Who is the Beneficiary on the Note? It’s a Secret.

The Deed of Trust (DOT) we signed when we purchased our home was prepared by RPM Mortgage, then in Walnut Creek, CA,  on behalf of Najarian Loans (NL) who is the lender on the mortgage note. The DOT is one of those MERS specials, where NL is identified as the lender, but “MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the beneficiary under this Security Instrument.” I thought the lender was the beneficiary!? No matter. Section 25 of the DOT memorializes the obligation that the “lender may collect a fee not to exceed the maximum amount permitted by Applicable Law for furnishing the statement of obligation as provided by Section 2943 of the Civil Code of California.” Civil Code section 2943 requires “a beneficiary, or his or her authorized agent, shall, within 21 days of the receipt of a written demand by an entitled person or his or her authorized agent, prepare and deliver to the person demanding it a true, correct, and complete copy of the note or other evidence of indebtedness with any modification thereto, and a beneficiary statement.”

So on March 5, 2013 we sent Najarian Loans a letter requesting a beneficiary statement as required by the contact that is the DOT, and State law. We received a somewhat testy response from the attorney for NL and RPM saying

This office is in receipt of your correspondence dated March 5,2013, to Najarian Loans, lnc. in which you request a “Beneficiary Statement.” Additionally, this office is aware that on March 7,2013, you filed a Notice of Appeal regarding the Court’s dismissal of your Complaint against NL Inc. (f/k/a Najarian Loans Inc.), among others. In light of this latest action we must demand that you cease further attempts to contact any of our clients involved in that litigation. Any future requests to our clients are to come to this office in writing.

With regard to your March 5, 2013, request for a ‘Beneficiary Statement,’ we note that pursuant to Cal. Civil Code $ 2943(a)(1), a “Beneficiary” is defined as “a mortgagee or beneficiary of a mortgage or deed of trust, or his or her assignees.” Neither Najarian Loans, Inc. nor RPM Mortgage, Inc. falls under this definition: On May 26,2005, your loan, in its entirety, was assigned/transferred/sold to Countrywide Home Loans, now Bank of America. Therefore, any request for a Beneficiary Statement will need to be made to Bank of America, as our client does not have the information that you request.

While it is correct that we were told the servicing of the Note had been transferred to Countrywide, we never received any notice of who the Note was sold to. Our Declaratory Relief cause of action requests the identity of the current owner of the Note, as designated by proper assignments or allonges. So far all the defendants are adamantly opposed to providing us this information, and continually demurrer to the cause of action claiming there is no reason they should have to prove who owns the Note.

What makes this refusal all the more noteworthy, is that beginning January 1, 2011 new federal regulations (§226.39 of Regulation Z implementing the Truth in Lending Act) requires this exact disclosure whenever a mortgage loan is sold or transferred.

We have a contract (DOT) that says Najarian Loans is responsible for providing a “Beneficiary Statement.” As documented in my previous post, we have tried to determine who owns the Note, and MERS and Bank of America still provide conflicting information. And those who know, claim they should not have to tell us who owns the Note.

It’s tough to fulfill the terms of a contract when you do not know who the contract is with.

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