LAKEPORT >> Come Tuesday, the Lake County Board of Supervisors will continue its discussion of a potential land record audit. Talks began after several residents complained about mortgage issues and foreclosures.
Redondo Beach-based Attorney Allen D. West, who has successful quiet title cases on his record, will address the board as to what can be done. A quiet title lawsuit establishes ownership of property when it is in question, either because of liens or levies — which are known as clouds on the title and can result from mortgage loans being passed from one financial institute to another.
The topic has been discussed multiple times since last August, when the board considered the impact of Mortgage Electronic Registration Systems (MERS) on county records The system is a national database of home mortgages that can allow lenders to bypass county recorders to easily transfer mortgage rights.
The system is intended to improve efficiency. Before its implementation, lenders registered each mortgage sale with the local government, recorded in public records. MERS cut the recording system, saving time but blurring the trail of ownership each time a loan was sold between parties.
On May 19, the board began discussing whether or not to perform a land records audit, having heard from residents complaining of alleged illegal foreclosures. The purpose the discussion was to determine whether such an audit would be financially feasible, what could be done with any information garnered from it and to what extent the county can pursue litigation or regulation.
Ultimately the board the approved a resolution requesting state assistance to prevent real estate and mortgage fraud with a 4-0 vote, District 5 Supervisor Rob Brown was absent.
The resolution urges the California Attorney General to create and coordinate a task force to review the scope and extent of ongoing mortgage fraud.
“A solution needs to lie in Sacramento … but it’s a question of who’s door are you knocking on,” County Counsel Anita Grant said. “If the state doesn’t give you the hammer, then you don’t have one to wield.”
Lake County District Attorney (DA) Don Anderson explained to what extent the DA’s Office can pursue prosecution. “The law is uncertain on how we are going to enforce this,” Don Anderson said. “There is no criminal case that I can find that addresses this issue.”
Most foreclosure cases that have been filed with the DA’s office regard MERS and robo-filing, Anderson explained. However, because it is assumed that it is known mortgages can be assigned from bank to bank or other lending institutions, “the appellate court cases have said, in essence, the homeowner has absolutely no standing to bring the civil suit … the plaintiff is going to be one bank over the other bank, not the homeowner.”
Lake County Assessor-Recorder Richard Ford cited a report from the California Department of Real Estate that he said clarified that the county recorder is not responsible for verifying the validity, authenticity or legitimacy of the document that is recorded.
“In other words, the recorder is not responsible for detecting a fraudulent document and … does not look beyond the document itself,” Ford continued. “If the document meets the essential recording requirements and proper fees are submitted, the county recorder is obligated to and will record the document.”
Contact J. W. Burch, IV at 900-2022.
