MCI CHAIN OF TITLE INVESTIGATION SERVICES
MCInvestigators "MOST VALUABLE PACKAGE"
Identify if your bank has a lawful enforceable claim to title with MCI's "MVP" Chain of Title Investigation, Declaratory Judgment Package, and Registration for "Quieting a cloud on Title" (6) hour Training Webinar
MCInvestigators "Most Valuable Package"
Part 1: MCI’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. MCInvestigation 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.
MCInvestigation is the framework of a Declaratory Judgment 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 Chain of Title Investigation is comprised of:
Part 2: MCI’s Sample of an Example Declaratory Judgment Package- State specific educational example of a Declaratory Judgment (Complaint for Declaratory Relief or Motion for Declaratory Judgment) sets the proper foundation for a statutory remedy of a trial court to determine legal enforceable rights of parties claiming an interest in a mortgage loan contract (tangible promissory note and security instrument). 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 option may be provided.
Customer Disclosure - We are NOT a Law Firm
There is nothing that we assist you with that you could not do for yourself. We are NOT a Law Firm and DO NOT OFFER Legal Advice in any capacity. We will provide you with information and resources whereby you may educate yourself as to your rights and potential remedies. However, it is up to YOU to understand and decide upon any course of action you may wish to take. We will assist you in the preparation of letters, notices and documents as requested by you, to pursue any actions you may decide to take. Again, we are neither lawyers nor a law firm, and we do not offer any legal advice whatsoever. You are strongly advised to consult with an Attorney and discuss your understandings as to the Legal ramifications of your intentions and/or actions, prior to taking any action which you may now understand, believe, or feel that you may be entitled to take. Should you ask us to assist you, please understand that we CANNOT and DO NOT guarantee any outcome. Please also remember that you are the principal in these matters and accordingly, your active participation in the process is essential. For example, you may need to assist in collecting information, mailings and County recording documents.
If in Doubt... Consult an Attorney
Part 3: MCI’s webinar for “Quieting a Cloud on Title” – consists of (6) 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, MCI’s workshop will arm our clients with the most relevant articles, Federal and State specific statutes, and case law available to ensure our clients are educated on the most recent developments in foreclosure defense.
MCI’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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What is Quiet Title? I ask this question to get the reader 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...