Legal Question in Real Estate Law in California

No.

The original lender does not have to execute any document, such as an assignment of a deed of trust, to the lender who purchases the promissory note. Transfer of the promissory note transfers the deed of trust by operation of law. "The assignment of a debt secured by mortgage carries with it the security." (Civ. Code, sect. 2936.) This has been extended to deeds of trust. �Consonant with the foregoing, we note the following established principles: that a deed of trust is a mere incident of the debt it secures and that an assignment of the debt �carries with it the security.�� (Domarad v. Fisher & Burke, Inc. (1st Dist. 1969) 270 Cal.App.2d 543, 553.)

Other cases have relied on the provision of Civil Code section 1084 to provide for the assignment of a deed of trust by assignment of the underlying debt. �Furthermore, the indorsement of the note by Mrs. McElroy, named as payee, transferred the deed of trust without other assignment. A lien is but an incident of the debt secured, and cannot be transferred apart therefrom. A transfer of the debt carries with it the lien.� (Lewis v. Booth (1935) 3 Cal.2d 345 citing Union Supply Co. v. Morris (1934) 220 Cal. 331, 338.)

(Seidell v. Tuxedo Land Co. (1932) 216 Cal. 165.)

The incidents with MERS have nothing to do with your situation. In states that do not use deeds of trust, and use an actual mortgage as the security instrument, lenders must file an action for foreclose. MERS was hit with standing problems when they were unable to produce the original or even a copy of the promissory note, to prove that they had standing to foreclose. Additionally, MERS encountered problems in bankruptcy court in California when they attempted to lift the automatic stay to conduct foreclosure, because they were unable to show that they had standing.

In California, the note does not have to be transferred to the trustee to commence nonjudicial foreclosure, as symbolic delivery has been ruled to be acceptable. �As to the first alleged irregularity, it is our conclusion that manual delivery of the note and deed of trust was not necessary--symbolic delivery was sufficient.� (California Trust. Co. v. Smead Inv. Co. (2nd Dist. 1935) 6 Cal.App.2d 432, 434-435.)

Thus, the "produce the note" defense has never had any legal merit in California.

A further hurdle to your attempt to quiet title is the fact that you have not paid the underlying debt. �It is well established in the law that a mortgagor in possession may not maintain an action to quiet title, even though the debt is unenforceable because of the statute of limitations.� (Mix v. Sodd (4th Dist. 1981) 126 Cal.App.3d 386, 390); Grant v. Burr (1880) 54 Cal. 298; Booth v. Hoskins (1888) 75 Cal. 271; DeCazara v. Orera (1889) 80 Cal. 132, Spect v. Spect (1891) 88 Cal. 437; (Brandt v. Thompson (1891) 91 Cal. 458; Burns v. Hiatt (1906) 149 Cal. 617); Sterling Realty Co. v. Relfe (1942) 21 Cal.2d 164.