Consumer complaint received 2018-08-17
Product: Mortgage — Conventional home mortgage
Issue: Trouble during payment process — 
Company: CARRINGTON MORTGAGE SERVICES, LLC (WA)

On XX/XX/2005, myself, my wife and my mother entered into a 30-year fixed rate mortgage in the amount of XXXX XXXX XXXX XXXX dollars ( {$490000.00} ) with XXXX XXXX XXXX ( hereinafter original mortgage ). We all executed the original mortgage as joint tenants and entered into a Deed of Trust related to the original mortgage. 

Just before XXXX XXXX XXXX  went out of business, a salesperson came by our house and offered my wife a chance to refinance from our original mortgage and into an adjustable rate mortgage ( a new mortgage ). This was also around the time where the Department of Justice alleges that XXXX was targeting XXXX women and tricking them into refinancing out of their fixed rate mortgages and into riskier ( but more profitable for XXXX ) adjustable rate mortgages. My wife is XXXX by the way. 

As a result, XXXX convinced my wife to sign documents, she was told were just placeholders for a refinance and new mortgage. 

I informed XXXX that I was not willing to refinance the property from my existing fixed rate mortgage and into the adjustable rate mortgage. 

XXXX, using only my wifes signature and without my consent, refinanced our original mortgage ( fixed rate ) and into the current adjustable rate loan, currently being serviced by Carrington Mortgage Services LLC. 

When XXXX refinanced the property from the original mortgage and into the new adjustable rate loan, currently serviced by Carrington, the original mortgage was paid off as part of the refinance into the adjustable rate loan, but the Deed of Trust associated with the original mortgage was not reconveyed as part of that process, even though it is required by law. 

When XXXX paid off the original mortgage ( Note ) attached to the Deed of Trust, with the money used from the refinance, XXXX was required by California State law to reconvey, or transfer the Deed of Trust for the original mortgage to the trustor as part of the refinance. This did not happen. 

XXXX also told us that because the new adjustable rate loan was between XXXX and my wife only, that a new Deed of Trust would not be filed, that the " mortgage '' was really just a loan and an " unsecured '' loan. That may be why the original Deed was not reconveyed. Although this is not very common, as the future would prove, XXXX was more interested in making a quick buck in selling the new adjustable rate mortgage than they were in actually collecting on the loan, through a Deed of Trust. 

My complaint is that Carrington got ahold of the original Deed of Trust and because the original Deed of Trust did not go through the reconveyance process and is still on file with the XXXX County Recorders Office,  Carrington is using that expired and invalid Deed of Trust, or threatening to use that Deed of Trust, to foreclose on the home. 

In other words, Carrington is using a Deed of Trust that was paid off over twelve years ago as leverage to get me to pay on a loan that was paid off over twelve years ago, simply because twelve years ago XXXX XXXX XXXX broke the law and did not reconvey the Deed of Trust as required by California law. 

My concern is that Carrington will actually try to foreclose on the house, using this invalid and bogus Deed of Trust just because nobody noticed that the Deed of Trust did not go through the reconveyance process, more than ten years ago. I didn't even know this until Carrington 's lawyers presented it to me as a valid document, just last month. 

To the unknowing person, the Deed of Trust seems legitimate. Even worse, it would if you didn't know the Deed of Trust is invalid, the loan could be resold again and again, with each new buyer getting ripped off, because they believe the Deed of Trust in Carrington 's possession is the actual Deed of Trust for the loan they are buying. This could create an endless cycle of people getting duped. 

Maybe that's why the loan has bounced around from so many loan servicing companies over the past year or so. 

Even though Carrington is basically only threating me right now, they might just do it. They might foreclose using this bogus and invalid document, because its still on file. If they do, this would create a legal nightmare for myself and any unsuspecting buyer, thinking that the Deed of Trust being presented by Carrington is legitimate. 

California Civil Code section 2941 was established to avoid this exact issue. California Civil Code section 2941 ( b ) ( 1 ) requires the beneficiary, upon payoff, to execute and deliver to the trustee the original note, deed of trust, request for a full reconveyance. The trustee then executes and records the full reconveyance within 21 days of receipt of the documents from the beneficiary, delivers a copy of the reconveyance to the beneficiary and, upon request, delivers the original note and deed of trust to the trustor. ( Civ.Code 2941, subd. ( b ) ( 1 ) ( A ) - ( C ). ) In this case, because the Original Mortgage associated with the Deed of Trust in Carringtons possession was paid off by the refinance into the Adjustable Rate Loan currently being serviced by Carrington, the Deed of Trust associated with the original mortgage and in Carringtons possession, must be reconveyed immediately as  required by California Civil Code 2941 ( b ) ( 1 ). The law says Carrington is now legally required to fix this by reconveying the Deed. 

To do this, California State Law says that should a Deed of Trust not go through the process of reconveyance as required by the California Civil Code, within 75 days of fulfilling the obligations of the Note in a Deed of Trust, the beneficiary must substitute itself in as trustee and execute a full reconveyance. ( Civ.Code 2941, subd. ( b ) ( 2 ). ) California Civil Code also states that just because a Deed of Trust did not go through the process of reconveyance, it doesnt mean it is valid, nor does it extend the rights of the beneficiary under that Deed of Trust. After 75 days of fulfilling the obligation of a Note in a Deed of Trust, the Deed of Trust becomes a worthless piece of paper. But, youd probably have to be an attorney to know that. 

California State Law clearly states that if a Deed of Trust is not reconveyed within 75 days of the fulfillment of the Note associated with the Deed of Trust, the Deed is void and invalid. The Deed of Trust in Carringtons possession has been invalid for over ten years. 

Carrington is required by Law to abide by and comply with the Law. State Law requires them, or the beneficiary, to reconvey the Deed of Trust to the trustor immediately and not doing so or trying to use that Deed of Trust for any purpose would suggest that Carrington is potentially using the invalid Deed of Trust to engage in some sort of fraudulent activity. 

California State law also includes a process for a property owner to request the reconveyance of a Deed of Trust in the event the beneficiary or trustee is not willing or unable ( they went bankrupt ) to do so. This process does require the property owner to provide proof that the Note in the original Deed of Trust has or was paid. The proof I need would be as simple as a copy of the new adjustable rate mortgage, but Carrington and the previous loan servicing companies have not provided me with that document, despite multiple requests, including a request made as recently as three weeks ago. 

In fact, the only information myself or my wife have received is verbal information about the dates and amounts of the original fixed rate loan and not the adjustable rate loan. 

XXXX is out of business, XXXX XXXX XXXX has sold the loan to XXXX XXXX XXXX XXXX XXXX, the loan has bounced around from multiple loan servicing companies and nobody wants to even provide me with a copy of the adjustable rate loan so I can resolve this on my own. 

California Law requires that the Deed of Trust in Carrington 's possession be reconveyed to the trustor. They know about it and they know the law. They also know that withholding the information on the new adjustable rate loan, will make it difficult if not impossible for me to request the Deed of Trust be reconveyed without filing a lawsuit. The problem with that is, who do I sue? Counrtywide? XXXX XXXX XXXX? XXXX  XXXX XXXX XXXX XXXX? Carrington? One of the many loan servicing companies? The original Trustee? 

I would expect that there is some Regulatory Agency that can require Carrington to follow the law. The law says they must reconvey the Deed of Trust and the law describes a specific process to do that. 

If they do not reconvey the Deed of Trust, Carrington should be held responsible for knowingly breaking the law and potentially committing fraud.