The Note and Mortgage are split in judicial states the same as the Note and Deed of Trust in non-judicial states.
The first issue is that the note was sold in 2005 but the Deed of Trust appears to have been left behind. For the uninitiated, if the Note and Deed of Trust are split, this causes a nullity. A nullity means the security interest is lost and the debt becomes unsecured. In securitization this is standard operating procedure and is one of the issues that we are left to face. Upwards of 60,000,000 homes may be unencumbered leaving those who own the notes on these houses with no power of sale. And more considering MERS wasn’t the only party involved in splitting the note from the security instrument.
Who owns these loans if they are unsecured? That was the whole purpose of creating the securitization diagram in the first place.
The result? More questions, few answers. Continue reading “Split: The Note and the Deed of Trust (Redux)”