At the end of your time with a particular loan, if you don’t have the original note stamped “Paid in Full” in your possession it potentially opens the door for sooo many things to happen. I’ve heard theories that notes that go unreturned simply get reinserted into RMBS pools again and investors are none the wiser. And what happens after you’ve paid off the note when someone comes knocking a year down the road claiming to be the note holder and THEY have the original note in their possession? The game of “What If?” gets even more interesting when you get into states like Pennsylvania, more accurately a Commonwealth I know, that somehow allow the bifurcation of note and mortgage and allow the holder of EITHER document to foreclose. I have no idea how that gets around Article 3 of UCC but apparently PA is attempting to make it fly.

An unsettling thought – what if the note holder makes you prove many years of payments before they will stamp “paid in full” or if they simply refuse to stamp it. Nobody is dealing with the local S&L anymore and maybe MERS or these big banks may simply refuse to stamp any mortgage “paid in full”.

That’s part of the probelm here Bergsten. The money ISN’T going to the note originator in most cases. The original note holder is usually looong gone in the process of securitization. I’ve seen notes sold/assigned/xferred 3,4,5x within a year’s time. The funny thing about this is that, as long as the SERVICING RIGHTS to the loan stay with the same entity, a borrower never has to be notified of the sale of the note itself. The ONLY time a borrower must be notified, and I beleive that comes from Section 6 of RESPA, is when the servicing rights to the loan are sold/assigned/xferred. When that happens, a borrower is supposed to get a minimum of 15 days heads up in writing. That doesn’t always happen though. In fact, my own “hello/goodbye” letter from then Fairbanks Capital Corp. n./k/a Select Portfolio Servicing, wasn’t even authored until October 16, 2001 saying “Hi there, as of October 1, 2001, we own the servicing rights to your loan.” Guess what happened shortly thereafter….

Before I get into this any further, I would HIGHLY advise anyone at all concerned about their mortgage to take a trip to your county registry or recorder of deeds either via the internet if you are lucky enough to have access that will show you the actual documents (not all registries are on line and not all of them will show you the actual docs). What you find may surprise some of you a bit. Servicers, from what I’ve gathered, don’t like to record assignments, etc, until absolutely necessary usually either when a loan is paid off – when a discharge can be recorded – or, more commonly, several days to weeks before an attempt to foreclose is made. I’d venture to guess that this is because until that time, the assignment of mortgage is usually left “en blanc” or not filled in for either simplicity or laziness, whichever one works. In my own case, I was asking for the better part of two YEARS as to why Merrill Lynch was trying to foreclose on me. It wasn’t until literally five days before (12/19/03) I was served(12/23/03) with a Notice of Intent to Foreclose that multiple assignments were recorded. Two years. My loan originated 03/12/01 if I remember correctly. It was supposedly sold to Merrill Lynch Mortgage Capital two weeks later. The assignment just wasn’t recorded until two years later. Of course, the assignment itself wasn’t even CREATED until between July and December 2003. Of that I have irrefutable proof.

As far as making sure the payments are recorded, that’s a bit of a process but one that can be at least reasonably, if not slightly more expensively, done. As has already been suggested, scan your checks before you send them out each month. Even better if you can get the original checks back with the processing info on the back – good luck on that one with Check 21 in place now. Send your payments certified return receipt if possible to ensure that you have proof that the payment was received. You may need to send CRRs to a different address so double check with your servicer before attempting this. You may also want to coordinate your payment with the month in which it is sent. I.e. for an October payment of $1020.75 round it up to $1021.10. For November $1021.11. December $1021.12, etc. I wish I could take credit for this basic but ingenious thinking but I can’t. If nothing else, what this does is make it that much easier to track a payment if/when you need to audit your loan.

As far as making sure that you do, in fact, have lien and claim free ownership of your property upon payment in full, that’s an easy request – although potentially more difficult for the note holder/servicer to grant. Demand the original note stamped “Paid in Full”. If they can’t come up with it, then I suppose you have to figure out if it’s worth the litigation, expense and headache to go after the (assumedly) 30 years worth of principle and interest that you’ve forked over…

Something else to consider that’s neither here nor there with regard to Constitutional or prudential standing… MERS is – or at least was the last time I looked – screwing each and every county registry/recorder of deeds, and therefore the people of each and every county in every state, out of most likely hundreds of millions of dollars worth of filing fees.

According to Wikipedia – http://en.wikipedia.org/wiki/MERS , “Shareholders and owners of MERS include AIG, Fannie Mae, Freddie Mac, WAMU, CitiMortgage, Countrywide, GMAC, Guaranty Bank, and Merrill Lynch. It is argued that the U.S. government may currently control MERS via its control and ownership of many of these MERS’ shareholders.”

In my own opinion, there was no “mistake” as I believe one poster alluded to with the creation of MERS. MERS was/is designed to do exactly what it was/is supposed to and has been doing for a long time.

If anyone is at all curious, feel free to run ” Mike Dillon NH foreclosure ” through your favorite search engine for more info on me…

Mike Dillon
Manchester, NH
http://www.getdshirtz.com
-Because after all, all you have to lose – is your home.

Incidentally, I just saw this poll on cnnmoney.com:

Are homes affordable where you live?
Yes, thanks to the housing bust. 25%
Yes, always have been. 25%
No, they’re still too pricey. 50%
Total responses to this question: 57154

No doubt the apparent discrepancy you note is because of the huge number of second (and even third, if you can believe it) mortgages that are out there. They became the new way to make your 10-20% “downpayment” (which was a really good plan; way to go Joe Banker). I still remember my puzzlement when I started hearing about this practice. It always did defy logic, not that that stopped anything.

As usual some innocent victims are getting caught in the story of the banking industry’s making. But they continue to rake in huge bucks at the top for their “superior” management skills that are hard to find. (choke, gag)