In Reply to: Lien posted by Robert on July 31, 2011 at 9:25 AM
: There is a recorded lien on the property. You are crazy to assume that the lien cannot be perfected.
This is very simplified, but, here goes:
Yes, if the lien is a traditional one (backed up by original documents held by the right parties), then I have little chance of prevailing. If one of the more modern ones, I can assume the one who foreclosed ("lender" with credit bid) cannot prove ownership.
When the unlawful detainer comes (it would more properly be a forcible detainer), I can deny everything - forcing the lender to prove it is entitled to possession which would put title into issue. I don't believe that the lender can prove title in the loans that were handled by MERS. In fact, I believe the whole idea of using MERS was to obscure who actually owns title so that the lender would not be civilly and criminally liable. They face worse consequences by admitting they are the owner than just letting the property go.
Meanwhile, I have a quitclaim deed from the owner executed after the sale and recorded before their trustee's deed. Judicial notice of the foreclosure documents by the lender will only prove something was filed, but not the information contained therein. Additionally, the "lender" would be deemed to have whatever knowledge its agent MERS had, preventing it from being a bona fide purchaser and getting a conclusive presumption of title. By contrast, I will have taken title from a bona fide purchaser.
Since title would be in issue in the forcible detainer action, if I win, the forcible detainer judgment can be used as collateral estoppel precluding any other lawsuits by anyone whose agent was MERS (they would be "privies").
Would a title company insure title? If not, I might not be able to sell, yet it could be a rental property indefinitely.
I believe the homeowner loses a wrongful foreclosure case involving a MERS loan because he is in the position of plaintiff, and, thus has the burden of proof (and usually an obligation to tender the loan balance). In the position of defendant putting title into issue, the tables are turned and the "lender" has to prove title. I don't believe he can. That's why a lender never cross-complains against a homeowner in a wrongful foreclosure case. They know they are not a real party in interest and consequently cannot maintain a suit as plaintiff in which title is in issue.
I would only do this on the most "underwater" loans I can find. I wouldn't be interested in the properties most on this board would be interested in.
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