The entity foreclosing on your home must prove it actually OWNS your loan. But after years of securitization, MERS registry transfers, and robo-signed assignments, many lenders can't prove they have standing. Learn how to challenge the chain of title and force the lender to prove its case.
When a mortgage is securitized, it's sold into a trust along with thousands of other loans. The promissory note must be physically transferred according to the Pooling and Servicing Agreement (PSA). When transfers are sloppy, late, or undocumented, the foreclosing entity may lack standing — a complete defense.
Broken Chain of Assignments
The plaintiff must show an unbroken chain of assignments from the original lender to the current foreclosing entity. Gaps, missing assignments, or assignments executed after the foreclosure was filed are defects you can challenge. An assignment made by an entity that no longer held the note is void.
MERS Authority Problem
MERS (Mortgage Electronic Registration Systems) is a database that tracks mortgage ownership. But MERS is not a lender — it's a nominee. Courts in many states have held that MERS lacks authority to assign mortgages, and that assignments executed by MERS are invalid. If your assignment was signed by MERS after the loan was securitized, challenge it.
PSA Violations — Late Transfer Into Trust
Most securitization trusts have a closing date specified in the PSA. Loans must be transferred into the trust before that date. If your loan was transferred after the closing date, the transfer may be void. This means the trust never properly owned your loan — and has no standing to foreclose.
Robo-Signed Documents
Mass-produced assignments signed by known robo-signers — individuals who signed thousands of documents without verifying the underlying facts — are legally suspect. If your assignment was signed by a known robo-signer, challenge its validity.
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