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Who owns/is liable for the note? Hehe. In the legal world, we call this constructive or inquiry notice in regards to who owns title to negotiable instruments. In a battle between subsequent buyers, the onus is on the purchaser of the new note to prove that they took FOR VALUE and in good faith.
Read here how the Court reacted to lenders' argument that they should be entitled to ownership even though they never conducted appropriate due diligence:
The best part: scroll down to page 8 where counsel for the lenders explains that his client just collects the money and is not actually a real party in interest. They are just a middleman. So, they are actually 2 or 3 steps removed from the process. The court did not react kindly to this argument.
http://www.floridalegal.org/Umbrella%20Groups/
MERS/Order%20Dismissing%20MERS.pdf
So, how is all this relevant to today's environment?
Sadly US politicians like President Obama have turned to these same middlemen to "save" American housing by re-financing. Yes, that's a great idea. Give responsibility to the same doofuses who DIDN'T EVEN DO A TITLE SEARCH on their mortgage notes.
WASHINGTON (AP) -- Billions of dollars the government is spending to help financially pressed homeowners avert foreclosure are passing through -- and enriching -- companies accused of preying on the people they're supposed to help, an Associated Press investigation has found
The companies, known as mortgage servicers, are middlemen who collect monthly payments from homeowners and funnel the money to the banks or investors who hold the loans. As the only link between borrowers and lenders, they're in the best position to rework the terms of loans under the government's $50 billion mortgage-modification program. The servicers are paid by the government if the changes keep homeowners from falling behind on payments for at least three months.
But the industry has a checkered history. The AP found that at least 30 servicers have been accused in lawsuits of harassing borrowers, imposing illegal fees and charging for unnecessary insurance policies.
More recently, the companies also have been criticized for not helping homeowners quickly enough -- delays that lead to more fees for homeowners and profits for servicers.
