The Mystery of Servicer Non Stop Advances
Posted on December 4, 2013 by Neil Garfield
Since I entered the fray as the actual
attorney for clients, we are getting
down to the nitty gritty. Judges are
surprised to learn that the foreclosure case in
front of them was filed despite the payments
actually received by the alleged creditor through
third parties. In other words the case in front
of them does not actually present a default
from the creditor’s point of view even tough
the borrower stopped paying.
The primary payment we are focusing on today is servicer
advances which come in different flavors — non-stop, limited
and none. Most loans (96%) are subject to claims of
securitization regardless of what the current servicer or
trustee is telling you. And most of those (my guess is
around 75%-90%) come with third party obligors, which
is why there is so much confusion. Besides servicer
advances, the agents for the trust beneficiaries at the
investment bank who sold them the bonds received on
behalf of the bond holders, insurance payments and other
funds from other contracts designed to limit the risk
associated with the terms of the bond repayment of
interest and principal.
advances which come in different flavors — non-stop, limited
and none. Most loans (96%) are subject to claims of
securitization regardless of what the current servicer or
trustee is telling you. And most of those (my guess is
around 75%-90%) come with third party obligors, which
is why there is so much confusion. Besides servicer
advances, the agents for the trust beneficiaries at the
investment bank who sold them the bonds received on
behalf of the bond holders, insurance payments and other
funds from other contracts designed to limit the risk
associated with the terms of the bond repayment of
interest and principal.
When you do the math, you can easily see how the “lender”
could be overpaid by a multiple that averages 3-5 times,
even while the borrower is being pursued for yet another
payment or else losing a home. The dirty little secret, the
mystery behind these payments is that under common law
and statutory law there are potential causes of action
against the borrower for such payments, but the actual
creditor on the loan has been fully satisfied.
could be overpaid by a multiple that averages 3-5 times,
even while the borrower is being pursued for yet another
payment or else losing a home. The dirty little secret, the
mystery behind these payments is that under common law
and statutory law there are potential causes of action
against the borrower for such payments, but the actual
creditor on the loan has been fully satisfied.
Worse yet, those third parties have waived subrogation
or any right of action against the borrower to prevent multiple
parties from suing the same defendant on the same debt.
The insurers are mad as hell. But the servicers are curiously
silent — possibly because they are not really paying the
servicer advances which are instead coming from the pool
of funds held by the investment banker from the original
investment of the trust beneficiaries and the receipt of
insurance, credit default swaps, guarantors and even
sales to the Federal Reserve.
or any right of action against the borrower to prevent multiple
parties from suing the same defendant on the same debt.
The insurers are mad as hell. But the servicers are curiously
silent — possibly because they are not really paying the
servicer advances which are instead coming from the pool
of funds held by the investment banker from the original
investment of the trust beneficiaries and the receipt of
insurance, credit default swaps, guarantors and even
sales to the Federal Reserve.
The lender (Trust beneficiaries) have agreed to lend money
on the basis of interest only payments at a particular rate that
rarely coincides with any of the loans alleged to be in the pool.
Since they were sold the bonds first before the loan was made
(see “selling forward”), you can assume fairly safely that the
actual lender is the trust or trust beneficiaries, regardless of
what was put on the loan documents — which is why I say
that none of the loan documents are valid enforceable
documents and why the investors have sued the real
culprits (investment banks) stating the exact same thing.
on the basis of interest only payments at a particular rate that
rarely coincides with any of the loans alleged to be in the pool.
Since they were sold the bonds first before the loan was made
(see “selling forward”), you can assume fairly safely that the
actual lender is the trust or trust beneficiaries, regardless of
what was put on the loan documents — which is why I say
that none of the loan documents are valid enforceable
documents and why the investors have sued the real
culprits (investment banks) stating the exact same thing.
In one case I have currently pending in Dade County,
Florida, US Bank is putting itself through a ringer because
servicer advances have been paid in full to the creditor that
they acknowledge is the creditor. The Judge instantly recognized
that this defeats the allegation of default, if the creditor has
received and accepted payment. The attorney for US Bank
allegedly as trustee for the trust beneficiaries is pursuing a
strategy of getting the assignment of rents enforced. The statutory
requirement is that there be a written demand for rents, which
nobody ever made. And it turns out that the Trustee was
unwilling to go on record demanding assignment of rents
because the beneficiaries were paid in full exactly as set
forth in the prospectus and pooling and servicing agreement.
A call to the servicer confirmed they were not interested in
the rents, but curiously, despite PSA restrictions to the contrary,
the new “Trustee” US BANK is pursuing the foreclosure.
Florida, US Bank is putting itself through a ringer because
servicer advances have been paid in full to the creditor that
they acknowledge is the creditor. The Judge instantly recognized
that this defeats the allegation of default, if the creditor has
received and accepted payment. The attorney for US Bank
allegedly as trustee for the trust beneficiaries is pursuing a
strategy of getting the assignment of rents enforced. The statutory
requirement is that there be a written demand for rents, which
nobody ever made. And it turns out that the Trustee was
unwilling to go on record demanding assignment of rents
because the beneficiaries were paid in full exactly as set
forth in the prospectus and pooling and servicing agreement.
A call to the servicer confirmed they were not interested in
the rents, but curiously, despite PSA restrictions to the contrary,
the new “Trustee” US BANK is pursuing the foreclosure.
The Judge, who wants more proof of the advances which
we are only too happy to provide, instantly recognized that
if the trust beneficiaries were receiving their expected payment,
then there can be no default on the principal, which is prerequisite
to BOTH foreclosure and the assignment of rents. In this case
there were 52 payments received and accepted by the trust
beneficiaries after the alleged borrower default. We were
able to get this information through drilling down to loan level
accounting in our title and securitization reports. If there is
money owed it is not owed to the plaintiff in foreclosure
and it is not secured by a mortgage. see http://www.livingliesstore.com
we are only too happy to provide, instantly recognized that
if the trust beneficiaries were receiving their expected payment,
then there can be no default on the principal, which is prerequisite
to BOTH foreclosure and the assignment of rents. In this case
there were 52 payments received and accepted by the trust
beneficiaries after the alleged borrower default. We were
able to get this information through drilling down to loan level
accounting in our title and securitization reports. If there is
money owed it is not owed to the plaintiff in foreclosure
and it is not secured by a mortgage. see http://www.livingliesstore.com
We have since done the reports on other properties
owned by the same client and found out that the same
pattern holds true. In the one case we have already
argued, more than $70,000 has been received by the
trust beneficiaries from servicer non stop advances.
Payment is the ultimate defense for an action to recover
money. The fun part comes when the Judge starts asking
why these payments were not disclosed by the attorney
or his client.
owned by the same client and found out that the same
pattern holds true. In the one case we have already
argued, more than $70,000 has been received by the
trust beneficiaries from servicer non stop advances.
Payment is the ultimate defense for an action to recover
money. The fun part comes when the Judge starts asking
why these payments were not disclosed by the attorney
or his client.
There are other sources of third party payments from
co-obligors at the inception of the loan. The mystery comes
from the fact that the homeowner who signs loan papers
has no idea, because it was never disclosed to him/her/them
that the lender is not the payee on the note, not the mortgagee
on the mortgage, not the beneficiary on the trust deed, but
rather the trust beneficiaries who own bonds issued from the
REMIC trust (which as I have already reported was never
actually funded and never actually received title to the loan).
co-obligors at the inception of the loan. The mystery comes
from the fact that the homeowner who signs loan papers
has no idea, because it was never disclosed to him/her/them
that the lender is not the payee on the note, not the mortgagee
on the mortgage, not the beneficiary on the trust deed, but
rather the trust beneficiaries who own bonds issued from the
REMIC trust (which as I have already reported was never
actually funded and never actually received title to the loan).
In other words, the lender has agreed to one set of terms
that were never disclosed to the borrower in violation of the
truth in lending act, and the borrower has agreed to an entirely
different deal — which means that there is no “meeting of the
minds.” Both the lender and borrower wanted a completed
contract that would be enforceable and where title was clear,
but neither of them got it. The solution is to get rid of the servicer
and get rid of the investment banker, get an accounting
of all funds, repay the investors and work out a reasonable
deal with borrowers, most of whom would be willing to
sign a mortgage that was enforceable based upon
economic reality.
that were never disclosed to the borrower in violation of the
truth in lending act, and the borrower has agreed to an entirely
different deal — which means that there is no “meeting of the
minds.” Both the lender and borrower wanted a completed
contract that would be enforceable and where title was clear,
but neither of them got it. The solution is to get rid of the servicer
and get rid of the investment banker, get an accounting
of all funds, repay the investors and work out a reasonable
deal with borrowers, most of whom would be willing to
sign a mortgage that was enforceable based upon
economic reality.
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Filed under: AMGAR, CDO, CORRUPTION, Eviction, evidence, expert witness, Fannie MAe,foreclosure, foreclosure mill, GARFIELD KELLEY AND WHITE, GTC | Honor, investment banking,Investor, MODIFICATION, Mortgage, Motions, Pleading, securities fraud, Servicer, STATUTES,TRUST BENEFICIARIES, trustee Tagged: | assignment of rents, Dade County, default, investment banker, non stop servicer advances, pooling, Pooling and Servicing Agreement, Prospectus,PSA, Servicer advances, Title and Securitization Report, trust beneficiaries, US BANK
I have done the “Qualified Written Request” However when Bank of New York Mellon said they were not the owner of the Loan or the Note as reported by Bank of America, I have not been happy with the answer. Just as recent as October 2013, Bank of New York Mellon Employee told me BONY Mellon is not the one requesting the loan modification, they have no say in loan modification. She also told me they are not a Investor but Trustee for Investors. The employee stressed to me that Bank of America is the servicer and not to contact BONY Mellon anymore regarding the issue. She said that BONY Mellon is not a Lender and does not provide loans. I have numerous letters from Bank of America attorney’s who say Bank of New York Mellon is the Owner/Holder of the Note with 2 promissory notes having no endorsement and 1 promissory note that has a stamp of Michelle Sjolander. None of the documents have dates or anything. I understand that in Texas a non-judicial state, nobody has to be a lender or holder of anything. If they say the own the mortgage by assignment that is all that is required. I feel doomed. I have fought this for almost 3 years and now I have no fight left in me. My Deed of Trust stated that my lender is America’s Wholesale Lender a Corporation existing under the Laws of New York. I am a Texas Mortgage which slipped under the radar. My Deed of Trust and my Promissory Note both read that America’s Wholesale Lender a Corporation Existing under New York Law has a address of 4500 Park Granada, Calabasas CA and MERS is nominee and beneficiary in a administrative capacity and has no interest in the loan
Procedure is a Legal Question.
I just want all of you to know I have no attorney, All I had to know was that 3 years ago I was going to loose my home and I have fought the battle of my life to hold on to my home. My home is once again here in Texas up for Foreclosure by Recontrust/Bank of America Jan 7, 2014. I stay up night after night looking for ways to save my home and fight my battle. My property is in the Pool of CWABS 2007-2. I have spent more money in Land Records for Public information looking for fraud. I don’t just stay in my county, I look elsewhere hoping to find the names of Attorney-In-Facts used by Bank of America and Recontrust. I look for notary fraud and file complaints with the Secretary of State and get the complaint form notarized so they know someone has issued a complaint about the notary signature to the document. Everything I get from Bank of America it is in writing as I refuse to speak with liars over the telephone. What I have uncovered on my property just by using this blog has helped me tremendously. I still don’t have the money for a high priced lawyer but what I do know is that CWABS 2007-2 holds Account 155397447. I will not call it a loan because I have found no truth and fact that anybody from Bank of America, CWABS 2007-2 trust, Bank of New York Mellon, Mortgage Electronic Registration Systems, Inc, America’s Wholesale Lender, Recontrust all the parties attempting to steal my property have any one document that shows they own or hold the note to the deed of trust. For instance, I have been requesting for over 2-1/2 years for the Blue Ink Copy of the Promissory Note from Bank of America through a Qualified Written Request. You think these fools won’t even put lies in writing? Oh yes they do!! 11-4-2011 Promissory Note sent to me from Employee of Bank of America no endorsement no dates no nothing just my signature on the last page of the note. 5-22-2012 from Bank of America I get another copy of the promissory note because I was not satisfied with the answer that Bank of New York Mellon is the Investor and Holder of the Note. Attorney sends a note with a stamp on the left side of the note crooked like the stamp was on a post it note and shadowed on the copy with Pay to the Order without Recourse By: Michelle Sjolander, CountrywideHomeLoans dba America’s Wholesale Lender. My note does not have Countrywide on it anywhere except above the line which reads after recording return to Countrywide Mortgage……. Again, not satisfied and send a dispute of the note back wondering why it took 4 years and 9 months for the Assignment of Deed of Trust to be filed in the Land Records and then 5-1/2 years for a note to get a stamp on it. As recent as October 13, 2013 just a couple of months ago, I receive another copy of the note from Bank of America attorney and guess what????? You got it no endorsement. Guess the Post it note fell off the damn note. PSA reads MERS® acts solely as a administrative capacity and holds no interest in the mortgage. It also tells the Trustee and Master Servicer what must be done for the note to be properly securitized to the Deed of Trust under New York Trust Law. Countrywide, Bank of America, MERS®, Recontrust, America’s Wholesale Lender and Recontrust Appointment of Substitute Trustee’s did not do anything that they were to do to legally securitize the Mortgage. So I have reached out to certain individuals asking them to help prosecute those they know who are doing wrong in the banking system, Bank of New York Mellon, Bank of America, Recontrust and they refuse to do so. As far as I am concerned, they are just as guilty of the fraud as the bank(s) and they should go down with them. I no longer sympathize with these employees because I have no legal background but I damn sure know fraud when I see it and I see it all over the place. In our appraisal district. Type in Owner name Bank of New York Mellon. You get massive homes come up on the appraisal district that the owner is Bank of New York Mellon. Take the address to Bank of New York Mellon which is located under the owner name and google the address. Guess what folks the properties do not belong to Bank of New York Mellon. Write Bank of New York Mellon @ mbs.property.inquiries@bonymellon.com and tell them you have been told by Bank of America and their attorney’s that they are the Owner/Holder of the Note. You will get a reply back which reads Bank of New York Mellon is not a investor. BONY Mellon is the Trustee for Investors. BONY Mellon does not own the note or the Loan. Please contact your servicer and they will give you the servicer name a contact name and phone number to call. But when you tell the Bank such as Bank of America to put in writing who the Lender/Owner/Holder of note is, they send the letter back telling you the same exact thing. BONY Mellon even wrote to me and said we are not ergo the Lender, we have no say in foreclosures, loan modifications, past due fees, this is the operations of Bank of America. One lie after the other and Judges choose to play a fools game. Well I will say this in a saddened way and that is, I am the idiot who quit paying my mortgage. You can’t tell me who is the Lender, the owner/holder of the promissory note, you are not getting my hard earned money to stick in your pocket or to buy gift cards for your employees to entice them to commit fraud so you can get rich and throw the little guy in jail.
Sorry this was such a long message but hey some of us are out here fighting like mad and will possibly be on the street after the holiday but let me tell you this much, I can’t make an attorney rich, a bank rich because all in all it is a 100% risk no matter how you go. There is no Texas attorney who has written yet that they won a case in Texas. What they will say is oh no judge is going to accept you haven’t paid your payments to the bank. You don’t stand a chance, you haven’t paid your house payments. Texas attorney’s do your due diligence. Do like this idiot has done and fight for the homeowner and not the banks.
It’s no different than if Uncle Bob or the guy accross the street makes my payments but I never agreed to repay him. He can’t collect from me. The note itself can never form the basis for the claim of a volunteer or please demonstrate otherwise. FHA, VA, and conventional loans with pmi are easy because the borrower pays the premium for the insurance. An insurance company, or anyone, cant charge for insurance and then come after the insured for its claim payout with very limited exception, like intentional destruction maybe, if the ins co. later found out the destruction was intentional. Insurance is insurance, or used to be until gnma made its to the Issuer and not the alleged loan owner / lender – the Issuer has to become the “lender” on a defaulted loan (buy it / keep MBS holders whole) and then gnma will pay out to the Issuer! This blows my mind since the borrower is made to believe the premium he pays by way of fha mtg insurance or VA funding fee inures to the traditional lender and somehow benefits himself. I haven’t had time to fully digest that business yet fwiw – like does this m.o. negatively impact the borrower? When others, like fnma, guarantee payment, imo they similarly (like an insurance co with no rights of subrogation) have no basis for a claim against the borrower. FNMA has socialized the guarantee, which I think is a crock and a half. The only way fnma didn’t socialize the loss is if fnma created a pool for insurance, like some lenders did on certain loans that were “self-insuring” or if fnma otherwise got insurance on its guarantee with another entity. On ‘self-insuring’ loans, the interest rate was bumped on the (lousy) loans and part of that higher rate went into an insurance pool (probably went bust long ago given the number of lousy loans made but that’s if some other dumb business didn’t underwrite the self-insurance pools).
When you say this stuff, I sure would appreciate if you made it perfectly clear that even if a party did allege a cause of action against a borrower for a voluntary guarantee (and I say good luck – without meaning it), it wouldn’t be and couldn’t be under the note, and further is an unsecured claim remote from the mortgage loan. That’s probably what you mean when you say “other causes of action”, but you don’t make it clear enough imo that the claim would not and could not be under the note.
The servicer can just take that 150k and keep making payments to the trust as long as necessary. If it also turns in bogus reimbursement claims to fnma, I guess it’s looking good, right? I don’t have the entire formula even as speculation, but who’s to stop them from any of this?
A few years back in a case involving LaSalle (Lamy?), think it was, a court ruled that if a loan were securitized that the proper party to f/c was the sec trustee. As the facts of fnma’s guarantee, for instance, have unfolded, we see that’s just not necessarily so. And it’s also not so if it’s an fha or va loan unless everyone is waiving
the gnma ins / guarantee, since to get it, the Issuer must repurchase the loan to foreclose, way I get it. But then we have to, or they have to, get into why would an issuer pay a trust for a loan when that loan was never transferred to a trust?
Dammit KC I am harmless. Certain users here can verify that if you choose. I have one stinkin question I cannot ask on here..it is not legal, nor is it advise, its simple procedure statewide I cannot find anywhere.
Make a fake email if you wish.
of the Iqbal/Twombly to his complaint without ever affording him
the opportunity to amend the complaint he
filed in a ….(state) Court pursuant to (that state’s) notice pleading requirements. The Federal Rules support his concerns in two regards. First, FRCP 81(c) states“(1) Applicability: These rules apply to a civil action after it is removed from a state court.” Id.
(emphasis supplied).
Since removal jurisdiction was being challenged, (the plaintiff)
contends application of FRCP to LSI’s motion to dismiss was
improper. Further, (the plaintiff / homeowner) contends that refusing to allow him to amend his state court complaint after the district court
improperly removed it was unfair. See FRCP 8(e) (“ Pleadings must
be construed so as to do justice”)”
find case law which support amendment if it’s in fact necessary after proper consideration of “notice pleading” standard regarding one’s complaint as structured.
Something else occurred to me. If the bankster files a mtn to dismiss, can a borrower (or anyone) yet file a voluntary dismissal? It’s only, on info and belief, a mtn for sj or an answer which precludes vol dismissal. Jan? Anyone? A voluntary dismissal I believe is one without prejudice, is NOT RJ, so the borrower could amend as necessary and re-file. Why not? Pretty much what the banksters do. There would be a ‘time’ problem maybe if the bankster files a mtn to dismiss first, but that mtn might be rendered moot if a borrower files a vol dismissal before the bankster’s mtn to dismiss is adjudicated. I don’t think, but don’t know, that a removal qualifies as a responsive pleading. If not, if the removal action gives enough clues to warrant one’s voluntary dismissal, at that time (to regroup), maybe a plaintiff could file a vol dismissal and hit it again……?
That Determines the Path you take …..
But another case I am scheduled to testify in .. Mirrors yours and your choice.
Its about the household estate as warrantor/surety ..
Its about the households right to subornation ….
Its about the Money … where it went and what it was used for.
I don’t know how I can help you, I have already explained each case is different and State Laws Vary. You need an Attorney in your State.
https://www.aclu.org/racial-justice/alliance-californians-community-empowerment-et-al-v-federal-housing-finance-agency
justmenwi @gmail.com
We lost the Gentleman Agreement with the World Bank in 2010.
Other countries abandoning the US dollar
BRICS
My own community created CU Bucks 5yrs ago
THE A MAN.
That was a good one, got a good chuckle, I did.
Remember the same judges who do not follow due dilligence in foreclosure cases has no problem sending innocent people to jail.
Dumb stubborn Morons
File you claim to stop abandonment and adverse possession
http://www.keyt.com/news/tipline-investigation-foreclosure-activists-claim-billions-stolen-using-fraudulent-records/-/17671600/23175070/-/13su6o9/-/index.html
The trust names gifted to Bank of America by the FDIC
Section 1024.36—Requests for Information
36(a) Information request
2. Owner or assignee of a mortgage loan. A servicer complies with § 1024.36(d) by
responding to an information request for the owner or assignee of a mortgage loan by identifying
the person on whose behalf the servicer receives payments from the borrower. Although
investors or guarantors, including among others the Federal National Mortgage Association, the
Federal Home Loan Mortgage Corporation, or the Government National Mortgage Association,
may be exposed to risks related to the mortgage loans held by a trust either in connection with an
investment in securities issued by the trust or the issuance of a guaranty agreement to the trust,
such investors or guarantors are not the owners or assignees of the mortgage loans solely as a
result of their roles as such. In certain circumstances, however, a party such as a guarantor may
assume multiple roles for a securitization transaction. For example, the Federal National
Mortgage Association may act as trustee, master servicer, and guarantor in connection with a
securitization transaction in which a trust owns a mortgage loan subject to a request. In this
example, because the Federal National Mortgage Association is the trustee of the trust that owns
the mortgage loan, a servicer complies with § 1024.36(d) by responding to a borrower’s request
for information regarding the owner or assignee of the mortgage loan by providing the name of
the trust, and the name, address, and appropriate contact information for the Federal National 14
different forms of mortgage loan ownership:
i. A servicer services a mortgage loan that is owned by the servicer, or an affiliate of the
servicer, in portfolio. The servicer therefore receives the borrower’s payments on behalf of itself
or its affiliate. A servicer complies with § 1024.36(d) by responding to a borrower’s request for
information regarding the owner or assignee of the mortgage loan with the name, address, and
appropriate contact information for the servicer or the affiliate, as applicable.
ii. A servicer services a mortgage loan that has been securitized. In general, in a
securitization transaction, a special purpose vehicle, such as a trust, is the owner or assignee of a
mortgage loan. Thus, the servicer receives the borrower’s payments on behalf of the trust. If a
securitization transaction is structured such that a trust is the owner or assignee of a mortgage
loan and the trust is administered by an appointed trustee, a servicer complies with § 1024.36(d)
by responding to a borrower’s request for information regarding the owner or assignee of the
mortgage loan by providing the borrower with the name of the trust and the name, address, and
appropriate contract information for the trustee. Assume, for example, a mortgage loan is owned
by Mortgage Loan Trust, Series ABC-1, for which XYZ Trust Company is the trustee. The
servicer complies with § 1024.36(d) by responding to a borrower’s request for information
regarding the owner or assignee of the mortgage loan by identifying the owner as Mortgage Loan
Trust, Series ABC-1, and providing the name, address, and appropriate contact information for
XYZ Trust Company as the trustee.
http://files.consumerfinance.gov/f/201301_cfpb_final-rule_servicing-respa-interpretations.pdf