The Issue of Dispossession Titles In NSP Acquisitions.

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Securitization Flow Chart and Structure. . . Exchange of Promissory Note. Debatable instrument under Article 3 of the UCCTransferred by:EndorsementDelivery of the instrumentAcceptance of deliveryNegotiation = Endorsement Delivery Acceptance. Exchange of Mortgage. Home loan is a land instrumentSubject to the statute of fraudsMust consent neighborhood land lawTransferred by:Written assignm
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The Problem of Foreclosure Titles In NSP Acquisitions Why The Title of the Foreclosure Sale Buyer Is Often Defective How Can We Deal With the Problem?

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Securitization Flow Chart and Structure

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Transfer of Promissory Note Negotiable instrument under Article 3 of the UCC Transferred by: Endorsement Delivery of the instrument Acceptance of conveyance Negotiation = Endorsement + Delivery + Acceptance

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Transfer of Mortgage is a land instrument Subject to the statute of cheats Must consent nearby land law Transferred by: Written task Delivery of the instrument Acceptance of conveyance Recording of exchanged home loan "Task" = Written Transfer/Assignment + Delivery + Acceptance + Recording

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Notarization Requirements Most state laws require "strict" consistence Signer must concede, by pledge or attestation, in the PRESENCE of legal official to having willfully marked the archive, and endorser\'s ability Signer must make the OATH or AFFIRMATION before marking Must distinguish the underwriter by a government or state issued photographic ID Penalties incorporate common and criminal Felony in many states to take a false affirmation Document is invalid with ill-advised authentication

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The Alphabet Problem With Securitized Transfers The advance shut for the sake of the Broker/Lender Broker is subsidized by Warehouse Line of Credit Warehouse Lender then offers paper to a Special Investment Vehicle (SIV) SIV then offers paper the Sponsor/Depositor Sponsor or Depositor then exchanges to Trust

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How Many Transfers A-Transfer: Consumer to Broker B-Transfer: Broker to Warehouse Lender C-Transfer: Warehouse Lender to SIV D-Transfer: SIV to the Depositor or Sponsor E-Transfer: Depositor or Sponsor to Trust

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How Many Documents Four assignments and conveyances and acknowledgments of the Mortgage Four supports and conveyances of the Note Eight separate authorizations Eight UCC-1 financing explanations Four recordings Four recording and exchange expenses

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The Allonge A paper appended to a debatable note Purpose is to give composed underwriting Only utilized when back of debatable instrument is FULL (no room) No requirement for authentication Simple mark and title adequate, as with support on note

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Similar ABCDE Problem With the Mortgage Instrument A. Buyer must sign and convey to Broker B. Specialist must allot and convey to the Warehouse Lender C. Distribution center Lender must relegate and convey to the SIV D. SIV must appoint and convey to the Depositor E. Contributor must allocate and convey to the Trust And every one of these assignments must be recorded!

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Who Holds the Bearer Paper and Mortgages for the Trust? Ordinarily an outsider bank that gives archive guardianship administrations to the trust Provides trailing record filings Provides authority chambers for all individuals Executes assignments for individuals Execute supports for individuals Executes conveyances and acknowledgments Provide on-line report status confirmations

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What Does Trust Really Hold? Electronic information with advance numbers & security depictions Electronic picture of the first deed of trust Electronic picture of the first home loan note Rights in the records by method for UCC-1 financing proclamations and the pooling & adjusting understandings

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The 3d-Party Outsource Providers Fidelity National Default Services First American National Default Services National Default Exchange, LP (Barrett Burke Owned Entity) Promiss Default Solutions (McCalla Raymer Owned Entity) National Trustee Services (Morris Schneider Owned Entity) LOGS Financial Services (Gerald Shapiro Owned Entity)

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What Do the Outsource Providers Do for the Servicers? Make Assignments Create Allonges Create Endorsements Sign records as though they were the VP or Secretary of a Bank, SIV, Depositor, Sponsor or the Trust Notarize these archives Create Lost Note Affidavits Create Lost Assignment Affidavits Create Lost Allonge Affidavits Draft court pleadings and notification Draft default correspondence, reports, and so forth

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How to Identify a Defective Endorsement or Allonge can never be utilized to exchange a home loan Allonge can never be utilized if there is sufficient room on the first home loan note for the composed underwriting Note is supported and not appointed Date of the underwriting is before or after the date of the enlistment of trust And a great deal more …

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Defective Endorsements Notary is from Dakota County, Minnesota Notary is from Hennepin County, Minnesota Notary is from Jacksonville, Florida Signor\'s organization has no workplaces in public accountant\'s state Date of support and date of legally approbation are diverse Signor\'s name is stamped – not written in script Signor cases to have marking power however no power appended

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What About the Mortgages? Assignments and conveyance take after same model as with the notes MERS is utilized to stay away from enlistment of every task with neighborhood enroll of deeds MERS asserts no gainful enthusiasm for the note MERS guarantees no possession rights in note or home loan MERS claims it is chosen one for genuine proprietor MERS delegates marking power to all MERS individuals to sign reports as officers of MERS does not oversee any of it\'s assigned signors MERS is not enrolled as a remote company in many states

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How Does Trust Establish Lawful Ownership? Unbroken chain of note supports and acknowledgments from A to B, B to C, C to D, and D to E Unbroken chain of home loan assignments and conveyances and acknowledgments from A to B, B to C, C to D, and D to E Unbroken chain of UCC-1 financing filings all through the chain Unbroken chain of recorded home loan assignments

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But What Is Filed In a Typical Foreclosure? Objection charging that the borrower (An) executed a note and home loan for the offended party (E) Note and home loan from borrower (A) to starting bank (B) appended Sometimes an implied contract task from (B) to (E) connected, likewise implying to appoint the note This task constantly flawed, frequently not recorded

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The Paper Trail and The Lack of Truth in Labeling Electronic information Fake dates & manufactured marks False legally approbations False assignments Fake supports Fraudulent lost note affirmations Recreated reports & records Allonges and the sky is the limit from there

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Is the Trust Really Secured? Possibly – But it would be exceptionally troublesome for any securitized trust to deliver a substantial arrangement of unique and unbroken assignments and supports Even if the trust creates ALL of the required archives, there is still the issue of the legitimateness of the part of MERS on every single required report for recording

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Questions? David Wiechel Telephone 937-765-4546 Email 111 East Cecil Street Springfield, OH 45504

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