In Decatur, Georgia, The Atlanta Journal Constitution reports:
- [C]itigroup and Wells Fargo say [68-year old Zella Mae] Green has failed miserably as a homeowner and is nine years behind on her payments. And they want to take the house. “Nine years? There ain’t no way,” Green said. “Ain’t no way you can stay someplace for nine years without paying anything.”
- Determining whether a homeowner is truly years behind on a mortgage seems like a straightforward question. But Green and a string of lenders have been arguing about the matter in court for years now — with no resolution in sight. Her lawyer says the lenders have not even proven who owns the mortgage, let alone established how much Green owes.
- Green’s case illustrates the complexities of the modern mortgage market and just how difficult it can be to unwind the history of a mortgage. Most mortgages are originated by one lender, then sold — often repeatedly — to other lenders or groups of investors. Other companies are often brought in to process payments and manage escrow accounts.
- “I’m just trying to find out two things: What Ms. Green’s proper loan balance is and who she owes it to,” [her bankruptcy attorney Howard Rothbloom] said. So far, who owns the mortgage has not been resolved.
- A lender proves ownership of a mortgage by producing the “promissory note,” the document signed at closing in which the borrower agrees to the debt. The note is valuable and can be bought and sold by lenders. But like a personal check, it is only valuable in its original form. Green’s lenders have admitted in court documents they can’t find her note. Legal experts say that’s a big deal.
- “There is no excuse for the inability of mortgage lenders to know where the note is,” said Frank Alexander, an Emory University law professor and a leading expert on real estate law. “Without the note, you have virtually nothing. That is the one thing that is always locked in a vault.”
For more, see Mortgage market clouds who owns woman’s house.