Rushmore Loan Management Lack of Assignment Foreclosure Lawsuit

The complaint for this lawsuit has been written by two non-lawyers, asserting claims in connection with a foreclosure, mortgage-backed securities (MBSs), and allegedly forged documents. 

The complaint reviews the practices for registering mortgages and mortgage assignments. Normally, a lender records a mortgage as a lien against the property and files a copy with the county recorder’s office in the county where the home is located. If the mortgage is transferred or assigned to another party, that is added to the document according to the laws of the state, and the assignment is signed by the grantor/assignor. The purchaser of the assignment then records the transaction with the county recorder’s office. 

But in the case of MBSs, the complaint says, such recording rarely occurred. MBSs are securities created by buying mortgages, assembling them in pools, then offering them as investments. The investors have claims on the regular payments made by the borrowers (that is, the people who took out the mortgages to pay for their homes). The assignments are to have been delivered “at the inception of the MBS Trust,” the complaint says, but often are not. 

If a borrower defaults on mortgage, the owner of the mortgage can bring a foreclosure action. The owner of the mortgage must prove that the property is mortgaged, that it owns the mortgage, and that a default has occurred. In the case of MBSs, the complaint says, the mortgage assignment is often missing, so that there is no proof of ownership. 

In this case, the complaint claims, MBS trusts have often replaced documents with fraudulent or fabricated assignment documents. As defendants in this case and participants in such a scheme, the complaint names Rushmore Loan Management Services, Green Tree Servicing, LLC, US Bank, NA, and Mortgage Electronic Registration Systems, Inc.

The complaint claims that Green Tree and US Bank filed foreclosure papers on the plaintiffs in this action, Elmer Padua Vaquilar and Joselyn Giron Vaquilar, but that Green Tree did not have a proper assignment of the mortgage. The problems seem to have come to a head during bankruptcy proceedings, when the plaintiffs tried to obtain proof of the ownership of the mortgage. At this time, it seems yet another owner of the mortgage surfaced, but without a proper agreement for securitization of the mortgage. In fact, at least one document seems to refer to a different property altogether, although the complaint isn’t entirely clear in its allegations. 

The complaint’s essential charge is that the parties who foreclosed on the plaintiffs’ home had no right to do so, because they did not complete the proper documentation at the required time and/or cannot show proper documentation of ownership now. It alleges wrongful sale of the property and fraud, among other things. 

Article Type: Lawsuit
Topic: Consumer
Tags: Foreclosure, Mortgage-Related Unfair Practices, No Proof of Standing/Ownership of Debt