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Re: Free and clear from the beginning

Posted by Rod Ciferri on August 04, 2011 at 0:05 AM

In Reply to: Free and clear from the beginning posted by Kristine-CA on August 03, 2011 at 8:12 AM

: Again, I ask that your insistence that homes are free and clear from the beginning be supported by some kind of case law or relevant case in CA.

: I see that you've added that's impossible to find such cases to your list. Nice touch.

: : Hey Rod Ciferri

: : I would like to commend you on your insight. However I think that the information you're sharing is totally outside of the box for most of the posters here.

: : Also I just want you to know that people are going to court and proving that their homes were “free and clear” from the moment they closed escrow.

: : In respect for the rules of Ward’s board I won’t get into details, plus this is not the time and or place to give a crash course on topics such as:

: :
: : • What is money?
: : • How is it created?
: : • What are the types of money?
: : • What is a borrower?
: : • Novation
: : • Real Property Secured Transactions
: : • Trust Creation (New York Common Law, Delaware Statutory)
: : • Accounting For Bankers vs. Accounting For Us
: : • The Basic Securitization Process
: : • Form 424(b)5 aka “Their Playbook”
: : • Pooling and Servicing Agreements
: : • Mortgage Loan Purchase Agreements
: : • Real Estate Mortgage Investment Conduits
: : • I.R.S. Publication 938
: : • Personal Property Secured Transactions
: : • U.C.C.-1 Financing Statements
: : • Investment Securities
: : • Contract Formation
: : • Failure of Consideration
: : • The True Investor
: : • Lack of Obligation
: : • Invalid Assignments
: : • Canceling Trust Deeds
: : • Unjust Enrichment
: : • Nullifying Unlawful Detainer Actions etc.
: : • Why it’s virtually impossible to find cases (where homeowners has won)

: : You’re definitely on the right “tract”.


While you post this question to Daryyle, it looks like the same question you posted to me.

The law of liens is common to all states, including California, who inherited from the common law, is that a lien is given by a lienor (borrower) promising to give up property of the lienor, to the lienee (lender) if a debt is not paid. In its very basic sense, the lienor has to have property to to give the lienee a security interest in. Wikipedia describes it thus: "In the United States, the term lien generally refers to a wide range of encumbrances and would include other forms of mortgage or charge. In the USA, a lien characteristically refers to non-possessory security interests (see generally: Security interest—categories)." One of those non-possessory security interests is a deed of trust. The deed of trust was originally treated in California as actually transferring the property of the lienor to the lienee, similar to a pledge. California, like other "title states" ruled that a homeowner does not get title until the deed of trust is satisfied, unlike a mortgage which attaches to property already owned. Koch v. Briggs (1859) 14 Cal. 256 (“It [a deed of trust] has no feature in common with a mortgage, except that it was executed to secure an indebtedness.”) However, this distinction was completely reversed in California in the 20th, and continuing into the present. Yulaeva v. Greenpoint Mortg. Funding, Inc., 2010 U.S. Dist. LEXIS 137988 (E.D. Cal., Dec. 20, 2010)("...although mortgages and deeds of trust are formally distinct, under California law, there is little practical difference between the two.")

"By statute the common law's position was altered so that the mortgagor would retain ownership, but the mortgagee's rights, such as foreclosure, the power of sale, and the right to take possession, would be protected. In the United States, those states that have reformed the nature of mortgages in this way are known as lien states. A similar effect was achieved in England and Wales by the Law of Property Act 1925, which abolished mortgages by the conveyance of a fee simple." Wikipedia on "mortgage loan". In order to "retain" ownership, one must have had ownership at the outset, before one gave a mortgage on property already owned.

That's why the homeowner always owns the property slightly before the security interest comes into being.

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