by mikey1878 » Tue Oct 19, 2010 11:11 pm
It is not 100% true that if the chain of ownership is broken, the borrower owes no more. Generally, the foreclosure action can be lost because the plaintiff (lender) can't prove it is the owner of the note and mortgage. In this case, the borrower is still responsible to pay the last person who clearly was the holder of the note and that person has the responsibility for turning over the money to the right person. There are clear legal mechanisms for working this out, but its expensive, takes a long time, and until you get the right person to do the right thing. I would note that in some instances, the court could dismiss the plaintiff's case with prejudice, which would bar further actions against the borrower by the plaintiff because the court will have determined that the plaintiff didn't meet its burden of proving it owned the note, and therefore did not own the note.
It is not 100% true that if the chain of ownership is broken, the borrower owes no more. Generally, the foreclosure action can be lost because the plaintiff (lender) can't prove it is the owner of the note and mortgage. In this case, the borrower is still responsible to pay the last person who clearly was the holder of the note and that person has the responsibility for turning over the money to the right person. There are clear legal mechanisms for working this out, but its expensive, takes a long time, and until you get the right person to do the right thing. I would note that in some instances, the court could dismiss the plaintiff's case with prejudice, which would bar further actions against the borrower by the plaintiff because the court will have determined that the plaintiff didn't meet its burden of proving it owned the note, and therefore did not own the note.