Darrell Blomberg’s meeting tonight is well-timed. He chose the topic because he is seeing first hand how both lawyers and pro se litigants are confusing the debt with the documents.
First let me say simply that the word is “quiet” not “quite.” It is a lawsuit that was never intended to be used as an offensive weapon to escape a debt that would otherwise be due. So if you win your lawsuit for quiet title, you don’t come out of it with the obligation, or even the note discharged. The only way an obligation is discharged or satisfied is through either payment or waiver. The only benefit you get from quieting title is that you remove any claims arising out of a document that appears to put title in doubt. In the case of a mortgage, the law requires the holder of a mortgage that is satisfied to provide the original note back to the borrower showing that it has been paid in full and recording a satisfaction of mortgage (or release and reconveyance). If they fail to do that, the owner files a lawsuit saying that the chain of title in the county registry is showing a claim from XYZ Company but that they have no claim. If the court agrees, then it enters a declaratory statement declaring the rights of the parties with respect to title to the property.
If you want the court to decide on whether the debt is still due or if payments are delinquent or in default, that is another lawsuit or at least another court (section) of your lawsuit.
Theoretically you could knock off the encumbrance and the creditor, having had its “lien” voided by the court, could sue the debtor, get a judgment against the debtor, and even record the judgment as a judgment lien, leaving the creditor not too far from the their original position that they were allowed to foreclose as the mortgagee. Of course the foreclosure of a judgment lien is NOT susceptible to non-judicial foreclosure and the creditor would be required to prove their entire case, which we all know now is impossible.
So by filing a lawsuit to quiet title against a party whose name appears in the chain of title but who you are sure has no claim of any encumbrance, there are things you can accomplish that will greatly benefit you. In the absence of a recorded assignment, no party would have standing to come into court as a third party to say that they needed that mortgage to stay on record because they have an assignment. The recorded assignment, by the way, is a trap door through which many homeowners have fallen.
An assignment says that there was a financial transaction in which consideration or money exchanged hands, in exchange for which the ownership of the loan was given to the buyer. But we now know that no such transaction even occurred. So peel away the first layer of any assignment and you have fraud — false statements concerning a non-existent transaction. That they merely did the assignment for the purpose of setting up the foreclosure is not consideration. The sale must have occurred or the assignment is void.
And assuming that the mortgage was originated by funding from an undisclosed third party, the assignor of the loan clearly had no right to assign the loan because they never owned the loan receivable. So a double pronged attack is required and that is why we are going to Darrell’s meeting (see “Events” tab above). It is true that if you get rid of the debt, the note and mortgage should disappear. But this is not always happening because Judges are not looking behind the curtain and the homeowners are too unsophisticated to present the concept. It is also true, however, that getting rid of the mortgage or even the note will NOT necessarily discharge the obligation. When you took the loan you owed a duty to repay it.
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