Comment: Mortgage Company went belly-up

(See in situ)

In reply to comment: I'm not a lawyer and I'm sure (see in situ)

Mortgage Company went belly-up

** How does a non-existent company hold a lien on your property?

The company I took out my mortgage with went belly-up in the housing market collapse. Same company holds 1 out of 10 mortgage liens in just my county alone.

I wasn't even notified that the company went out of business. My monthly mortgage payments remained the same. The company letter head on my monthly statements changed. When I asked about the name change I was told "we collect the payments for your mortgage company". When I call my mortgage company telephone number these people answer the phone - so I thought nothing of it. It wasn't until 2 months ago that I received my monthly statement and my mortgage payment had increased 50% overnight. Turns out this "collection agency" paid my yearly property taxes before I even received my tax bill in the mail and then billed me for it, informing me that I'm supposed to be maintaining a tax escrow. Tax escrow was not part of my contract with my mortgage company - I chose this mortgage company and paid a higher down payment specifically to not have a tax escrow - so I could pay my own taxes and keep my right to withhold my property taxes if ever I needed to protest my taxes. This is how I knew something was afoul. To bring my mortgage payments back down to normal I wrote a check to my so called mortgage collection company for payment of my taxes. I then heard the story about the local family of a soldier killed in action, who went to the court house to pay-off their home only to find out they couldn't - so I went to the Recorder of Deeds in my county and found out what millions of homeowners in the US do not yet know - 75% of mortgages issued between 2000-2009 (97% of mortgages issued between 2005-2007), the deeds can never be transferred.

** Can the 'collection company' take your house if you don't pay them?

They can send me a foreclosure notice. They can serve me with an eviction notice. If I didn't know what I know now, and I leave my home upon eviction, yes they could assume legal possession. But now my taxes are paid via my mortgage payments, so if I don't pay my mortgage my taxes don't get paid and the government take my home.

** Do they hold title/deed?

No the title/deed never leaves your county courthouse. A mortgage is a lien on the deed. The deed is in the homeowners name and the mortgage lender puts a lien on the title/deed until the mortgage is paid. If the homeowner sells the house, the lien holder gets paid first and then lifts the lien, clearing the deed for transfer to the new owner.

I could pay off the lien but the lien won't be lifted therefor I can not transfer it. I can't sell it. I can't borrow against it. My credit will always show a lien on my home. I've already paid nearly $50k (will never get back), and still owe 40K or so on this place that will always be a "negative" asset. I did not borrow irresponsibly - I had a attorney go over the contract before I closed the deal. I did not borrow more than I could afford to repay - I can very much afford my monthly mortgage payments. My property value is not under water either - the value went down, but it's still assessed higher than the price-tag I agreed to when I took the place.

Like I said MILLIONS of people are likely in the same boat as I am, most of whom are just not aware of it yet. One of these days, thousands and thousands of dollars in mortgage payments down the drain they're gonna be in for a rude awakening to say the least.