Foreclosure fails under the IRC.

A question arises whereas MERS lacks authority to execute the notice of default and the assignment of the deed of trust, and thus each of the foreclosure documents is contended void.

The courts have acknowledged that MERS could have properly acted under the deed of trust when such action was “required” and “necessary to comply with law or custom.” However, I contend that the true holder fails to establish that these two conditions had occurred.

First, an assignment of a deed of trust is legally permissible. (CA CC § 2934) Herein the claims state assignments are customary, “Because the lien of the trust deed is merely an incident of the debt, the assignment by endorsement and delivery of the promissory note accomplishes the transfer of the security without the necessity of a formal assignment of the trust deed itself. . . . [¶] The better practice, however, is to assign the mortgage or trust deed also by a formal written document that is duly acknowledged and recorded.” (4 Miller & Starr, Cal. Real Estate (3d ed. 2003) § 10.38, fns. omitted & italics added.)

The lien of the trust deed is not merely an incident of the debt, if that debt is discharged and satisfied to accomplish the lien holders business objectives. Where the business objectives result in the legal title to the estate having been lawfully transferred, the tax payer is obligated to report such incidents and acts. 

Herein the foreclosing party is alleged to have seized the estate of title allowing for the equitable interests to transfer immediately up[on the loans origination. The mortgage is now conditioned by a sale to a fiduciary into trust under a presumed conflict of business interests.

The assignment by endorsement and delivery of the promissory note cannot accomplish the transfer of the security without the necessity of some standard of evidencing consideration for carrying cost required to establish basis in the asset. The cost for transferring a whole loan  will be recognized by a subsequent journal entry, or other charge or write down. In this matter the foreclosure fails if the charges are taken as a sale into an isolated and remote entity to hold the estates title under the dominion of a statutory trustee in a NY formed indenture.

Foreclosure fails under the IRC.

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