They call it “retroactive effective date” we call it “backdating” Ohlendorf Court weighs in and calls it potentially an invalid Notice of Default….

Here is the scenario, when a foreclosure is about to take place MERS (our friendly neighborhood software company) typically assigns a Deed of Trust to the party that supposedly owns your loan so that they can go ahead with a private non-judicial foreclosure sale.  This assignment often takes place after the Notice of Default is filed.  So, in order to make things appear nice and pretty and to try to convince everyone that the assignment was made before the Notice of Default was filed they will often indicate on the Assignment of Deed of Trust that it is “effective January 1, 2011” (for example) although the assignment is notarized on the let’s say April 15, 2011.

If the assignment of deed of trust was “effective” on January 1, 2011 then why wasn’t it signed and notarized on that date?  What happened on January 1, 2011 to make the assignment “effective?”  Did the trustee of the securitized loan trust call MERS and tell them the assignment is effective, prepare the documents and we will notarize it in a few months?  That seems unlikely.  Yet this is the game they play.  As Plaintiff counsel, this seems like another piece in the bogus scheme to foreclose on people by doing whatever they want, saying whatever they want, and expecting everyone to go quietly into the foreclosure night.

One court recently weighed in on this suspicious backdating of real estate documents, and stated that it may be improper and may taint the Notice of Default.  The case of Ohlendorf v. American Home Mortgage Servicing, No. CIV. S092081 LKK/EFB (E.D. Cal.2010, Mar. 31, 2010), discussed this phenomena when MERS made TWO ASSIGNMENTS both with back-dated “effective dates”:

“Nonetheless, plaintiff may have stated a claim against defendants that they are not proper parties to foreclose. Plaintiff and AHMSI, Deutsche, and MERS have requested that the court take judicial notice of the assignment of deeds of trust which purport to assign the interest in the deed of trust first to AHMSI and then to Deutsche. As described above, the deed of trust listed MERS as the beneficiary. On June 23, 2009, T.D. recorded a notice of default that listed Deutsche as the beneficiary and AHMSI as the trustee. Nearly a month later, on July 20, 2009, MERS first recorded an assignment of this mortgage from MERS to AHMSI, which indicated that the assignment was effective June 9, 2009. Eleven seconds later, AHMSI recorded an assignment of the mortgage from AHMSI to Deutsche, which indicated that the assignment was effective June 22, 2009. The court interprets plaintiff’s argument to be that the backdated assignments of plaintiff’s mortgage are not valid, or at least were not valid on June 23, 2009, and therefore, Deutsche did not have the authority to record the notice of default on that date. Essentially, the court assumes plaintiff argues that MERS remained the beneficiary on that date, and therefore was the only party who could enforce the default.

While California law does not require beneficiaries to record assignments, see California Civil Code Section 2934, the process of recording assignments with backdated effective dates may be improper, and thereby taint the notice of default. Defendants have not demonstrated that these assignments are valid or that even if the dates of the assignments are not valid, the notice of default is valid. Accordingly, defendants motion to dismiss plaintiff’s wrongful foreclosure is denied insofar as it is premised on defendants being proper beneficiaries. As discussed below, defendant is invited, but not required, to file a motion addressing the validity of the notice of default given the suspicious dating in the assignments with respect to both their motion to dismiss and their motion to expunge the notice of pendency.”

Interestingly, in Ohlendorf, the Bank made the usual “tender” argument, but the Court did not require a tender and instead stated:

A. Failure to Allege Ability to Make Tender
Defendants AHMSI, ADSI, Deutsche, and MERS argue that all of plaintiff’ claims are barred by plaintiff’s failure to allege his ability to tender the loan proceeds. Defendants assert that Abdallah v. United Savings Bank, 43 Cal. App. 4th 1101, 51 Cal. Rptr. 2d 286 (1996), requires a valid tender of payment to bring any claim that arises from a foreclosure sale. Abdallah, however, merely requires an allegation to tender for “any cause of action for irregularity in the [foreclosure] sale procedure.” Id. at 1109. Here, plaintiff asserts no causes of action that rely on any irregularity in the foreclosure sale itself. Indeed, the only claim addressed by the motions that may concern irregularity in the foreclosure itself is the wrongful foreclosure claim, which the court rejects below. Accordingly, the court concludes that plaintiff need not allege tender, and defendants’ motion is denied on this ground

Other Courts have agreed with this type of analysis in regard to the vailidity of the Notice of Default and whether or not this makes a foreclosure wrongful.  For example, in Castillo v. Skoba, Vice President of Aurora Loan Services, LLC 2010 WL 3986953 (N.D.Cal., November 30, 2010), the United States District Court in San Diego held (in granting an injunction to halt a foreclosure sale):

“The Court also concludes that Plaintiff is likely to succeed on the merits of his claim that neither Aurora nor Cal-Western had authority to initiate the foreclosure sale at the time the Notice of Default was entered. Under Cal. Civ.Code § 2924(a)(1), “the trustee, mortgagee, or beneficiary, or any of their authorized agents” are authorized to file a notice of default. Documents do not support a finding that either Cal-Western was the trustee or Aurora was the beneficiary on May 20, 2010 when the Notice of Default was recorded.
On a document dated May 17, 2010, MERS substituted Cal-Western as a trustee under the deed of trust. (Exh. 4) If Cal-Western had been trustee at this time, it would have had authority to conduct the foreclosure process. See Cal. Civ.Code § 2924(a)(1). However, this document was notarized on June 7, 2010, (id.), and thus it appears likely that Plaintiff can succeed on a claim that the substitution occurred no earlier than June 7.
Similarly, on June 8, 2010, MERS, the beneficiary under the deed of trust, executed an assignment of its beneficial interest to Aurora, with a backdated effective date of May 18, 2010. (Exh 6) Based on the face of this document, Plaintiff is likely to prevail on a claim that Aurora did not have authority to record the Notice of Default on May 20, 2010. See Ohlendorf v. Am. Home Mortg. Servicing, No. CIV. S-09-2081, 2010 U.S. Dist. LEXIS 31098 (E.D.Cal. Mar. 30, 2010) (recipient of backdated assignment may not have had authority to record Notice of Default).
The power of sale in a nonjudicial foreclosure may only be exercised when a notice of default has first been recorded. See Cal Civ Code § 2924; see also 5-123 California Real Estate Law & Practice § 123.01. Here, the Notice of Default appears to be void ab initio. Therefore, any foreclosure sale based on a void notice of default is also void. Accordingly, the Court GRANTS Plaintiff’s motion and enjoins a foreclosure sale based on Defendants’ noncompliance with prerequisites to engage in a foreclosure sale set forth in Cal. Civ.Code § 2924.


What does all this mean?  It means, if MERS is playing games with “effective dates” on your assignment of Deed of Trust that should at least be used to argue that the Notice of Default may be tainted.  You really have to look at the recorded chain of title and see what you find.  If there is improper backdating this may give rise to a challenge (not to the foreclosure “sale” – which requires tender), but to the foreclosure laws in California which require a valid Notice of Default before foreclosing.  For this challenge, the Ohlendorf case says no tender need be alleged.  For anyone that has been closely examining Assignments of Deed of Trusts involving securitized loans, this is an every day occurrence.  They call it “retroactive effect” I call it complete nonsense.  At least a few courts agree.



About Vondran Real Estate Litigation
Steve Vondran is the author of all blog posts on this website. He is a real estate lawyer who can represent you in financial elder abuse, distressed real estate issues, short sale, predatory lending, foreclosure defense, wrongful foreclosure, lis pendens, injunctions, state and federal real estate litigation, arbitration, real estate broker compliance, accusations, real estate zoning & land use, eminent domain and other real estate law issues. Call (877) 276-5084


18 Responses to “They call it “retroactive effective date” we call it “backdating” Ohlendorf Court weighs in and calls it potentially an invalid Notice of Default….”
  1. Craig says:

    This happened to me. Nod in nov 2010, assignment to cal-western in december 2011, and foreclosed march 2, 2011. Now what? Interesting that my title still shows i own the property… Help. Thanks. I lived in CA. Prop was in riverside county

  2. Foreclosure Defense Attorney Steve Vondran says:

    This gives people some things to look at. There is the Salazar case that provides hope for trying to have these foreclosure sales over-turned. This was important in the Salazar case because she tried to save her home in a Chapter 13 bankruptcy. For purposes like that, it might be worth looking into. If you want to discuss options we can be reached at (877) 276-5084.

  3. Ruth says:

    It is my understanding that when a Deed of Trust is assigned, the Deed and all of the privelages, loan status and obligation are also assigned. When they assign a deed, they assign it in whatever state that deed happens to be in, even if it is in default or in the foreclosure process. In that case, it is a simple paperwork fix to amend the Foreclosure Filings to reflect the fact that the Deed of Trust was assigned to a new company or person. It does not mean that the foreclosure process has to begin all over with the group that purchased the loan. Sorry

  4. Foreclosure Defense Attorney Steve Vondran says:

    Ruth, you sound like a foreclosure law pro, why don’t you write me an article on the topic and I will review it for comment. If it’s good, I’ll mail it into the judge in the case for his comment. Thanks for stopping by!

  5. Ron says:

    Rather than a foreclosure expert, could it be that Ruth represents the best interests of lenders?

  6. Foreclosure Defense Attorney Steve Vondran says:

    anything is possible in the world of foreclosure defense.

  7. jLawClerk says:

    Regarding Ruth’s comment as to assigtnment of all rights, title, interests etc. That seems basically correct with the caveats:
    (1) You generally cannot assign duties.
    (2) You cannot assign in violation of a legal obligation (indeed a duty)
    (3) Retro-active assignments may be effective between the parties (assignor and assignee) but not necessarily and fully (meaning, to the same extent) as to third parties, or in these instances the owners and the public.

    All of these could vary according to applicable State or other Law, but the basic business law principles are a definite stqrting point that will have to be addressed. Accordingly, I didn’t bother to research how each point might be dealt with in Calif or elsewhere. That is why contacting an experienced attorney as suggested by the sponsor of this, is always critical if you appear to have an issue.

    When duties are delegated versus assigned, then the person to whom (ususally the assignee of the benefit i.e deed of trust) are equally obliged to perform the duty or insure compliance with required law, to which his assignment is SUBJECT TO, the same as if the Owner transferred his DEED to the property; therefore you notice Deed of Trust provisions that allow the lender to calll the loan due immediately if transferred without their written consent etc.

  8. Anonymous says:

    Based on the evidence of backdated forged documents Plaintiff in Castillo v. Skoba, Vice President of Aurora Loan Services, LLC 2010 WL 3986953 (N.D.Cal., November 30, 2010) filed criminal charges against foreclosing agents AURORA, CAL-WESTERN including FANNIE MAE for the following crimes, and others that have not been discovered:

    Filing false, forged or fraudulent documents in a public office, a felony.
    Mailing fraudulent documents, a felony.
    Using fraudulent documents to extort real property, a felony.
    Converting real property based on fraudulent documents, a felony.
    Notary Fraud in furtherance of extortion, a felony.
    Fraudulently altering documents for one’s pecuniary gain, a felony.
    Fraud, predatory servicing and/or lending schemes, felonies.
    Passing counterfeit securities across state lines, felony.

    This tatctic can be very effective in destroying the presumtions of Trustee’s Deed which are conclusive unless they are rebutted in Unlawful Detainer claims.

  9. Vickie says:

    I have had this happen to me, while I am trying to get my loan restructured, MERS filed an assignment, I started looking around at others they have done. I have proof in hard copy that all the signatures on the assignment are forged even the Notary. The signature of supposedly the same, president, notary and witnesses are different in different counties. Hundreds of them are forged.

  10. spongebob says:

    We have a neighbor who is showing an assignment of deed of trust in the county system but no notice of default. What does that mean?

  11. If mers corp , was a power of attorney for or from a nother power of attorney their 2 many poa , here I a afect ,if the owner of the bank is under pool and services , their can be only one trustee not multip , was the trustee date from 2002 power of attornyed ,linda green ,if she was poa , then mers can’t sign off ,or america home services of america ,dba , wait a min , that is a default ,mers corp is not -s & l . That is a 3rd party their . To the benifiary owner of the bank dates back too 2001 . When did mers corp start signing that’s when u start your-( quit title)- cliam with your lawyer or a court county clerk . See that why the trustee should have file the owner trust so the title company could have saw that up front . Its kind of like if u don’t look u want find , but if their nothing to look at how will u find it , because the trustee will not show u nothing .so in other word all the banks are under a trustee contract . Its relly temp services , so they don’t care if nobody look then keep it on up . So people are ckecking now , so u a find . And some of u are finding rite now at as we speak , some of u a get good news in a day or 2 .and the trustee are running on a bond everything is insured . Fdic . Or call the company insurance or speak to ya lawyer and ask them is 3rd party legal if the trustee was the only one to run the company by trust ,no substitute ,should have took place , and if so that should have been reflexed to the owner , and then he sign mers corp as the trustee , but from what I see he was 3rd party .

  12. The trustee has a few flaws in the mist of this , its kind of like , who u no , if I do the da office then I can kind of do what I want , so all of this stuff is coming back around to correct , they have to make all of this stuff rite , and they got people wanting their stuff back up to the ears on compliants ,and people keep it on up onto they do something and fast too . The trustee and benifiary agent of these companies under pooling ,need to show and make all of this stuff rite . Their the problem .

  13. Felix says:

    I received a Notice of Default from Cal-western Recon recordation date 7-28-2009. There had been no substitution of Trustee (the original beneciary was the Trustee) up to this point). In the NOD CWR states it is acting in the capacity of either 1. a trustee, 2. a beneficiary, 3. an agent.

    In the Substitution of Trustee Cal-Western Recon substitutes itself, CWR, as the “substituted Trustee” by Cal-Western Recon as attorney-in-fact. A documented robo-signer signs this substitution of trustee, (this guy is an employee of CWR) on 7-13-2009 and the document is recorded 10-30-2009.

    I want to sue these bastards.

  14. Vicki says:

    I have been granted a trial against. Wells Fargo regarding the. Fraudulent filing of the substitution of trustee. Filed. By Cal western reconveyance the revision date on the form they used was after the signing date.

  15. Foreclosure Defense Attorney Steve Vondran says:

    Hi Vicki,

    That is something I see from time to time, the failure of the beneficiary to execute, acknowledge, and record the substitution of trustee under 2934a of the Civil Code. Hopefully things will work out for you! Best of luck. Attorney Steve

  16. Foreclosure Defense Attorney Steve Vondran says:

    Felix, we cannot give legal advice over the internet. We do hourly paid consultations that can include chain of title review and litigation analysis. If you are interested, please contact us at (877) 276-5084. Generally speaking, if the deed of trust trustee is not the one trying to foreclose then there should be a record substitution of trustee. There are a lot of games the lenders and servicers try to play like backdating, etc. Best of luck.

  17. Vicki says:

    Maybe I wasnt Clear in my last post. On the substitution of trustee there were three date dates, signed in Nov of 2008 notarized in Dec 2009, the revision on the form was dated Sept 2009. This is when their lawyer started shaking

  18. Foreclosure Defense Attorney Steve Vondran says:

    LOL. I love it. Good luck taking them to task on their shoddy foreclosure practices. SV

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