Foreclosure/Transfer not for value
QUESTION: Party foreclosing on my home loan has no proof of being beneficiary, but says the loan was "transferred" to them. I expect there are no records because supposed original lender was just a sham who put up no funds, never owned the loan, and only serviced it. Thus the transfer back to "beneficiary" involved no money which seems like "not for value." They also admit the supposed transfer involved no endorsement and no assignment. If in fact that transfer was not for value, would that affect their entitlement to be the "holder" of the note?
ANSWER: Hey Kevin,
What your talking about is very controversial. There are 2 to 3 parties involved in the loan. The first is the borrower. The 2nd is the servicer of the note and the 3rd is the note holder. You can have a servicer change and they don't have to provide a proof of ownership because they don't own it. They are only servicing it. The note holder is different. They have to prove that they own the loan with the correct documents. If the loan is transferred then they need to provide the original docs and most lenders use (MERS) (Mortgage Electronic Registration System) to do this. The party that forecloses does not need to be a beneficiary to foreclose. They just have to be the trustee. You will normally get a letter stating the "substitution of trustee".
I hope this helps. There are a lot of professionals out there that are confused on how this all works, let alone a home owner.
[an error occurred while processing this directive]---------- FOLLOW-UP ----------
QUESTION: Thanks very much for your reply. What I am focusing on is the issue of whether or not the transfer to "beneficiary" was for value. MERS is not involved. If the note holder (who hired the trustee) acquired the note without paying any money, then they did not acquire "for value." Does that make a difference in their status as note holder?
I am not sure that I can answer your question in a sufficient manner. I would advise that you talk to a foreclosure or a real estate attorney because even if you are right, you will need to pay one of them to prove your stance to get anything done about it. Hope that helps.