Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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arkygirl
       
Wednesday, June 22nd, 2011, 10:20 am

Mortgage servicers are facing a billion-dollar crisis when it comes to advancing payments and interest to the secondary markets.

The problem, according to one panelist providing a mid-year outlook at the American Securitization Forum's annual meeting in Washington, D.C., is that mortgage servicers are growing weary of paying for property problems that aren't getting fixed.

Heavy foreclosure backlogs and other difficulties in liquidating distressed properties mean that mortgage servicers are dealing more and more with negative cash flows in their RMBS portfolios. Mortgage servicers are advancing payments into the secondary markets, even when the properties aren't paying.

The assumption is that the properties are going to be profitable again, one day. The concern is that more and more mortgage servicers doubt this scenario will actualize.

http://www.housingwire.com/2011/06/22/mortgage-servicing-faces-billion-dollar-secondary-crisis

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And borrowers are "growing weary" of sending payments into the black void of mortgage servicers that do not get credited or wind up in some weird "executive account" or other made up BS.

WHERE'S THE MONEY????


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Jim
"Mortgage servicers are advancing payments into the secondary markets, even when the properties aren't paying."


Doesn't this mean that some have been right to say that the borrower is NOT in default with the owner of the note, since the servicers are still paying the payment?
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Moose
Jim wrote:
"Mortgage servicers are advancing payments into the secondary markets, even when the properties aren't paying."


Doesn't this mean that some have been right to say that the borrower is NOT in default with the owner of the note, since the servicers are still paying the payment?


No. (See the T's and C's of your note.)

The "default" condition starts when the borrower's payment arrives (or is credited) after a specified "grace period."

The idea is the servicer has 90 days to get the "defaulted" borrower back on track - usually by assigning the account to a "special servicer" or at least another department within the same company - it depends on the PSA. The servicer expects to make up for the advances - and get the fees on top of it.

After that 90 day period, the servicer (again, under the PSA) doesn't have to advance any more payments and foreclosure proceeds.

Moose

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