This is a weekly column by Sandusky attorney Dan McGookey, devoted to telling true stories of homeowners who have been victimized by a lending system that makes it profitable to foreclose. The names used have been changed for privacy purposes. This is Dorothy's Tale.
Recently Dorothy brought in her foreclosure Complaint, filed by Dortmunder Bank. Dortmunder claimed that Dorothy’s loan was in a trust bundled with thousands of other home loans. Attached to that Complaint were the $82,000 note and mortgage in taking out the loan Dorothy signed on June 26, 2008 in favor of Argent Mortgage Company. A cursory review of the Complaint quickly revealed what we see so often these days, however – fraudulent documents meant to mislead the homeowner and the court into believing all is in order, and that the bank seeking foreclosure is the proper party to be doing so.
In this case, the offending documents were two Assignments of Mortgage. As indicated, the original mortgage was in favor of Argent. The first Assignment of that mortgage was executed by City Mortgage as “Attorney in fact” on behalf of Argent, was dated February 29, 2009, and was in favor of Dortmunder. At least three huge problems jumped out at us right away when looking at this Assignment. First, there was no Power of Attorney filed of record granting authority from Argent to City, allowing City to execute such Assignments on Argent’s behalf. The law in Ohio, as in all states is clear: All documents granting authority permitting another to convey an interest in real estate must be in writing and recorded. The title report filed with the Complaint showed no such Power of Attorney as having been recorded. This fact alone rendered the assignment fatally defective, and of no effect.
The second problem with the Assignment of Mortgage was that it was signed, witnessed and notarized by well-known “robo-signers” who work for a fraudulent foreclosure facilitator in Florida, and not City Mortgage. An Internet search reveals that they have signed such assignments regularly on behalf of a number of different banks. The final obvious problem with the Assignment of Mortgage was that it was executed and recorded purportedly on behalf of Argent in early 2009, whereas Argent went out of business in 2007. Again, it is a well-established point of law that authority to act on behalf of a party, called “the principal” given to an agent, ceases upon the death or termination of existence of the principal. What that means here is that, even had Argent given City authority to sign documents on its behalf, that authority would have ended with Argent’s demise in 2007.
The second Assignment of Mortgage executed and recorded only weeks prior to the filing of the Complaint, is just as fraudulent as the first one. After reviewing these documents, we entered a vigorous defense on behalf of Dorothy, which included the filing of an Answer to the Complaint, and extensive discovery, or requests for information about Dorothy’s loan and the fraudulent documents the Bank submitted. Who is to say why exactly, but it is extremely interesting that within eight days after entering our defense that Dortmunder dismissed the foreclosure Complaint. Unfortunately for Dortmunder, however, this matter is not over. We expect to get Dorothy’s permission to go after Dortmunder for filing bogus documents (the Assignments of Mortgage) with the County Recorder and in connection with the foreclosure action. As part of the relief sought, we will seek an order striking the Assignments, meaning that the mortgage would be placed back in the name of Argent, a company which has been out of business for five years. Should be interesting, Stay tuned…
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Next week: the story of the Jeffersons, who despite being promised a HAMP loan modification in writing, were instead put into foreclosure by Cheat Bank.
Copyright 2012 Daniel L. McGookey