Punishment for Lenders playing "Fast and Loose" with the rules?
Some good news for homeowners on the foreclosure front, and
bad news for those lenders playing fast and loose with the rules regarding
recording of mortgages and assignments.
In a recent case in Sussex County, Judge William McGovern III,
J. S. C. discovered a "serious matter" relating to the recording of
title and mortgage records. The court concluded that a recorded document (an
assignment of mortgage) used in the prosecution of a foreclosure matter was
apparently forged. The actual mortgage was
dated June 29, 1998. After several
assignments in 1998, the plaintiff in this action (the purported assignee) did
not purchase the note and mortgage until 2005.
The problem for the plaintiff lender was that the document which
purports to be the assignment relating to that 2005 transfer is an exact
duplicate of an earlier 1998 assignment, and the assignment purporting to
assign the Note in 2005 was signed and dated in 1998!
The Court went on to warn that recording such fraudulent documents is a
violation of criminal law. As a result of such criminal activity, the Court
dismissed the foreclosure complaint with instructions that no new foreclosure
action may be filed or commenced until the fraudulent documents had been
properly corrected and rectified. In addition, the Court warned that the
parties responsible for the creation and transmission of the bogus document should
be identified and held responsible for that action, and an appropriate
investigation should be conducted into such actions.
The Court concluded that "forging of a document, and
transmission of a forged instrument, to the County Clerk for recording,
represents a serious breach of and damage to the integrity of the land title
records and the function of the recording system.”
Finally, this Court was willing to listen to the arguments
that virtually all foreclosure defense counsel have been arguing for years;
namely, that lenders often do not have the appropriate documentation to support
the chain of title to their claim to foreclose on a homeowner's property and
have improperly created documents to support that claim. Under such circumstances, no lender should
not be permitted to take a person’s home without the proper documentation to
support that claim.
This blog post is not considered to be legal advice, and is intended for educational purposes only. For more information regarding any of the foregoing issues discussed above, please contact Robert F. Schillberg, Jr. (rschillberg@schillberglaw.com).
