Recent reports have scrutinized practices relating to a certain investment vehicle; the mortgage backed securities market. This market is operated by originators of the loan, the lenders, selling their loans into a trust, which in turn pass the benefit of these loans on to investors.
Transfers from the mortgagee to a trust, like all secured transactions, are subject to some fairly strict requirements. These requirements are set out in the trusts "pooling and servicing agreement" called the PSA. Within the PSA are all the rules of the assignment, which the mortgagee and trust must follow, such as including the trust documents in the assignment from the lender to the trust - the promissory note, the mortgage, the mortgage assignment and a title insurance policy are necessary.
The PSA is usually uniform. They require the note itself to be the original note, indorsed to the trust or in blank. This is so others know the bank was the original lender on the note but that the trust is now the owner. While the note is indorsed, the mortgage itself must be assigned, usually in a separate document. Some trusts allow the mortgage to be assigned "in blank", meaning the name of the new owner isn't specified. The name of the trust (the new owner of the mortgage in this situation) is the only thing that can be left blank on the transfer.
A study was conducted over a three-year period in Hillsborough, Lee and St. Lucie County's, Florida, from 2008 to 2010. During that period, 4,580 assignments of mortgage took place between banks and these six groups of trusts: Bear Stearns, GSAMP, GSAA, Morgan Stanley, Structured Asset Investment Loans (SAIL) and Structured Asset Mortgage Investments (SAMI).
The study of those assignments returned some peculiar results. Many other items besides the "in blank" new owner were also left blank, such as the effective date of the assignment. Without this date recorded on the original assignment, the question then becomes whether and when the assignment actually took place.
In fact, throughout the study, no document in the 4,580 assignments filed in the three Florida Counties was original - all were prepared by mortgage servicers years after the trusts had closed, back dated to reflect a proper transfer date.
If the trusts acquired the mortgage years after the trusts closed - what mortgages actually were in the trusts that were sold to investors? Why, if original documents were in fact missing, were they not reported correctly as missing? Finally, what is the remedy for the buyer?
Many are familiar with the saying: "perception is reality." It may just seem that foreclosures by trusts are legitimate, even without evidencing the ownership of the note and mortgage. But the perception for the purchaser is that these mortgage-backed securities thrived on fraudulently manufactured documents and poor customer relations.
If your mortgage has been pledged to a trust and you are facing a Florida Foreclosure Lawsuit, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer to assist you and determine what foreclosure defenses may be available to you.
