FRAUD STOPPERS and the Two Faces of Quiet Title
What is Quiet Title? I ask this question to get you to think about the two faces of Quiet Title. First, Quiet Title is an equitable Cause of Action that many homeowners’ use to identify who may have an enforceable equitable claim to their title. The reason many homeowners file a lawsuit for Quiet Title as a cause of action is because they believe there is a cloud on the title to their property and that this action would “quiet” any challenges or claims to the title. FRAUD STOPPERS can show you how to successfully sue for Quiet Title to your home!
Second, Quiet Title is also an equitable remedy. It is a remedy which removes the “cloud” or possible encumbrance on the title to real property. The problem is that in order for the homeowner to receive Quiet Title as relief the homeowner must meet their States’ statutory requirements. Most States’ require in order for Quiet Title to be granted as equitable relief there cannot be an enforceable equitable claim to title to their property evidenced by an obligation such as a properly secured mortgage loan security instrument.
Many homeowners’ filing this action do not truly understand the “two different faces” of Quiet Title as a cause of action and equitable remedy. What happens many times is that unfortunately the Quiet Title complaint is remanded to federal court based on diversity and the monetary threshold of $75,000. Once remanded to federal court, a motion to dismiss is filed by the opposition under rule 12(b) (6) requesting dismissal for failure to state a claim upon which relief can be granted. “Rule 12(b)(6) is designed to screen out cases where ‘a complaint states a claim based upon a wrong for which there is clearly no remedy, or a claim which the plaintiff is without right or power to assert and for which no relief could possibly be granted. . ..'” Port Auth, v. Arcadian Corp, 189 F.3d 305, 312 (3d Cir. 1999).
You must be careful not to put the cart in front of the horse. All action[s] must be timely and Quiet Title as a cause of action should not be done as you come out of the gate. The action that this writer would look at first would be a determination of the status quo for all interested parties claiming an enforceable equitable interest to real property. A Declaratory Judgment would move the courts to address a controversy such as a cloud on title by identifying if rights have been properly acquired in accordance to statutory requirements of law.
FRAUD STOPPERS investigators “Quiet Title Package”
- Chain of Title Investigation
- Mortgage Fraud Investigation of Securitized Mortgage Loan Instruments
- Robo Signing Audit
- Declaratory Judgment / Quiet Title Complaint
- Lis Pendens (to Cloud the Marketability of the Title)
- Application for Temporary Restraining Order (to Stop a Foreclosure Sale or Eviction)
- Expert Witness Affidavit
- How to Win Quiet Title DVDs
Part 1: FRAUD STOPPERS’s Chain of Title Investigation – State Specific Chain of Title Analysis of documents purporting to pass a claim of [legal] enforceable right of possession or ownership [true sale] to a securitized Mortgage Loan tangible promissory note and Security Instrument. FRAUD STOPPERS investigation compares hearsay alleged colorable claims to ownership, possession, and rights to the mortgage loan instrument as to Federal and State specific Statutory Requirements of Law- Uniform Commercial Code or States’ Equivalent, Local Laws of Jurisdiction, and Case Law to identify what LAWFUL RIGHT may have been conveyed during a purported true sale.
FRAUD STOPPERS investigation is the framework of a Declaratory Judgment / Quiet Title Complaint to identify if an Assignment of a Security Instrument was legally eligible for recordation and whether the new assignee is a true party in interest to real property. A Sworn Factual Affidavit states the findings of the documents investigated by licensed professionals, both in public and court record.
Focus of Investigation:
- The union of all elements constituting the “legal right” to control and dispose of real property as alternate means of value to the promissory note.
- The “legal link” between a person who owns property and the property itself [Deed].
- The “legal evidence” of a pledged person’s ownership rights (interests) in real property
- The conditions necessary to acquire a valid claim to real property
Part 2: FRAUD STOPPERS’s Declaratory Judgment Package- State specific educational example of a Declaratory Judgment that sets the proper foundation to properly prosecute, or defend an administrative foreclosure is included. A Declaratory judgment is a judgment of a court which determines rights of parties as well as establishing status quo. The declaratory judgment is generally considered a statutory remedy and not an equitable remedy in the United States, and is thus not subject to equitable requirements. Often an early resolution of legal rights will resolve some or all of the other issues in a matter of determining whether an assignment of security instrument purporting to pass a claim to legal enforceable rights of possession to real property was eligible or ineligible for recordation. Once a judgment has been made, Should the client desire to litigate an equitable cause of action such as Quiet title in court, an attorney services or pro se support option may be provided.
Part 3: How to Win Quiet Title DVDs – consists of hours of training to assist professionals and individual homeowners alike in identifying if a legal claim to title can be adjudicated in order to challenge equitable claims to title such as an alternate means of collection- foreclosure. In addition to invaluable research, the How to Win Quiet Title DVDs will equip you with the most relevant legal information, Federal and State specific statutes, and case law available to ensure you are educated on the most recent developments in quiet title and foreclosure defense.
FRAUD STOPPERS’S Mortgage Fraud Investigation of Securitized Mortgage Loan Instruments
Federal Uniform Commercial Code (UCC) and State statutory law mirroring federal statutes create the Promissory Note of the Tangible Mortgage Loan Instrument. According to state statutory law, real property secures the Promissory Note.
The electronic version of a Warranty Deed may be electronically filed with the County Recorder’s Office by a third-party submitter, but must strictly adhere to State statutory requirements. The Warranty Deed contains the information transferring title (legal and equitable) of the real property from the Mortgage Loan Originator, operating as an agent for the Seller of Real Property to the Buyer (Homeowner). In order to secure the property as collateral for the Security Instrument, legal title to the property is required. The Warranty Deed must be filed with the County Recorder’s Office in order to effectively secure the property. The Warranty Deed is not governed by the UCC or its State equivalent if filed electronically, but by the ESIGN Act.
Of the many documents signed and recorded after the closing of the Mortgage Loan Contract by the Mortgage Loan Originator, only two (2) are required to effectuate the securitization process. These two documents are the Paper Tangible Promissory Note and the Paper Tangible Security Instrument (Mortgage, Deed of Trust or Security Deed). These two tangible instruments are collectively considered one tangible instrument. Filing of the Tangible Promissory Note with the County Recorder’s Office is required to perfect the Tangible Lien according to State statute. The filing with the County Recorder’s Office identifies to the original Lender who has the rights to the Note and the Security Instrument securing the Note.
Securitization occurs when the Mortgage Loan Originator offers as consideration the mortgage loan instrument to an Account Debtor (Sponsor/Seller) who swaps the intangible payment stream for certificates that are sold to investors who are paid the income from the certificates.
When the Tangible Obligation (Promissory Note) and the Security Instrument (Mortgage, Deed of Trust or Security Deed) is sold in the secondary market to an Intangible Account Obligee (REMIC Trust) an Intangible Obligation is created under UCC Article 8. The existence of the Intangible Obligation under UCC Article 8 depends on the Tangible Instrument secured by a properly and continuously perfected security interest requiring the tangible Security Instrument be filed with the County Recorder’s Office.
Digitizing the tangible Promissory Note and the tangible Security Instrument into electronic data creates an electronic file called a Mortgage Loan Package. This electronic file is presented to various parties for evaluation and rating and appears legal. The Electronic Mortgage Loan Package is commonly, but incorrectly identified as the “Mortgage Loan Package” and is nothing more than an interest in the payment stream from the Intangible Payment Obligation originating from the Tangible Promissory Note obligation. The electronic digitized version of the Security Instrument is often filed with the County Recorder’s Office and gives the illusion of legitimacy by allegedly providing a security interest for an alternate method of collecting value for the UCC Article 8 Intangible Obligation. In reality, the maker of the Intangible Obligation pledged the digitized version of a UCC Article 3 Security Instrument which is not perfected as it is recorded without the purchaser’s identity. The Account Debtor claims to execute a True Sale of the Tangible Obligation and the Security Interest to the purchaser of the Intangible Obligation. This is impossible as the purchaser never obtained legal rights to an alternate method of collection using the Security Instrument to secure the obligation.
The First Electronic Sale happens when the Loan Originator offers the Electronic Mortgage Loan Package to a prospective Buyer (Intangible Obligor/Seller/Securitizer) to offset a pre-arranged line-of-credit for the benefit of the Loan Originator. The Buyer of the Electronic Mortgage Loan Package conditionally agreed to accept as a tender of funds the conveyance of the Electronic Mortgage Loan Package and takes control of the Electronic Mortgage Loan Package as a transferable record that is not supported by law.
Pursuant to UCC Article 3-3203(d), when the First Transfer of Personal Property (UCC 8 Note-Payment Intangible) and the First Sale of the Intangible Obligation (payment stream, rights to future payments or beneficial interest) are bifurcated from the Tangible Obligation, rights to enforce the Tangible Obligation cease as the Tangible Obligation was not properly negotiated from the Loan Originator to the Intangible Obligor. The only rights conveyed are the rights to hold and possess the Tangible Obligation. An Intangible Obligor (Seller/Securitizer) cannot be a holder in due course of a properly secured UCC 3 instrument when the laws governing the Security Instrument are not followed. UCC Article 9 does not govern the signatures on the Intangible Security Interest, Tangible Note or the Tangible Security Interest. UCC Article 9 governs the collection rights but the negotiation and transfer of an Intangible Obligation (payment stream) is governed by UCC Article 8. Therefore, negotiation of the UCC Article 8 instrument cannot be negotiated with an electronic signature attempting to transfer under UCC Article 9 and is invalid.
As future legal actions were not anticipated, paper documents were either placed in storage (Custodial and Non-Custodial Custody) or destroyed. The electronic version of the paper documents are stored electronically as an eNote and tracked on a national database. The electronic database tracks who the UCC Article 8 Intangible Obligee with personal property rights to the UCC Article 9 is. The electronic database does not track who has a vested legal interest in the Security Instrument as this is governed by State statutory law and typically remains vested in the name of the Mortgage Loan Originator.
If Mortgage Electronic Registration Systems (MERS) is involved, MERS is named as beneficiary or nominee agent to the Mortgage Loan Originator. Registration on the MERS system is required and when registered, an 18-digit Mortgage Identification Number “MIN” is created. The first seven digits identify the registering lender and the last digit is a checksum number. If the Electronic Mortgage Loan Package is registered in the MERS registry, there is no physical transfer of the Electronic Mortgage Loan Package. The MERS Registry updates information as to who has control and ownership rights of the electronic digitized file. If a Notice of Assignment reflecting the electronic negotiation is not filed with the County Recorder’s Office, rights to the Security Instrument does not occur. There is no law requiring notice to be filed with the County Recorder’s Office upon the selling or buying of an eNote when dealing with personal property. However, when dealing with real property, compliance with UCC Article 9, the ESIGN Act and the UETA is required.
The Second Electronic Sale happens when the Seller/Securitizer of the Investment Vehicle sells or assigns the Electronic Mortgage Loan Package to the Buyer (depositor of the Investment Vehicle). The recipient of the Electronic Mortgage Loan Package accepts the transfer and takes control of the Electronic Mortgage Loan Package under the terms of the Trust.
The Third Electronic Sale occurs when the Buyer sells or assigns the Electronic Loan Package to the Trustee of the Investment Vehicle and takes control of the Electronic Mortgage Loan Package. The Depositor of the Investment Vehicle takes control of the Investment Trust’s Electronic Certificates under the rules of the Trust in exchange for selling or assigning the Electronic Mortgage Package.
Under UCC Article 8, the Intangible Obligee (REMIC Trust) must comply with State statutory requirements in order to have a perfected Security Interest and a continuous alternate method to collect future payments pledged by the Account Debtor. The Intangible Obligee must be assigned the rights to the Security Instrument according to State statutory law. If the UCC Article 8 Intangible Obligee attempts to apply UCC Article 9 laws of perfection to support a legal claim to the Security Instrument, the claim is untenable as it is unlawful. This system of securitization is flawed as it provides the Account Debtor (Intangible Obligor) and the Original Account Debtor (Tangible Obligor) rights to the same instrument which is a legal and logical impossibility.
Upon default on the Intangible Obligation a Notice of Assignment is filed with the County Recorder’s Office. This Notice of Assignment allegedly transfers lien rights from the Original Mortgage Loan Originator (Tangible Obligee) to a third Intangible Assignee (Subsequent Intangible Obligor) who is usually the Trustee of the Mortgage Servicer. These filings are a fraud upon public records. The perfection of lien rights (Perfected Chain of Title) does not match the Chain of Negotiation of the Tangible Note shown by endorsements or lack thereof and shows the Tangible Note is no longer secured by the Security Instrument as the Security Instrument becomes a nullity as an operation of law. The Trust is conveyed a transferrable record, leaving the Tangible Note, less the rights securing it which include the power of sale as would exist if the Security Instrument securing the UCC Article 3 Tangible Note was assigned in accordance to State statute.
The ESIGN Act – 15 USC §7003 excludes instruments governed by the UCC Article 3, 8 and 9 or the State equivalent. Therefore, the intangible claim cannot be negotiated electronically. The Tangible Note and the continuous perfection of the Security Interest can only be pledged as an intangible interest in the payment stream of the UCC 8 instrument. The Intangible Payment Obligation can only be negotiated in paper form.
UCC Article 3 allows proving up the Tangible Note, it does not extend to the Security Interest that once secured the Tangible Note as the Intangible Obligee is not perfected by recordation to the Security Interest.
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If you are in foreclosure or you have lost your home to foreclosure and you want to sue for mortgage fraud or foreclosure fraud, FRAUD STOPPERS PMA can help you save time and money, and increase your odds of success, with a court ready Quiet Title or Wrongful Foreclosure lawsuit package. If you have received a Notice of Default (NOD) or a Foreclosure Notice (Foreclosure Complaint) and you want to know how to respond to the Notice of Default (NOD) or a Foreclosure Notice (Foreclosure Complaint) call FRAUD STOPPERS PMA today because our prove system can help you fight to save your home from foreclosure fraud and/or mortgage fraud. Our court ready Quiet Title Lawsuit Package or Wrongful Foreclosure Lawsuit Packages includes a turnkey complaint (petition for damages), Bloomberg Securitization Audit, Expert Witness Affidavit, Application for Temporary Restraining Order (to stop a foreclosure sale or stop an eviction), Lis Pendens (to cloud the marketability of the title to the real property), and Pro Se education material that can show you how to win a Quiet Title Lawsuit or win a Wrongful Foreclosure Lawsuit. This entire court ready Quiet Title Lawsuit Package or Wrongful Foreclosure Lawsuit Package can help you save thousands of dollars in legal fees and help you increase your odds of success. For payment options or more information on this court ready Quiet Title Lawsuit Package or Wrongful Foreclosure Lawsuit Package please contact FRAUD STOPPERS PMA today at 844.372.8378 or open a case file for a Free Mortgage Fraud Analysis and Bloomberg Securitization Search to see if your current mortgage loan situation qualifies for a Quiet Title or Wrongful Foreclosure lawsuit