Quiet title action erases mortgage

Is the previously uncommon quiet title action becoming a tool in foreclosure conflicts? In prior articles I wrote what we were seeing more instances of quiet title actions used by both lenders and borrowers to resolve difficult mortgage controversies. A few significant case decisions are starting to make their way into case law.
As reported this could be a serious development in property title activity. According to these decisions, entire mortgages have been wiped out by borrowers using quiet title actions. The court apparently did not receive sufficient documentation to support the fact that the loan was a valid claim against the property, and it was extinguished. Remember that this result only defeats the collateral claim against the property. The borrower is still technically liable for the separate mortgage note and loan amount, it is just no longer enforceable against the property.
There are a few reasons why a quiet title action may be more successful than other foreclosure defense strategies. In the first place, the venue may favor borrowers. In foreclosure court the judge sees hundreds of cases where the borrower is genuinely in default, and almost all cases result in decision against the property owner. This becomes a conditioned response where the presumption is that the lender is correct. A quiet title action generally is argued in civil court, where case outcomes are as much likely to go in favor of plaintiff or defendant.
Second, in a quiet title action the lender is on defense. The home owner initiates the case as plaintiff and the lender must respond. This is a subtle technical advantage for the borrower as he/she has the advantage of preparing the case which the lender is normally surprised.
Third, time favors the borrower in a quiet title action. All parties with a claim to the property must come forward with correct documentation with in a certain period of time specified by statute. If the lender has incomplete or erroneous documentation which is found defective, they may not have the ability to recreate the paperwork and resubmit it as they would in a foreclosure case.
Last, the results are final. If a lender fails in foreclosure court they can normally re-file. In a quiet title case a certificate of clear title is the end result, subject only to appeal which may be limited only to court errors, not subject to re-submitting new evidence.
Lenders have also used quiet title to clear up assignment chain gaps, MERS errors and robosigning problems especially when the homeowner is not contesting the foreclosure.

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10 thoughts on “Quiet title action erases mortgage

  1. This is one of the best explanations I’ve read about quiet title actions. We currently have a quiet title lawsuit against the lender, servicer, etc. When I try to explain to my “foreclosure friends” (I have a Facebook page entitled Bekker Foreclosure Friends) what a quiet title action is, they don’t seem to get it. What’s worse is that there are so many homeowners who are representing themselves in bringing all sorts of lawsuits against the banks, et al — but they make the mistake of “throwing in the kitchen sink” which is the absolutely worst thing you can do because it gives the bank a treasure chest of legal rebuttals which ultimately results in the case being dismissed by the court judge. And there is so much misinformation in the news and on the blogs that homeowners don’t know what to believe. This Holocaust for Homeowners (I coined the term) is an absolute horror, and it’s not going to be resolved anytime soon. And then there’s the Sequel — Homeless Families and all of the complications of having noplace to live. I was reading an article the other day which stated that 1/3 of the homeless are FAMILIES. Divorce rates are skyrocketing, children are uprooted, hunger pangs are often a daily recurrence (it was for us just this past spring), crime rates are starting to rise — as are suicides and homicides/suicides of entire families. A few years ago one of our neighbors killed his entire family and then himself after losing his job. Our neighbor two doors down from us blew his brains out when he lost his job. His roommate brother found him like that. This is all very haunting — especially when there is virtually NOTHING being reported in the media about what’s happening to our own people who don’t stand a chance against the banks, regardless of the financial hardship that has hit so many due to job losses, illness, and other extreme circumstances which are often outside the control of the homeowners. And then there’s the “shame factor,” the perception that homeowners deserve it because they can’t make their mortgage payments. Well, in many cases these homeowners lost their jobs due to massive layoffs and often cannot find new ones because of so many people chasing too few jobs. This is not the Great Recession; it’s an outright Global Depression. Like the “Emperor with No Clothes” everyone totally ignores the Elephant in the Room.

  2. I have been working on the MERS thing since 2008, like so many in this country I too had lost my job after 40 years. My research along with our circumstances brought us to only one conclusion, bankruptcy. Unlike many before us we argued in federal court that the servicer did not have standing only have the court sweep it under the rug because the didn’t want us to create a president for future cases and the judge evern stated to the attorney for the bank that this was his worst nightmare. So here we are, there is a federal subpoena to Freddie Mac that has to be answered by the end of this month and the answers will show the servicer and attorneys to be committing fraud as well as conspiracy. This should be interesting for sure because more lies will be told to try and cover it up. What we all have uncovered goes all the way to washington and is being covered up at every level. God bless America and all those who are standing up for themselves and this great nation. If we can secure our property away from the bankerman is one more step in the direction of freedom. Good hunting and gods speed to all of you.

    • Thank you for your thoughts. I find that there is not a lot of compassion left for the defaulted homeowner. I’m on a mission to educate the ignorant about what really happened to homeowners in this crises. It’s amazing how clueless people are. I look forward to reading your facebook page.

    • Bruce, I got your message mixed up with the first comment on this thread. Could you please tell me how you went about sending a Federal subpoena to Freddie Mac. We got a letter recently from FNMA that was so false that it was laughable. I would really like to get them to answer a few questions under oath. Who do these people think they are? What’s next for you, RICO charges? I would like to be on that as well!

      • Diane, I am sorry that I have not responded quicker.
        Lots have happened since my last post, we have been to federal court twice, we were able to get a default judgement from our state court only to have it overturned in federal court. our quiet title suit is moving forward.
        Our subpoena in bankruptcy court to Freddie Mac will prove to be very
        valuable moving forward since it proves the bank never owned the note.
        Our case should we win will open pandora’s box, the bank will not be able to chase us anymore since we extinguished the debt in bankruptcy court and the only thing they have left is the property. If they can not document the ownership, and they can’t, they will loose forever and the property becomes free and clear. No more banks for me, the rest of my life.
        My children are being steered away from the bankers as well.
        God Bless America, Go Get them!!!

  3. There is a book out called “Clouded Titles” I am ordering it immediately I have a MERS title/deed and the title must be researched. If you have a MERS deed or title you must do a title search to discover if there is a cloud on the title ( a hidden claim or partial claim on the titled property). We all must become educated in regards to this subject. If you have a clouded title and go to try to get title insurance they won’t give it to you, and you will not be allowed to sell your house until you file a quiet title law suit. Knowledge is power let’s defeat this fraud in high places once and for all.

  4. Bruce:

    What is the status of your quiet title action? I know someone in a similar situation in a non-judicial foreclosure state. What a mess!! The mortgage was sold so many times but the documents not recorded so they have no idea who owns the darn mortgage.

  5. We have lost our way when we not longer care about our brothers and sisters. How many billion dollar fines does the wall street banks have to pay before our courts wake up to this fraud? Billions of dollars have been made by insiders who got to pick which loans went into which trust so they could bet against them. You can lawyer it up all you want to but the bottom line is it is stealing. I am sorry our courts are not being funded like they should. I’m sorry that the judges case load are unbearable but not giving the homeowner his/her day in court in un-American. When the 99% take up arms against the 1% they will understand this. It is a fact when a person has nothing, he/she has nothing to lose. Add to this the reason they have nothing is due to crimes that are going unpunished and what we will end up with is the same as when gasoline is pored on to a fire. It’s going to be bad!!!!!!

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