b'CMA Persuades Court to Publish Major Opinion on Forged Property TransfersbyT. Robert Finlay, Esq.Wright, Finlay & Zak, LLPT he CMA is pleased to announce thatAs it turned out, the seller did not own theor erroneous recordings.Unfortunately, it was able to persuade the Californiaproperty because the recorded trusteesthe original decision was not published.Court of Appeals to publish its recentdeed upon sale that appeared to convey opinion in WFG National Title Ins. Co. v. Wellstitle from the original lender to the sellerWhy does publication of this decision Fargo Bank, N.A., Second Appellate Districtwas forged.When the buyer subsequentlymatter?As an unpublished decision, this Case No. B294249 [ordered published Julydefaulted on the mortgage loan, the thirdcase would not have been able to be cited 7, 2020]. party lender discovered that its deed ofas authority in any future case raising trust, purportedly secured by the property,similar issues.The last published opinion The WFG National Title Insurance Co.was based on a forged trustees deed uponclearly reaching the same conclusion was opinion addresses a significant and,sale and, hence, worthless. issued in 1871.The recording of forged unfortunately, all too often occurringdeeds and reconveyances in an attempt problem affecting the rights and interestsThe third party lender then sued theto steal property or thwart a foreclosure is of secured collateral lenders, servicers,persons involved in the fraudulent schemenothing new butthere has been an uptick title insurers, foreclosure trustees andbut also sued the original lender and itsin such cases in recent years (includingperhaps most significantly, consumerloan servicer, arguing that they had a dutymore by strangers to the loan looking to borrowers.Specifically, the case putsto have discovered and prevented thetake advantage, sometimes even without a neat pin into arguments regardingforgery before the third party lender couldthe borrowers knowledge) and we the effect of fraudulent transfers of realget defrauded.The third party lenderanticipate even more such attempts once property interests on the rights of theclaimed that, as a result of the breach ofthe moratorium on foreclosures ends and parties affected by those transactions,that duty, the original lenders deed shouldborrowers scramble for forbearances and deflating the efforts to essentially steal thebe deemed to be junior to the third partyrefinances in the wake of the pandemic. property from those with legitimate right,lenders deed as a matter of equity. This will set up future disputes between title and interest in the property. the legitimate original lienholder and The court disagreed, holding that thesubsequent third parties who were In this case, some of the defendants hadoriginal lender and its servicer had nodefrauded into making loans on the same set up a sham transaction by which a sellerongoing duty to monitor public records inproperty under the belief they would be in purported to sell a property to a buyerorder to detect, and correct, a fraudulentsenior position.Publication of this opinion who obtained a mortgage loan from aor erroneous recording to protect thirdwill help stem the flow of such cases or, at third party lender to fund the purchase.parties who might rely on those fraudulentleast, expedite their resolution.Page 22Fall 2020Points of Interest'