remedy – DTC Systems Inc

Independent Foreclosure Review

Looking for information about the Independent Foreclosure Review? Si usted habla español, tenemos representantes que pueden asistirle en su idioma.

Homeowners whose primary residence was part of a foreclosure action between January 1, 2009 and December 31, 2010, and whose home loan was serviced by a participating servicer, may be eligible for an Independent Foreclosure Review.

The Board of Governors of the Federal Reserve System and the Office of the Comptroller of the Currency (federal bank regulators) have required an Independent Foreclosure Review by an independent consultant to identify eligible customers who may have been financially injured due to errors, misrepresentations or other deficiencies in their foreclosure process. If the review finds that financial injury occurred, the customer may receive compensation or other remedy.

The Wrong Remedy at the Wrong Time, Part 2

By Daniel Edstrom
DTC Systems, Inc.

New Note added on 1/22/2012 thanks to Simonee. California Probate Code does not seem to apply based on this California Supreme Court decision: Monterey S.P. Partnership v. W. L. Bangham, Inc. (1989) 49 Cal.3d 454 , 261 Cal.Rptr. 587; 777 P.2d 623 (download here: http://dtc-systems.net/wp-content/uploads/2012/01/Monterey_SP_Partnership_vs_WL_Bangham.pdf)

This is a continuation from The Wrong Remedy at the Wrong Time, Part 1 (http://dtc-systems.net/2011/01/wrong-remedy-wrong-time-part-1/).

It turns out that if you want to modify the Trust created by your Deed of Trust, or if you want to determine if the trust exists, you need to petition the court under California Probate Code 17200. If you are not in California, but are in a Deed of Trust state, your state probably has similar probate laws.

In order to petition the court, California Probate Code 17200 has the following provision:

“(a) Except as provided in Section 15800, a trustee or beneficiary of a trust may petition the court under this chapter concerning the internal affairs of the trust or to determine the existence of the trust.”

Right off the bat we find that only a trustee or a beneficiary has the ability to petition the court under 17200. If no trustee is specified, the default trustee is the trustor (the parties that executed the note – i.e. the homeowners). The beneficiaries can easily substitute in a new trustee if that occurs. But what if Mortgage Electronic Registration Systems (MERS) is named as the beneficiary? Consider California Mortgage and Deed of Trust Practice § 1.39 (3d ed Cal CEB 2008) § 1.39 (1) the Beneficiary Must Be Obligee: The beneficiary must be an obligee of the secured obligation (usually the payee of a note), because otherwise the deed of trust in its favor is meaningless. Watkins v Bryant (1891) 91 C 492, 27 P 775; Nagle v Macy (1858) 9 C 426. See §§ 1.8-1.19 on the need for an obligation. The deed of trust is merely an incident of the obligation and has no existence apart from it. Goodfellow v Goodfellow (1933) 219 C 548, 27 P2d 898; Adler v Sargent (1895) 109 C 42, 41 P 799; Turner v Gosden (1932) 121 CA 20, 8 P2d 505. The holder of the note, however, can enforce the deed of trust whether or not named as beneficiary or mortgagee. CC § 2936; see § 1.23.

Continue reading “The Wrong Remedy at the Wrong Time, Part 2”