Jonathan Foxx
Managing Director
Lenders Compliance Group
Answer: When a Florida federal district court distinguishes between a borrower’s allegation that a servicer owned a mortgage loan – an allegation asserting ownership – and the borrower’s allegation that the servicer stated (in a letter) that it, the servicer, was the owner of the loan.
Managing Director
Lenders Compliance Group
Answer: When a Florida federal district court distinguishes between a borrower’s allegation that a servicer owned a mortgage loan – an allegation asserting ownership – and the borrower’s allegation that the servicer stated (in a letter) that it, the servicer, was the owner of the loan.
Get the difference?
The borrower did not connect the allegations by further stating that the servicer was the owner of the borrower’s mortgage loan.
You might think this is a distinction without a difference. But, according to the United States District Court, Southern District of Florida ("Court"), you would be wrong!
Let’s see what happened here.
Back in June 2016, Mr. Scott, the borrower, became aware that his mortgage lender had put his name on a neighbor’s title. The original lender on the mortgage was Sovereign Lending Group, with whom Scott had completed a refinance.
Back in June 2016, Mr. Scott, the borrower, became aware that his mortgage lender had put his name on a neighbor’s title. The original lender on the mortgage was Sovereign Lending Group, with whom Scott had completed a refinance.
Scott dealt with the mistake by getting the title company to resolve that matter. But he began to wonder if the lender and title company had not clouded his title. A clouded title, also called a title defect, is any irregularity in the chain of title of the property that could prevent a conveyance of title.
So, in August 2016, Scott decided to find out if there was any chance of a cloud on title. He sent a letter to the servicer, 360 Mortgage Group, the new servicer (“360MG” or “servicer”). Scott did not state in the letter where the mortgage assignment was recorded, but he had checked the public records and was unable to find any assignment to 360MG.
Apparently, Scott felt he needed an affirmative response from the servicer and, on April 7, 2017, in order to "check on the validity of the loan," he sent 360MG a Qualified Written Request (“QWR”). But the servicer didn’t respond. Then, on April 29, 2017, Scott sent another QWR to the servicer. Also on April 29, 2017, after discovering that MERSCORP® ("MERS") was acting solely as nominee for the lender with respect to his mortgage, Scott sent MERS a request for the “milestones” on the mortgage. He had gone to the MERS website and found that 360MG was indeed listed as the current active servicer.
A couple of weeks later, on May 10, 2017, Scott received a letter from the servicer, in response to his second QWR, which supposedly contained information that he already had from public records, such as a copy of the mortgage and note from Sovereign.
Importantly, 360MG stated in its response that it was the "Holder" of the note and the "Owner" of the loan.
On May 15, 2017, Scott received a letter from 360MG in response to the milestones status that he requested of MERS, which MERS had forwarded to the servicer for it to answer Scott on its behalf. The letter, according to the Complaint, indicated that MERS was the "recorded lienholder of [the] property on behalf of [360MG]" and stated that Scott's county would reflect MERS as the lienholder on behalf of 360MG. But, Scott was unable to find any assignment indicating such in the public records! On that point, the letter advised Scott: "No assignment is required to be recorded with your county as long as…MERS is the recorded lienholder. An assignment, which would be from MERS to [Scott], would only be recorded in the event legal proceedings are ever required."
One can almost sense Scott’s frustration at this point, which no doubt led him to his pro se litigation.[i]
