The Mortgage Loan Processing Reform Act
To define and preserve home ownership in America by creating infrastructure that publicizes the sale and delivery of mortgage loans, establishes a means and procedure for lender/borrower arbitration for defaulted loans, create a clear definition between the implications of having a claim towards ones property deed and ones promissory note, security instrument.
The act may be sited as the “Mortgage Loan Processing Reform Act”
Sec. 2. Implication of Separation of Title and Property deed
When Applying the terms defined in Sec. 5, the limitations of having a claim to particular elements of a mortgage loan are also defined as:
- Having a claim to a “Tangible Promissory Note” as an “Intangible Obligee” would be making a claim to an “Intangible obligation” implying a limited authority in means of collecting in cases of defaulted loans.
- Having a claim to a “Security Instrument such as a Mortgage or Deed of Trust as an “Beneficiary” would be making a claim to an “alternative means of collecting a debt.” Implying that the beneficiary is a properly secured party filed into public record with a document that was eligible for recordation at the time that it was filed into public record.
Sec. 3. Municipalization of the transfer of mortgage loans.
- The private company Mortgage Electronic Registration Systems, Inc., will hand over data to local municipalities who will track the transfer and sale of mortgage loans in their county records.
- The county clerk shall record each deed, mortgage, or other instrument that is required or permitted by law to be recorded in a timely fashion.
- To release, transfer, assign, or take another action relating to an instrument that is filed, registered, or recorded in the office of the county clerk, a person must file, register, or record another instrument relating to the action in the same manner as the original instrument that was required to be filed, registered, or recorded.
- The transfers themselves will be made public data through the county recorder’s office
- Any sale or transfer of ownership of the Note without effectively assigning the Security Instrument would render the sale as selling an unsecured obligation.
- The assignment of a Mortgage or a Deed of Trust is a conveyance of an instrument concerning real property which must be recorded to be acted upon. United States Code considers that anyone certifying that a real estate instrument has been assigned when in fact it has not is guilty of a felonious criminal act. Pursuant to Title 18 USC Chapter 47 § 1021
Which says,”Whoever, being an officer or other person authorized by any law of the United States to record a conveyance of real property or any other instrument which by such law may be recorded, knowingly certifies falsely that such conveyance or instrument has or has not been recorded, shall be fined under this title or imprisoned not more than five years, or both”.
Sec. 4. Federal Oversight and enforcement
- Consumer Financial Protection Bureau is to oversee metrics evidence of fraud
- Consumer Financial Protection Bureau is to serve warrants for information and subpoenas for cases of suspected fraud
- Consumer Financial Protection Bureau is to create and publicize standard method for indentifying fraudulent aspects of loans and prospective fines and homeowner compensation packages for each issue of malpractice
- Open Claims with the Consumer Financial Protection Bureau is to become a means for blank/homeowner arbitration and settlement.
- Consumer Financial Protection Bureau is to prosecute any and all entities including but not limited to financial intuitions, banks, law firms, document fabrication companies and their employees that violate Title 18 USC Chapter 47 § 1021 to the full extent of the law.
Sec. 5. The Anatomy of a Securitized Loan. Definitions
In order to create a means of clear legislative intent, and in application of current or future legal precedence, the following elements of a securitized load will here forth legally defined as:
- The term “Mortgage Loan” shall be defined as a loan that is secured by real property through the use of a Tangible Promissory Note which evidences the debt and the encumbrance of property rights through the granting of a Mortgage or Deed of Trust which secures the loan. However, the word mortgage alone, in everyday usage, will be considered to mean mortgage loan.
- The term “Title” shall be defined as The union of all elements constituting the “legal right” to control and dispose of property. The “legal link” between a person who owns property and the property itself. The “legal evidence” of a person’s ownership rights (interest) in the property.
- The term “Tangible Promissory Note” shall be defined as a piece of paper that can be touched, that contains the promise to pay but the real significance is not the physical paper, but the legal rights which the paper confers, and hence the promissory note is defined by the legal debt . The Note is a tangible negotiable instrument that evidences the Intangible Obligation. However, the word Promissory Note alone, in everyday usage, will be considered to mean Tangible Promissory Note.
- The term “Property Deed” shall be defined as the document that transfers ownership of real estate. It contains the names of the old and new owners and a legal description of the property, and is signed by the person transferring the property. You can not transfer real estate without having something in writing, which is almost always a Property Deed. However, the word Deed alone, in everyday usage, will be considered to mean Property Deed.
- A “Tangible Obligee” shall be defined as The party whom is named on the Tangible Promissory Note as either lender or is properly named as Payee on a payee line physically affixed to the Tangible Promissory Note.
- A “Tangible Obligor” shall be defined as The Party whom signed the Tangible Promissory Note.
- An “Intangible Obligee” shall be defined as the Party that purchases the Intangible Obligation from the Intangible Obligor. They are seldom filed of record as the secured party to the Tangible Obligors Security Instrument.
- An “Intangible Obligor” shall be defined as the party that creates the Intangible Obligation using the Intangible Payment stream of the Tangible Promissory Note.
- The term “Securitization” shall be defined as the process used to pool, trade and sell financial paper – in this case, mortgage loans. This process is complicated and contains a massive amount of information that can seem daunting at first. However, this method is used by almost every financial institution, so it’s important for you as a consumer to understand it so that you can protect yourself. (Note: While the general concept of securitization is pretty consistent, the actual details are highly dependent on the jurisdiction within which the process is conducted.)
- Security Instrument – The Mortgage or Deed of Trust is seen as a Real Property Lien if filed of record and it is a separate contract listing an alternative means for collecting payment due under the Intangible Obligation, evidenced by the Tangible Promissory Note.
- The “Mortgage Electronic Registration System, Inc., (MERS)” is a wholly owned subsidiary of MERSCORP HOLDINGS, INC. and serves as mortgagee in a nominee capacity for the lender and subsequent assignees. An Electronic database that is used to track the intangible obligation as well as the servicing rights. They do not operate in the tangible world, and is not a municipal or federal organization. They are not a lender, nor have they acquired any rights to the Tangible Promissory Note.