DSNews delivers stories, ideas, links, companies, people, events, and videos impacting the mortgage default servicing industry.
Issue link: http://digital.dsnews.com/i/220371
» Kansas rank: 34 90+ Day Delinquency Rate Foreclosure Rate September 2013 2.1% Unemployment Rate 1.3% 5.7% year ago 2.3% 1.9% 5.6% year-over-year change -6.7% -31.0% 1.8% Top County LabeTTe CounTy 90+ Day Delinquency Rate September 2013 3.1% Foreclosure Rate 3.0% year ago 3.1% 2.6% year-over-year change 1.9% 16.3% Top Core-based Statistical area ParSonS, KS 90+ Day Delinquency Rate Foreclosure Rate September 2013 3.1% 3.0% year ago 3.1% 2.6% year-over-year change 1.9% 16.3% note: The 90+ day delinquecy rate is the percentage of outstanding mortgage loans that are seriously delinquent. The foreclosure rate is the percentage of outstanding mortgage loans currently in foreclosure. State rank is based on the September 2013 foreclosure rate. All figures are rounded to the nearest decimal. The unemployment rate reflects preliminary September 2013 figures released by the Bureau of Labor Statistics. All other data courtesy of LPS Data & Analytics. FROM THE BENCH Statutory Requirements and Case Law in Kansas Regarding Assignments Kansas statute does not limit the methods by which mortgages can be transferred, nor does it provide a penalty for failure to record an assignment. If an assignment is not recorded, it provides that assignee must give mortgagor credit for any payments made to the last mortgagee or assignee of record. Kansas Statutes Annotated (K.S.A.) 58-2306 states: (a) Except as otherwise provided by this section, any mortgage of real property that has been or may hereafter be recorded shall be assigned or discharged by an instrument acknowledging the assignment or satisfaction of such mortgage, signed by the mortgagee or such mortgagee's duly authorized attorney in fact, assignee of record, personal representative or by the lender or a designated closing agent acting as a closing agent in the sale, financing or refinancing of the real estate subject to such mortgage who has caused the indebtedness to be paid in full upon compliance with K.S.A. 58-2309a, and amendments thereto, and duly acknowledged and certified as other instruments affecting real estate. Such instrument shall contain the name of the mortgagor and mortgagee, a legal description of the property and the volume and page in which the mortgage is recorded. According to K.S.A. 58-2321: In cases where assignments of real estate mortgages are made after the passage of this act, if such assignments are not recorded, the mortgagor, his or her heirs, personal representatives, or assigns, may pay all matured interest or the principal debt itself prior to the recording of such assignment to the mortgagee, or if an assignment of such mortgage has been made that duly appears of record, then such payment may be made to the last assignee whose assignment is recorded in accordance with the provisions of this act, and such payment shall be effectual to extinguish all claims against such mortgagor, his or her heirs, personal representatives, and assigns, for or on account of such interest or such principal indebtedness; and no transfer of any note, bond or other evidence of indebtedness, by endorsement or otherwise, where such indebtedness is secured by mortgage on real estate within this state, shall prevent or operate to defeat the defense of payment of such interest or principal by the mortgagor, his or her heirs, personal representatives, or assigns, where such payment has been made to the mortgagee or to the assignee whose assignment appears last of record under the provisions of this act: Provided, however, that in all such cases the assignee who may hold such unrecorded assignment shall have a right of action against his or her assignor to recover the amount of any such payment of interest or principal made to such assignor as upon an account for money had and received for the use of such assignee. As stated in Neosho Valley Inv. Co. v. Sharpless, 1901, 63 Kan. 885, 65P. 667, "It has always been the rule in Kansas that the failure to have an assignment of mortgage recorded does not invalidate the mortgage nor extinguish the mortgage lien. An assignment is merely a formal transfer of title to the instrument and does not affect the mortgage's priority." VISIT US ONLINE @ DSNEWS.COM Bank Western v. Henderson, 1994, 255 Kan. 343, 874 P.2d 632, notes, "One who acquires a recorded mortgage is not the possessor of a mere secret equity if no assignment of mortgage is recorded; a recorded mortgage is notice of its existence, and the holder is not obligated to disclose ownership by recording an assignment in order to preserve its lien priority." And on the priority of a mortgage, Middlekauff v. Bell, 1922, 111 Kan. 206, 207 P. 184 says, "The general rule that the first to record a mortgage has priority. The priority continues as long as the mortgage is not released. There is nothing in the statutes or case law which indicates that an assignment of a mortgage or the failure to record that assignment somehow affects the priority of the mortgage." In addition, K.S.A. § 58-2318 states: All assignments and releases of mortgages by a corporation shall be valid when executed by the president, vice-president, secretary, cashier, treasurer or any other officer of such corporation so authorized by corporate resolution. Several registers of deeds will not record an assignment of mortgage that is executed by an assistant president, VP, etc. unless an accompanying corporate resolution authorizing an assistant office is included with the document to be recorded. MERS Requirements Merscorp requires its members to assign a defaulting loan out of MERS, or Mortgage Electronic Registration Systems, Inc., prior to first legal action. MERS Rule 8(e)(i) states: The note owner or the note owner's servicer shall cause the Certifying Officer to execute the assignment of the Security Instrument from MERS to the note owner's servicer, or to such other party expressly and specifically designated by the note-owner before initiating foreclosure proceedings or filing Legal Proceedings and promptly send the assignment of the Security Instrument (in recordable form) for recording in the applicable public land records. Fannie Mae Requirements Federal National Mortgage Association (FNMA) also requires assignment of any Fannie Mae loan from MERS to the GSE or the foreclosing servicer prior to first legal action. Part VIII, section 107, titled 79