Foreclosure Defense Florida

Assignments of Mortgage and the Equitable Transfer/Liar’s Transfer- JP Morgan v. New Millenial

701.02   Assignment not effectual against creditors unless recorded and indicated in title of document; applicability.

(1)    An assignment of a mortgage upon real property or of any interest therein, is not good or effectual in law or equity, against creditors or subsequent purchasers, for a valuable consideration, and without notice, unless the assignment is contained in a document that, in its title, indicates an assignment of mortgage and is recorded according to law.

(2)    This section also applies to assignments of mortgages resulting from transfers of all or any part or parts of the debt, note or notes secured by mortgage, and none of same is effectual in law or in equity against creditors or subsequent purchasers for a valuable consideration without notice, unless a duly executed assignment be recorded according to law.

(3)    Any assignment of a mortgage, duly executed and recorded according to law, purporting to assign the principal of the mortgage debt or the unpaid balance of such principal, shall, as against subsequent purchasers and creditors for value and without notice, be held and deemed to assign any and all accrued and unpaid interest secured by such mortgage, unless such interest is specifically and affirmatively reserved in such an assignment by the assignor, and a reservation of such interest or any part thereof may not be implied.

The foregoing was quoted directly from Florida Statutes, found here. Pinellas Judge Douglas Baird had a case in front of him earlier last year called JP MORGAN CHASE v New Millenneal which is a must read case for anyone interested in foreclosure.   In JP a title company did a title search and discovered two mortgages against the property that were recorded in the name of AMsouth Bank.   The title company contacted Amsouth to find out how much was required to pay the mortgages off and received back written confirmation that said, “pd Off”.   Great, mortgages cleared…ready to close….only not so fast.
Turns out the mortgages had been assigned to a secondary purchaser, JP Morgan…Amsouth was paid off, but the JP Morgan was still owed the mortgages.   If JP Morgan had recorded assignments of mortgage the title company could have figured that out and gotten the payoff, but JP violated the statute and failed to record the assignment…they violated Florida Statutes 701.02 so their penalty is they lose right?   Judge Baird correctly though so, but he was reversed by the Second DCA. In a tortured decision, the Appellate Court reasoned that the subsequent purchasers…even though they relied upon the documents that were recorded in public records, could not rely on Florida’s Notice Recording Statute.

JP Morgan was a watershed case, but unfortunately the Second DCA opinion sent it in the wrong direction.   Given the tortured reasoning and the lack of consideration for the practical realities and functioning of closing/title operations, the decision in my mind just represents the recognition on the court’s part that if they strictly enforced the law, the Baird’s correct initial decision would have been a catastrophe for real estate/lenders and title companies and the whole MERS system.

The catastrophe is still coming and Judge Baird’s decision will be cited when the larger catastrophe finally comes, but for the short term, the MERS fiction and secrets behind the curtain continue to function.   It is important to know and cite this opinion, because it shows our judge’s exactly what is going wrong with this MERS shadow system…and will help them understand problems with decisions they are issuing now.

One questions on “equitable transfers” of mortgages…

Why aren’t the county tax collectors figuring out a way to collect tax on “equitable transfers” of mortgages?   I mean if courts now find that equitable transfers have the same effect as honest transfers, shouldn’t the recording tax be collected on the liar’s transfer?

2 Comments

  • Greg Clark says:

    Indeed, this is a tough case. It is hard to read the statute and think it purposely excludes new buyers and new lenders of a property from its protections.

    I think the ruling would have made more sense to say that in view of the “of record” unsatisfied mortgages on this property’s search report the buyer/new lender were on record and inquiry notice to hunt down and root out the original notes.

    This really was a case of sloppy title work and the 2d DCA did not want to let this title company off the hook for malpractice by simply letting them hide under the protection of the statute.

    So they narrowed it to protect only mortgage purchasers and their lender creditors, not real estate purchasers and their lender creditors.

  • Scott Cuthbert says:

    Both the Federal and Florida State Constitutions, in their respective Article I, section 10’s prohibit laws “impairing the Obligation of contracts”. Allowing note holders and mortgagees to buy, sell, trade or otherwise assign notes and mortgages at will without public recording or the payor’s or mortgageor’s prior approval or consent, deprives said parties a plathoria of contractual rights-not the least of which is the opportunity for direct party to party negotiated settelment of the contracts.

    If I want to deal with a local lender for the specfic reason of being able to make local payments and to keep the earned interest flowing through the local economy -instead of going into MERS (the investment vechicle which produced such fantastic results for our financial systems) where mortgage backed secuities are sliced and diced and “tranched” to the Chinese, Russians, Saudies and hell maybe even the Iranians– I can’t.

    These transfers and assignments strip consumers of all “Equal Protection” rights and give them to instiutions that are deemed “to big to fail”

    Where is Lady Justice?

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