be to Hometown Bank, as trustee for the XYZ Trust. Be certain to check the name of the trust against the caption in your foreclosure case. If the trusts are not the same, you can argue that the named plaintiff does not have standing to foreclose your mortgage. Another thing to watch is the timing of the endorsement. I discuss standing issues that can be caused by a late endorsement in Standing at the Time the Foreclosure Is Filed.
 MORTGAGE RIGHTS
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
 The New Foreclosure Defenses Attacking the Chain of Title Your Right to Obtain the Chain of Title The first hurdle you may face is obtaining a record of all transfers of the note. Remember, if the note is endorsed to order, to bearer or in blank, the note is negotiated simply by giving the next party physical possession of the note. Nothing need be written on the note to record the passage of the note. In other words, you cannot trace the history of the transfers by looking at the face of the note. You will have to take discovery to obtain the complete chain of title. Plaintiffs in foreclosure cases often balk at producing this evidence. Plaintiffs argue a borrower who is in default on his or her loan suffers no prejudice from foreclosure by an unauthorized party, since the actual holder of the beneficial interest on the deed of trust could equally well have foreclosed on the property. Homeowners, however, can face double liability if a party not entitled to enforce the note is allowed to foreclose. The homeowners payment to a party that is not entitled to enforce the note does NOT satisfy the obligation. If a homeowners pays a wrong party, a proper holder of the note could demand payment, exposing the homeowner to double liability. As the California Supreme Court held in Yvanova v. New Century Mortgage, page 22 (copy in Materials), "The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security." Notes can be made payable to a specific person or company by either(1) the maker making the note payable to the identified person or company; or (2) by another holder naming the person or company in an endorsement of the note. These notes are called "order paper." If an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder. There are a number of mistakes that can be made during this process. Order paper must be endorsed by someone with authority to transfer the note. Endorsement by a person without authority is ineffective. The loan documents, the Pooling and Servicing Agreement, or state law will tell you who has authority to endorse a note. It is possible that the order paper was sent to the securitization trust without being endorsed. When this happens, the trust is not a holder of the note. The trust can correct the problem by demanding an endorsement by the party that attempted to transfer the order paper to it, but the order paper may be overdue when it demands the endorsement. Notice that the order paper was in default when the trust obtained it may prevent the trust from being a holder in due course. If it loses holder in due course status, the trust may be liable for misdeeds committed by the original lender and other holders in the chain of title. Look carefully at the endorsement. If it does not have the words, "to the order of," it is not a negotiable instrument. Pay to Hometown Bank is not order paper because it does not contain the magic words, "to the order of." If a bank acts as trustee for a securitization trust, the endorsement must be to the bank in its capacity as a trustee. For example, the endorsement would be to Hometown Bank, as trustee for the XYZ Trust. Be certain to check the name of the trust against the caption in your foreclosure case. If the trusts are not the same, you can argue that the named plaintiff does not have standing to foreclose your mortgage. Another thing to watch is the timing of the endorsement. I discuss standing issues that can be caused by a late endorsement in Standing at the Time the Foreclosure Is Filed.
 MORTGAGE RIGHTS
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.
 The New Foreclosure Defenses Attacking the Chain of Title Your Right to Obtain the Chain of Title The first hurdle you may face is obtaining a record of all transfers of the note. Remember, if the note is endorsed to order, to bearer or in blank, the note is negotiated simply by giving the next party physical possession of the note. Nothing need be written on the note to record the passage of the note. In other words, you cannot trace the history of the transfers by looking at the face of the note. You will have to take discovery to obtain the complete chain of title. Plaintiffs in foreclosure cases often balk at producing this evidence. Plaintiffs argue a borrower who is in default on his or her loan suffers no prejudice from foreclosure by an unauthorized party, since the actual holder of the beneficial interest on the deed of trust could equally well have foreclosed on the property. Homeowners, however, can face double liability if a party not entitled to enforce the note is allowed to foreclose. The homeowners payment to a party that is not entitled to enforce the note does NOT satisfy the obligation. If a homeowners pays a wrong party, a proper holder of the note could demand payment, exposing the homeowner to double liability. As the California Supreme Court held in Yvanova v. New Century Mortgage, page 22 (copy in Materials), "The borrower owes money not to the world at large but to a particular person or institution, and only the person or institution entitled to payment may enforce the debt by foreclosing on the security." Notes can be made payable to a specific person or company by either(1) the maker making the note payable to the identified person or company; or (2) by another holder naming the person or company in an endorsement of the note. These notes are called "order paper." If an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its endorsement by the holder. There are a number of mistakes that can be made during this process. Order paper must be endorsed by someone with authority to transfer the note. Endorsement by a person without authority is ineffective. The loan documents, the Pooling and Servicing Agreement, or state law will tell you who has authority to endorse a note. It is possible that the order paper was sent to the securitization trust without being endorsed. When this happens, the trust is not a holder of the note. The trust can correct the problem by demanding an endorsement by the party that attempted to transfer the order paper to it, but the order paper may be overdue when it demands the endorsement. Notice that the order paper was in default when the trust obtained it may prevent the trust from being a holder in due course. If it loses holder in due course status, the trust may be liable for misdeeds committed by the original lender and other holders in the chain of title. Look carefully at the endorsement. If it does not have the words, "to the order of," it is not a negotiable instrument. Pay to Hometown Bank is not order paper because it does not contain the magic words, "to the order of." If a bank acts as trustee for a securitization trust, the endorsement must be to the bank in its capacity as a trustee. For example, the endorsement would be to Hometown Bank, as trustee for the XYZ Trust. Be certain to check the name of the trust against the caption in your foreclosure case. If the trusts are not the same, you can argue that the named plaintiff does not have standing to foreclose your mortgage. Another thing to watch is the timing of the endorsement. I discuss standing issues that can be caused by a late endorsement in Standing at the Time the Foreclosure Is Filed.
 MORTGAGE RIGHTS
The site does not provide legal advice. Neither Susan LaCava nor her law firm, LaCava Law, S.C., represent you until there is a signed retainer agreement.  MORTGAGE RIGHTS