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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ResCap to Enhance High Risk Mortgage Servicing

John Vella joins ResCap to head Special Operations

Last update: 11:40 a.m. EDT Aug. 11, 2008
 
FORT WASHINGTON, Pa., Aug 11, 2008 /PRNewswire via COMTEX/ -- Residential Capital, LLC (ResCap), a wholly owned subsidiary of GMAC Financial Services, has hired John A. Vella as senior vice president and managing director of ResCap's Mortgage Special Operations business.
Mortgage Special Operations provides subservicing and asset management for high risk loans in the United States, Canada and the United Kingdom. ResCap is strategically expanding this business to align with a growing demand from hedge funds, investment bankers and other institutional investors for mortgage servicing and loss mitigation of their loan portfolios.
ResCap has appointed Vella to lead the enhancement of the Special Operations business, working closely with Thomas Donatacci, senior managing director of ResCap's Fee-based Servicing business. Enhancements include augmenting ResCap's Special Operations support team, and making additional investments in the company's industry-leading servicing platform to more precisely align with the complex requirements of institutional clients.
Vella will be based in California and will report to ResCap Chief Operating Officer Tony Renzi.
"We are very pleased to have John join our ResCap management team," said Renzi. "John has an extensive background in mortgage banking and the management of distressed asset portfolios. We are looking to John to direct a strategic expansion of our extensive servicing offerings to meet the needs of the current marketplace."
ResCap views the servicing of distressed assets as a key growth area for the company. There is a strong demand by third-parties to leverage the cost and operational efficiencies gained from using subservicers.
Vella has more than 24 years in the mortgage industry, including senior management experience at Household Automotive, Option One Mortgage, Freddie Mac and the FDIC. Prior to joining ResCap, Vella served as president and chief executive officer of EMC Mortgage, a subsidiary of JP Morgan Chase (formerly Bear Stearns subsidiary), responsible for the operations and management of an $85 billion servicing portfolio.
 

John Vella would certainly know MSF game with his "extensive background". 
"enhancement of special ops" is Code for Mortgage Servicing Fraud !
 
How's THIS for lame attempt at deflecting MSF blame?
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EMC Villains
It will be interesting to watch ResCap now that John Vella, former President and CEO of EMC and Tom Marano former Bear Stearns Global Head of Mortgages and Director of EMC Mortgage Corporation are working together again. Ex-Bear exec Marano named CEO of GMAC's ResCap - Forbes.com

It was Tom Marano, then head of Bear Stearns mortgage business who said in an e-mailed statement, June 2007, "None of the servicing decisions we make are driven by any activity or outstanding positions'' in the credit-default swap market.
http://www.bloomberg.com/apps/news?pid=20601087&refer=home&sid=a9LOhnBS.L5c

 
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ResCap Could Lose Servicing, Seller Contract with Fannie ...
Posted By PAUL JACKSON
November 17, 2008 12:16 pm

GMAC Financial Services has suggested in recent weeks that its mortgage lending arm, Residential Capital LLC, faces an increasingly uncertain future as losses mount and potential business partners rethink their relationships with the firm. Underscoring the dire situation facing ResCap at the moment, the company’s recently-filed 10-Q with the Securities and Exchange Commission suggests that Fannie Mae FNM: 0.501 -7.22%) could pull the plug on its seller/servicer contract with the troubled mortgage operation by early next year.

Capital issues are one thing; the inability to sell loans to Fannie Mae, and ostensibly other GSEs, are another and would likely mean certain death in a market where the vast majority of loan production must be sold to Fannie, Freddie Mac FRE: 0.6123 -8.61%) or Ginnie Mae.

ResCap said that its capital levels fell below a contractual net-worth requirement in its agreement with Fannie during Q3, forcing it to post an additional $200 million in collateral and to sell or transfer servicing on $12.7 billion in UPB from its servicing portfolio. The servicing sale, as of yet uncompleted to HousingWire’s knowledge, represents roughly 9 percent of Fannie-insured loans serviced by ResCap.

In exchange, Fannie has agreed to forbear yanking its contract with ResCap, the ailing lender said, but only through Jan. 31 2009. In the meantime, ResCap needs to find a way to boost its net worth over the $1 billion mark or risk losing the right to service all Fannie-insured or owned loans, as well as seeing a huge pullback in terms of the lender’s ability to sell loans to the GSE.

ResCap lost $1.9 billion during Q3, forcing GMAC to issue a “going concern” warning about the troubled lender. “Adverse market conditions have made it difficult for ResCap to maintain adequate capital and liquidity levels,” GMAC said in its earnings statement. “As a result, absent economic support from GMAC, substantial doubt exists regarding ResCap’s ability to continue as a going concern.”

A large part of those market conditions involve servicing advances — servicers like ResCap must continue to advance principal and interest on loans it services to a trustee when a loan becomes delinquent. The more borrower defaults, and the longer it takes to resolve them, the more capital that is needed to manage an outstanding float on advances.

ResCap CEO Tom Marano has been grounded and frank privately regarding the dire situation his firm faces, according to HousingWire sources that have spoken with him in recent weeks. He has reportedly said no servicer, ResCap or otherwise, is structured to manage seven million borrower defaults, and has come out strongly in support of streamlined loan modification criteria.

He’s also allegedly been behind the scenes of a proposal by the American Securitization Forum that would see servicers purchase delinquent loans directly out of transaction pools and deliver the troubled loans to the government for modification and workouts. ASF deputy executive director  pushed the idea on Capitol Hill last week, in a subcommittee hearing within the Committee on Government Oversight and Reform.

It’s clear that ResCap has little more to lose at this point. In fact, it said that while the $200 million collateral posting requirement thrust upon it by Fannie Mae would hurt its cash position, selling off servicing assets would be a net positive for the operation, since the servicer would no longer need to manage advances.

Nonetheless, having Fannie yank the entire contract and servicing would be a very bad outcome, one that would “adversely affect the company’s profitability and financial condition,” ResCap’s filing read. In other words: the fate of Residential Capital may now lie squarely in the hands of the U.S. government, since both GSEs are run in conservatorship by the Federal Housing Financy Agency.

Write to Paul Jackson at paul.jackson@housingwire.com


Always interesting to see what Tom Marano, former Bear Stearns's top mortgage trader, global head of Bear Stearns' mortgage business and former EMC Mortgage Corp. Board Member is up to these days along with pal John Vella, former EMC CEO, also at ResCap. IMHO they both need to be practicing their perp walks!
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