Can a lender assign a deed of trust to someone just to facilitate a forclosure?

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Our lender was Quick Loan Funding with mers as nominee for lender. Quick Loan was shut down by the board of corporation and then went out of business. Regions Mortgage signed up as lender through Mers, filed a notice of default as representative to Mers. Consequently set house for sale through a trustee and delayed by court proceedings. After the notice of set sale was published they sold it to HSBC (two months before the sale) and then sold the house again to HSBC the forclosing beneficiary. Are they allowed to do that? Wouldn’t they have had to start forclosure proceedings again when title was changed?
What I don’t understand is how can the forclosure still take place if the new lender did not re-file the notice of default? Shouldn’t the forclosure have to start over since the original forclosure was by another lender?
California isn’t a forclosure state that requires a court action. The loan was from Quickloan. Quickloan was shut down. Mers was on the note as nominee for lender and claimed that they assigned Regions Bank the note. They claimed regions was the new lender, but their was no assignment of deed of trust for Regions. A notice to set sale was recorded,then before the sale regions trustee then assigned a deed of trust to HSBC for 78,000.00 and then did a forclosure sale and said HSBC was our new lending. Something is fishy here, does any get this and is it legal?.
Oh yeah and bankruptcy was filed and the original debt discharged.

My home loan is at 6.5%, but paying an extra thousand a month will cut about 15 years off of my loan. However, I also realize I stand to gain a lot of compound interest investing that $ 1000 every month by just putting it into an index fund. The thing that has me wondering is if I pay down my home loan that much quicker, than I have that much more to invest from that point on.

Which is perceived to be the smarter plan and why?

19 Comments
  1. Reply
    kemperk
    January 24, 2011 at 3:14 am

    a mini confusion has erupted.within your query

    lenders can only provide deeds to people AFTER the foreclosure has taken place via
    the sheriff’s sale.

    JUST to be a lender in a foreclosure process gives them no legal power to transfer
    any deed………..the process must be completed legally.
    [unless you waived your rights to a foreclosure sale]

    Maybe you meant the note or mortgage?

  2. Reply
    linkus86
    January 24, 2011 at 4:11 am

    HSBC bought the debt (the deed of trust), not the house and only had to do a simple legal maneuver to have the plaintiff’s name changed on the foreclosure suit. HSBC doesn’t want the house but the money owed on it. They didn’t gain title to the property until the foreclosure court signed off on it. Still the house went to auction but obviously didn’t raise the price to cover the debt, so HSBC simply kept it. It was all legal.

  3. Reply
    tupac4ever88722
    January 24, 2011 at 5:51 am

    buy a movado watch

  4. Reply
    mel
    January 24, 2011 at 5:54 am

    A personal decison, but I would pay off the mortgage sooner so I am debt-free quicker.

  5. Reply
    Trevor M
    January 24, 2011 at 6:35 am

    bah, spend it on a really nice TV!!!

  6. Reply
    pink daisy
    January 24, 2011 at 7:07 am

    Put some money towards your principle and interest/

  7. Reply
    UNIQUE
    January 24, 2011 at 7:47 am

    pay off the mortgage!!!
    is a biiiiiig freedom

  8. Reply
    jassybaby
    January 24, 2011 at 8:04 am

    i think you should pay off your mortgage because stock will always be there but where you stay may differ…so first things first mortgage than have fun with it after that’s taken care of ………

  9. Reply
    tikitiki
    January 24, 2011 at 8:52 am

    First check your mortgage papers. A lot of times they’ll charge a fee if you pay too much towards your payment, or pay off a loan early. Read the fine print.

    I can’t say which is better, you have a good point both ways. Sorry can’t help there….

  10. Reply
    Depressed Champion
    January 24, 2011 at 9:31 am

    I think investing is the way to go. what kind of return would you be getting? If you invest it wisely you would probally be able to pay off your house even faster. I happen to manage a foreign exchange acount and can get you any where from 5 -30% a month. That’s just an option to look at. Or there are a lot of other investment opportunities. I actually pay for a house completely off returns from investing but that’s another story. Just make sure you make good investments and do your homework.

  11. Reply
    Dotch
    January 24, 2011 at 10:03 am

    If you can earn more return by investing in an index fund, then your answer it to devert monies to investments. However, you need to look at the average return of the index fund over the past 1-3 years to determine if it is worth the risk. It is all about your risk profile and your aversion to debt. Personally, reducing debt is always my goal. Plus, you will could potentially build your net worth faster by paying debt down.

  12. Reply
    kperry1911
    January 24, 2011 at 10:41 am

    Why not a bit of both… Pay off the mortgage with half and invest the other half.

    Two things to note: Mortgage is one of the few debt’s that not considered “bad debt”. What’s meant by this is that the interest is generally tax deductible, unlike interest on car loans or credit cards. Plus your home is an investment that should appreciate with time. In some situations where you might move to a new home before the mortgage is paid off, you may stand to make money just from the appreciation of property value above and beyond what you owe on the mortgage.

    Second, Investing in a mutual fund or ETF regularly will allow you to dollar cost average into investments and lessen the effect of having to time the market. My only concern is that you understand what you are doing. Index funds, or any non-money market funds don’t have a “rate” of return. They have returns measured by change in price from 1 period to the next + any possibly distributions. Over the long-term a diversified portfolio, or index will give you returns greater than just having your extra cash socked away in a bank account, but just be aware that there is no guarantee.

    In the end it’s your decision, so paying off the mortgage, investing, or a combination of both all sound like pretty good ideas. Sounds like you have a good situation to work with having the extra cash.

    -good luck.

  13. Reply
    josh_jeckel
    January 24, 2011 at 10:56 am

    Buy stocks

    your mortgage isnt really going to go down that much on a 1000 bucks a month. I am sure if you put 12,000 a year in stocks you can get a better return than the amount you would be saving on your mortgage.

    do the math, 1000 a month towards principal = how much interest savings a year.

    then look at how much you can make on stocks or a money market a year. But youll get all your money back in your mortgage anyway when you sell it

  14. Reply
    Frank Castle
    January 24, 2011 at 11:17 am

    Any decent Mutual Fund will return at least 20% annually.

  15. Reply
    Melody S
    January 24, 2011 at 12:04 pm

    The absolute smartest thing is to invest the money in a well diversified portfolio of stocks and bonds…probably easiest through mutual funds…with a good portfolio you can reasonably expect around 9-10% return over the long term (and this is probably pretty Conservative). That alone makes it a better choice then paying down a debt at 6.5%; however, when you factor in that you can deduct your home interest on your income taxes that lowers the effective interest rate even more. I’ve gone through the math with many clients and it is almost always a better option to save now and let your money grow and use the power of compounding interest.

    With all that being said though if it would make you feel better to pay off the mortgage early you have to take that into account as well….Life is not simply about numbers….peace of mind and such has to be taken into account as well…a good compromise might be to save $ 500 and pay an extra $ 500 toward the mortgage.

  16. Reply
    Quixotic
    January 24, 2011 at 1:02 pm

    The real question is: will the index funds return more than your cost for the mortgage? Given the tax benefits of a mortgage, your cost is probably around 4%/year for each dollar owed.

    Given that the long term return for the SP500 is greater than 10%/year, I believe the answer is that investing in index funds would be better. But you have to be prepared for a bumpy ride, some years you will lose a good bit of money, but on average you will make more than 10%, or 6% more than your mortgage cost..

  17. Reply
    Agueda F
    January 24, 2011 at 1:25 pm

    I think you could to pay a part of mortgage and rest to look at FOREX market.

    take a look at

    http://www.finanzasforex.com/prg

    they are a Private Club of Investments and offer very high interest funds. (+10% month)

    They have more 3000 investors just in this moment.

    you can gain access now for FREE.

  18. Reply
    ykchen913
    January 24, 2011 at 1:30 pm

    The answer depends on a few factors:
    (1) what is your tax bracket?
    (2) what is your expectation of investment returns from the stock market?
    (3) do you need some mid-term cashes?

    The investment gains in the stock markets are often taxable. However, your mortgage interests are often tax deductible. Therefore, your expected stock market gain of 10% per year could be the same as 6.5% mortgage interest rate. So, if your expected investment returns is less than 10%, then it probably better to pay your mortgage.

    Some conservative financial advisor suggests you pay off the mortgage first. This is because you are borrowing money to invest. Unless you are a good stock market investors, your risk is much higher of not paying the mortgage. Some aggressive financial advisor, on the other hand, suggests that you invest in the stock market. This is because higher risk often means higher returns.

    Furthermore, if you need extra cashes two or three years later, then you should consider stock market. It is easier to liquidate.

    For your reference, I put my extra money in the stock markets so that I can have extra cashes easily if necessary. And, it is probably important for you to lower your mortgage interest rate; 6.5% seems high.

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