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Legal Equitable

The document discusses the separation of legal and equitable title that occurs with a deed of trust under Texas law. It outlines the transfer of a mortgage note and subsequent assignments of the deed of trust. It notes that if any link in the chain of title is forged or void, then the entire chain of title is void under the legal principle of "nemo dat quod non habet" - one cannot transfer better title than one has. Finally, it discusses how a substitute trustee cannot foreclose on a property if there is a break or void link in the chain of title.

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A. Campbell
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157 views1 page

Legal Equitable

The document discusses the separation of legal and equitable title that occurs with a deed of trust under Texas law. It outlines the transfer of a mortgage note and subsequent assignments of the deed of trust. It notes that if any link in the chain of title is forged or void, then the entire chain of title is void under the legal principle of "nemo dat quod non habet" - one cannot transfer better title than one has. Finally, it discusses how a substitute trustee cannot foreclose on a property if there is a break or void link in the chain of title.

Uploaded by

A. Campbell
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Revision 1

Mortgage Note
Personal Property of Obligee
Deed Of Trust (DOT)
Under Texas law, the execution of a deed of trust severs the legal and
Mortgagee MERS as agent for equitable estates. See Flag-Redfern Oil Co. v. Humble Exploration
Beneficiary-DOT Co., Inc., 744 S.W.2d 6, 8 (Tex. 1987).
Obligee-Beneficiary-DOT Texas Local Government Code 192.001 (Filing of Record)

Equitable title
Legal title remains with MERS as
remains with the
Mortgagee.
mortgagor.
Mortgage Note Sold
Obligee Assignor DOT MERS as Mortgagee/Agent to
(Indorsed In Blank)
Beneficiary
Indorser-Indorsee
Beneficiary-Obligee Under Note

Assignment DOT 1MERS Registry void ab initio

Obligee Assignment DOT


Mortgage Note (In Blank) Assignment DOT 1
MERS as Mortgagee/Agent to
Unidentified Subsequent Indorsee 1 Memorialization
Of Note Negotiation Beneficiary for Unidentified
Purported Beneficiary-DOT
Indorsee 1

Assignment DOT 2 MERS Registry void ab initio

Mortgage Note (In Blank) Assignment DOT 2 Indorsee 1 Assignment DOT


Unidentified Subsequent Indorsee 2 Memorialization MERS as Mortgagee/Agent to
Purported Beneficiary-DOT Of Note Negotiation Beneficiary-Unidentified Indorsee 2

Assignment DOT 3 MERS Registry void ab initio

Mortgage Note (In Blank) Assignment DOT 3 Indorsee 2 Assignment DOT


Unidentified Subsequent Indorsee 3 Memorialization MERS as Mortgagee/Agent to
Purported Beneficiary-DOT Of Note Negotiation Beneficiary-Unidentified Indorsee 3

Void ab initio, nemo dat

Servicer Declares Default MERS Substitute Trustee Takes Equitable


For Identified/Unidentified Break in Legal Title from Mortgagor under DOT to
Purported Beneficiary-DOT Title Chain Execute Power of Sale

A person cannot obtain bona fide purchaser status under Texas law when Void ab initio, nemo dat
one of the links in the chain of title is a forgery. See Bellaire Kirkpatrick
Joint Venture v. Loots, 826 S.W.2d 205, 210 (Tex. App.—Fort Worth
1992, writ denied) (joint venturers could not obtain bona fide purchaser
status with a forged deed in their chain of title); Dyson Descendant Corp.
v. Sonat Exploration Co., 861 S.W.2d 942, 947 (Tex. App.—Houston [1st
Substitute Trustee Deed
Dist.] 1993, no writ) (forged deed is void ab initio and no person can be an
innocent purchaser of land where a link in the chain of title is a forgery);
Commonwealth Land Title Ins. Co. v. Nelson, 889 S.W.2d 312, 318(Tex.
App.—Houston [14th Dist.] 1994, writ denied) (stating same).

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