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Home Buying Process

At the closing of a mortgage contract, the Promissory Note becomes irrevocably tied to the Deed for a fixed number of years. This is a Chain of Title. The Promissory Note is secured by the Deed.

This bond becomes a Trust. This Trust is commonly referred to as a Deed of Trust.

This means that the borrower/homeowner has signed over the Deed to the property to the lender as collateral on the Promissory Note.

Likewise, the lender promises to protect the Deed to the borrower’s/homeowner’s property until the Promissory Note is paid in full.

There are four (4) ways in which this newly formed Trust may be amended or broken by the borrower/homeowner:

  1. The borrower/homeowner pays off the Promissory Note in full at the end of the agreed term.
  2. The borrower/homeowner may pay off the Promissory Note prior to the end of the agreed term.
  3. The borrower/homeowner may seek another loan that pays off the current loan and changes the term (and/or other loan details) during which the new Promissory Note is to be paid.
  4. Lastly, the borrower/homeowner may default on the payment of the existing Promissory Note.

The first two options result in the borrower/homeowner receiving back the title to the property with no encumbrances.

These first two options result in what is termed a clear title.

The third option is called a refinance or "re-fi" for short.

The fourth option is called a foreclosure.

The lender has only one (1) way to terminate this Trust.

The lender may sell the Promissory Note to a third party who then becomes the new lender and owner of the Note.

In any of the four (4) options exercised by the borrower/homeowner or the one (1) option exercised by the lender, the Trust created at the closing of the mortgage contract is now dead.

Therefore, in the first two (2) borrower/homeowner options, the lender gives back to the borrower/homeowner a clear title.

This clear title is recorded in the County Clerk’s office.

In the case of a refinance or in the case of the selling of the Note by the Lender, a new Deed of Trust, representing a new bond between the borrower’s/homeowner’s property Deed and a Promissory Note is filed in the County Clerk’s office.

In the case of a bankruptcy, the lender files a new Deed with the County Clerk’s office stating that the lender is the new owner of the property.

In any of the five (5) options, because the original Deed of Trust was filed in the County Clerk’s office, the occurrence of any one of the five options exercised by either the borrower/homeowner or the lender terminates the Trust.

In Texas, the termination or death of the Trust must be recorded in the County in the same manner as was the creation or birth of the Trust.

The new Deed or Deed of Trust must be filed in the public records with the County Clerk’s office.

Many people buy homes and never really understand the home purchase process. Most people simply desire to take possession of and move into their new home. Most homeowners don't glean much about the purchase process they have just gone through.

The home buying process is complicated and statutorily burdened. The average home buyer, as was the case with the Plaintiff in the "Instant Case," even with the advice of counsel, doesn't have the background or experience to understand the degree of detail and legal burden inherent in dealing with mortgage documents.

With this in mind, a brief discussion of the house buying process follows.

When a person decides to buy a home but does not have the cash to purchase the property outright, the following legal steps apply:

  1. The Lender is the Original Mortgagee.
  2. The Original Mortgagee is the Holder and Owner of the Note.
  3. The Lender/Original Mortgagee names a Nominee and a Beneficiary on the original Deed of Trust.
  4. Now, the named Nominee and/or Beneficiary become potential inheritors of mortgagee rights from the lender.
  5. Under Texas State law, you cannot become the inheritor of the rights of Holder in Due Course unless you meet the state requirements of being either a Mortgage Banker or a Mortgage Broker.
  6. If you are involved in over four (4) loans a year, the State requires that you register with the National Mortgage Licensing System & Registry, the Texas Secretary of State and the Texas Department of Savings and Mortgage Lending.
  7. At the closing of the contract, the borrower/homeowner signs the Deed of Trust.
  8. At the signing of the mortgage documents, an irrevocable bond and chain is established between the Deed of Trust and the Promissory Note.
  9. Legally, this bond, commonly called the Chain of Title, is unbreakable except through complete payment of the loan by the borrower/homeowner or by a successful legal foreclosure after the borrower/homeowner defaults to pay on the Promissory Note.
  10. Next, in the State of Texas, the lender and borrower/homeowner mutually agree that the Deed of Trust should be filed with the County Clerk’s Office.
  11. Filing the Deed of Trust gives protective rights to both the lender and the borrower/homeowner.
  12. The financial interests of the lender are protected because the public can review the County records.
  13. The financial rights of the borrower/homeowner are protected because the lender is remanded by both Federal and State statutes to protect the Deed that will eventually belong to the borrower/homeowner.
  14. The original Deed of Trust is filed with the County Clerk’s Office.
  15. The lender has the right to use the services of a mortgage servicer. The mortgage servicer only has the right to collect payments on behalf of the holder of the Note.
  16. As time goes by, the lender may want to relieve itself of the obligations of its financing of the long term debt.
  17. To relieve itself of this obligation, the lender may sell the mortgage to a nominee, a beneficiary or a completely different third party.
  18. Once the lender, who is the original mortgagee and current owner of the Note, sells the Promissory Note to another party, that sale must be recorded in the public records in Texas because the original Deed of Trust was filed.
  19. This selling of the Note is called an assignment. The assignment can be the result of a sale or a transfer of rights.
  20. The third party to whom the Promissory Note is sold is designated as the "Holder in Due Course."
  21. With the proper recording of the mortgage assignment, the third party, who was the Holder in Due Course, now becomes the new owner and holder of the Note. As such, the new owner of the Note becomes the new mortgagee.
  22. The new owner of the Note assumes all of the "rights and responsibilities" of the mortgagee. By following this statutorily required procedure, the Chain of Title is preserved and the borrower’s/homeowner’s rights are protected.
  23. When the borrower/homeowner makes the final payment, he engages a title company to develop an "Affidavit as Release of Lien."
  24. The mortgage servicer and mortgagee are notified. Forty five (45) days after notification and no countermanding orders are issued by the mortgagee, the Affidavit is filed with the County Clerk’s Office.
  25. As a result, the County Clerk reverses the names of the grantor and the grantee. Thus, the borrower/homeowner becomes the grantee.
  26. Now, the borrower/homeowner has a Deed and a title to his property that is free of encumbrances.

The following Texas Statutes apply to Steps 1 thru 26 discussed above.

Therefore, the potential homeowner seeks a home loan from a qualified lender. (Texas Finance Code Sections 343.001(2)(A) and (2)(B)(ii)

To protect the interests of the buyer and the lender, a written document is created. This document is termed a "Mortgage."

The State of Texas defines this "Mortgage" document as both a "Security" and "Negotiable Instrument." (Texas Business and Commerce Code Sections 3.104(a), 3.104(a)(1), 3.104(a)(3)(A)(B)

Once the borrower/homeowner signs the mortgage and his signature is witnessed by either two disinterested parties or a notary public, then the lender may exercise his option under (Texas Property Code Sections 12.001(a) and (b), to file the Deed of Trust with the County Recorder’s Office. (Texas Property Code Section 11.001(a) 182

Once a Deed of Trust is recorded for public notification and review in the State of Texas, any modifications to this filed document must also be recorded. (Texas Local Government Code Section 192.007)

Once one opts in and files a Deed of Trust, they are precluded from opting out of making required filings in the future. (Texas Local Government Code Sections 192.001 and 192.007)

Any further actions that release, transfer, assign or take any other action related to the previously filed Deed or Mortgage, must be recorded at the County Recorder’s Office. (Texas Local Government Code Section 192.007)

(Texas Local Government Code Section 192.007) was established to insure the accuracy of the public record of land titles. (Texas Property Code Sections 11.001, 11.004, 12.001) (Texas Local Government Code Sections 192.001, 193.003)

In order to insure that the County Clerk does their job, they are required by (Texas Local Government Code Section 193.003(a) to maintain an accurate alphabetical index of all recorded deeds, powers of attorney, mortgages and other instruments relating to real property.

In addition, the County Clerk is required by (Texas Local Government Code Section 193.003(b) to maintain a cross-referenced index of the names of the grantors and the grantees for all of the instruments filed under (Texas Local Government Code Section 193.003(a).

At the signing of the mortgage, whether it is filed or not, the mortgagee accepts the fiduciary responsibility of protecting the collateral.

This collateral is the Chain of Title which establishes a legally irrevocable bond between the Deed and the Note which it secures. (Texas Business and Commerce Code Sections 3.104(a), 3.104(a)(3)(A)

The only time this irrevocable bond is legally allowed to be broken is when the transfer of the Deed from the grantee back to the grantor takes place because the mortgage servicer has certified that all of the debt has been paid or the property is forfeited because of foreclosure. (Texas Business and Commerce Code Sections 9.203(a)(b)(g)

As time proceeds, the borrower, known as the mortgagor in the Deed, makes all the timely payments to the mortgage servicer. At the end of the loan payment period, the mortgage servicer causes a payoff statement to be issued. (Texas Property Code Sections 12.017(a)(5)(A)(B)

Next, the services of a title company are engaged to produce an "Affidavit as Release of Lien." (Texas Property Code Sections 12.017(c)(d)

The title company executes an "Affidavit as Release of Lien." (Texas Property Code Section 12.017(d)

This affidavit must contain the names of the mortgagee, the mortgagor (Texas Property Code 12.017(e) and be sent to the address of the mortgage servicer in care of the mortgagee of record. (Texas Property Code Sections 12.017(f)

Unless countermanded by the mortgagee within 45 days of service (Texas Property Code Section 12.017(f), the title company will execute and record, with the County Clerk’s office, the "Affidavit as Release of Lien." (Texas Property Code Section 12.017(f)

This "Affidavit as Release of Lien" constitutes a full and final release of the mortgage (security instrument) from the property. The borrower, at this point, becomes the un-encumbered home owner. (Texas Property Code Section 12.017(d)(6)

Lastly, the County Clerk reverses the listing of the roles of the grantor and the grantee. (Texas Property Code Section 12.017(h)

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Education Phase

Sample Listing of
the Course Materials

  1. 15 page Qualified Written Request (QWR). Our (QWR) has been legally accepted by all lenders and banks to whom it has been submitted.
  2. QWR submission procedures & instructions
  3. Forensic Audit report documents and instructions
  4. Filed "Instant Case" complaint
  5. Court documents filed to date
  6. 400+ page Affidavit which includes:
    • Control Fraud documentation
    • Control Fraud Analysis
    • Coverage from Appraisal to the multiple securitization of your mortgage
  7. 677 public record exhibits documenting all facts pertinent to the "Instant Case"
  8. Federal statutes governing mortgages
  9. Texas statutes governing mortgages
  10. Over 200 "MERS" public record exhibits
  11. Securitization process flow charts
  12. Over 2,000 research documents used to prepare the "Instant Case"
  13. Instructions on collecting and organizing your mortgage documents
  14. List of lesser legal remedies
  15. Instructions on how to chronologically exhaust your lesser legal remedies prior to complaint filing
  16. Treatise on the importance of "Common Points" and how they influence the structure and legal strategy of a lawsuit
  17. Summary of administrative and logistic policies and procedures for managing cases
  18. Historical summary of what we have objectively determined works and does not work in today’s environment

Participation Phase

Documentation Development

Upon successful completion of the Education Phase, you have obtained the knowledge to begin utilizing the tools we are using to prosecute the "Instant Case" court fight. The most important tools are the documentation of fraud and the calculation of your damages. We help you to correctly document the material inaccuracies, fraudulent statements, identify fraudulent signatures, invalid releases of liens and unrecorded transfers and assignments of the promissory note and Deed of Trust.

Litigation Participation

After completing your documentation, you have to make a choice. Are you willing to participate free of charge in a pool of potential litigants? From this pool of litigants, we at Mortgage Endgame will data mine and analyze the documents submitted for common points of interest and general trends.

Once we have identified these common points and trends, the analysis is submitted to legal counsel. Counsel then files the pleading in court to begin the litigation process.

© 2012. Mortgage Endgame. All Rights Reserved.

Mortgage Endgame is not an accounting or legal firm. Mortgage Endgame does not give accounting or legal advice in any way. Nothing contained on the Mortgage Endgame website should be misconstrued to the contrary.

Mortgage Endgame is a Member Organization. It is acknowledged by all parties that when an individual(s) purchase(s) the Education Program from Mortgage Endgame, the payment of that fee includes membership in Mortgage Endgame. ALL information contained in the private "Members Only" section of the Mortgage Endgame website is intended for the sole and exclusive use of members only. No unauthorized use is permitted.

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McKinney, TX 75070 USA

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