Legal Question in Real Estate Law in California

Re: Quiet Title Action

You are correct there is precident which requires the original mortgage holder to foreclose. Contact me directly.

Re: Quiet Title Action

I disagree that there is any precedent requiring the original mortgage holder to foreclose. The current beneficiary is the party to whom the repayment is owed. Were that not so, there would be no market for mortgages or mortgage-backed securities, and as we all know these days, banks and other lenders have been bundling up packages of what we call mortgages (in California, notes secured by deeds of trust is what they usually really are) and selling them to investors, including Fannie Mae and Freddie Mac.

Also, I think you have "mortgagor" and "mortgagee" mixed up. The homeowner-borrower is the mortgagor, and the bank or lender is the mortgagee.

Finally, the ploy of insisting that the party seeking to foreclose due to the borrower's default produce the original note is not going to work. First, at trial, the first questions you are going to be asked are, "Did you borrow $X from Bank ABC?" You will either have to lie under oath or admit the existence of your obligation. (The next witness will be someone from Bank ABC to testify that they sold your note to the current holder). They will have a certified copy of the deed of trust you signed. They will have copis of the loan statements, and probably copies of your checks.

Finally, to the extent there may be a problem in that a borrower who is absolved of liability on his note by paying it off (voluntarily or by a foreclosure sale) is entitled to return of his cancelled promissory note, there is a solution for this: the party which lost or destroyed the note can post a corporate indemnity bond. See Huckell v. Matranga (1979) 99 Cal.App.3d 471.

I don't necessarily oppose innovative theories to delay or prevent foreclosure, but this seems to be in less than good faith and could be an abuse of process. I have not seen any good California authority holding that a beneficiary or trustee must show possession of the original note in order to conduct a trustee's sale.

Further, the "power of sale" clause is in the deed of trust, which is on public record, and a trustee or successor trustee's right to exercise, and method to exercising, a power of sale is tightly regulated by statute (Code of Civil Procedure sections 2924 - 2924h). The power of sale is automatically transferred along with an assignment of the deed of trust. Strike v. Trans-West Discount Corp. (1979) 92 Cal.App.3d 735. The identity of the trustee is a matter of record.