Wednesday, November 17, 2010

FYI: DC AG Issues Q&A Regarding Opinion Letter on DC Nonjudicial Foreclosures

The DC Attorney General's Office issued the attached "Question & Answer" Guide to further explain the October 27, 2010 Statement of Enforcement Intent Regarding Deceptive Foreclosure Sale Notices, discussed in our prior update below.

Among other things, the attached Q&A explains the expected procedure for recording the interest of the foreclosing noteholder, including the recording of an acknowledged copy of the note with its endorsements prior to, or attached to, the notice of foreclosure sale.

Notes indorsed in blank are acceptable.  The accompanying affidavit need only indicate that the note is a true copy of the original, and identify the location of the original.

The Q&A also provides a recommended procedure for enforcing lost notes.

Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

Email:  RWutscher@kw-llp.com

http://www.kw-llp.com

 

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From: Ralph Wutscher [mailto:rwutscher@kw-llp.com]
Sent: Thursday, November 04, 2010 7:39 AM
To: Ralph Wutscher
Cc: socaloffice@kw-llp.com; dcoffice@kw-llp.com; Chicago Office
Subject: FYI: DC AG Issues Opinion Letter Affecting MERS, DC Nonjudicial Foreclosures

Washington, D.C. Attorney General Peter Nickles issued an opinion letter asserting that certain notices used to commence foreclosures in DC may supposedly mislead homeowners and allegedly violate DC's consumer protection law.  According to the DC AG, "a foreclosure may not be commenced against a DC homeowner unless the security interest of the current noteholder is properly supported by public filings with the District's Recorder of Deeds."

A copy of the opinion letter is available at:
 
According to the DC AG, "[a] noteholder's security interest in a DC home should normally be reflected in the public land records maintained by the District's Recorder of Deeds. Under District law, in contrast to the laws of many states, each deed or other document transferring a mortgage interest must be recorded with the Recorder of Deeds within 30 days of execution.  This requirement is not satisfied by private tracking of mortgage interests through the Mortgage Electronic Registration Systems (MERS)."          
 
As you may recall, DC has a non-judicial foreclosure process that begins with a Notice of Foreclosure on a form prescribed by the Recorder of Deeds. The form requires identification of a "Holder of the Note" and a "Security Instrument recorded in the land records of the District of Columbia."
 
According to the DC AG, "[t]he homeowner who receives such a notice is entitled to presume that the recordation of the security interest complies with District law, and that each intermediate transfer of the security interest between the original maker of the note and the current holder of the note is documented in the public record. ...When a foreclosure sale notice misrepresents to a homeowner that the foreclosing noteholder has a recorded security interest, the homeowner may fail to seek legal help in determining whether there may be a good basis for challenging the foreclosure in court.  Misrepresentations of material facts, when made to homeowners or other consumers, violate the District's Consumer Protection Procedures Act, which is enforced by the attorney general."   
 
The enforcement statement invites "homeowners or their advocates" to inform the Office of the Attorney General (OAG) if foreclosures "continue to be commenced or pursued with deceptive foreclosure sale notices" in order that the Office may consider bringing enforcement actions to stop foreclosure proceedings and seek restitution for consumers.  
 
MERS issued a press release response, which is available at:
 
 
Let me know if you have any questions.  Thanks.
 

 

Ralph T. Wutscher

Kahrl Wutscher LLP

The Loop Center Building

105 W. Madison Street, Suite 2100
Chicago, Illinois  60602
Direct:  (312) 551-9320 

Fax:  (866) 581-9302
Mobile:  (312) 493-0874

RWutscher@kw-llp.com

http://www.kw-llp.com

 

NOTICE:  We do not send unsolicited emails.  If you received this email in error, or if you wish to be removed from our update distribution list, please simply reply to this email and state your intention.  Thank you.

 

Our updates are available on the internet, in searchable format, at: http://updates.kw-llp.com