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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In general terms, when a Borrower, or his/her representative order a "SEC Audit",
this audit "Likely" will reveal:

1...Where the note is?
2...What Pool (or pools) went into?
3...Who the investors are?
4...Can be determined if the loan is "technically unsecured", depending of the
      Audit findings?
5...Will show third party payments tha are not properly allocated to my loan,
      and  making and inflated due amount, depending on the Audit findings?
6...What else?

7...Depending of the Audit findings, this will yield to a QWR, or Motion to Dismiss,
      and other motions?


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Moose
jose acosta wrote:
In general terms, when a Borrower, or his/her representative order a "SEC Audit",
this audit "Likely" will reveal:

1...Where the note is?
2...What Pool (or pools) went into?
3...Who the investors are?
4...Can be determined if the loan is "technically unsecured", depending of the
      Audit findings?
5...Will show third party payments tha are not properly allocated to my loan,
      and  making and inflated due amount, depending on the Audit findings?
6...What else?

7...Depending of the Audit findings, this will yield to a QWR, or Motion to Dismiss,
      and other motions?




There's some confusion here - how do you "order" an "SEC audit" ?

Moose

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I mean a securitization audit of my loan
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Moose
The "securitization" isn't something a borrower has standing in to order an audit of the sponsor, insurers (if any), the trustee or the investors. We're just along for the ride unless or until a lawsuit is filed. Even then, investor/bondholders have no standing in a foreclosure - they're represented solely by the Trustee who in turn, is represented by the Servicer, who in turn, uses a foreclosure mill law firm.

The sponsor of the securitization is typically a large bank and once the securitization has taken place and the securities issued, sold and now held by investors and managed by the Trustee, the only party who can audit those past processes is the SEC - unless one of the parties in interest files suit and acquires the evidence through discovery. As a borrower, you wouldn't even know that is going on.

What the trustee and bond market do with the bonds and how the trustee manages the cash-flows from the servicer is beyond the reach of a borrower. Securities law governs the representations made in the offering and contract law between the servicer and the trustee controls the relationship and processes between the trustee and the investors.

We as the debtors have no standing to audit those relationships.

To get what you're looking for:
1...Where the note is?
In the SEC filing for the trust, a "custodian" of documents may be named. That doesn't mean the notes are actually there, but it may identify a party that is supposed to know. Because of the value of those notes, they are typically stored in a vault in the trust department of a bank and will not be produced unless a court requires it. Obviously, as we have been pointing out on this forum for years, some of the originals simply no longer exist and the industry lives off affidavits of lost note when it comes to foreclosures.

2...What Pool (or pools) went into?

Pool/Trust - tomato/tomatto.  If you know the trust, that is the pool. A "pool" is merely an accounting appellation, not a legal entity and has no legal standing; the trustee that oversees it does.

3...Who the investors are?

There's no way to know that and because bonds are traded/sold, etc., it's not a static set of data. If you own conservative mutual funds or your employer's pension plan invests in RMBS' you might actually be an indirect investor in a bond secured by your mortgage.
There was an interesting program on NPR some months ago that helps explain this:
Toxie

4...Can be determined if the loan is "technically unsecured", depending of the Audit findings?

I don't believe you'll ever find a legal definition of "technically unsecured."

5...Will show third party payments tha are not properly allocated to my loan,
and  making and inflated due amount, depending on the Audit findings?
I'm not sure what "third party" would be willing to simply make payments to your servicer on your behalf. An audit of your payment history or the account history may show irregularities and having seen several, errors on the part of servicers are frequent and when they're not corrected, they tend to amplify the problem in favor of the servicer.

6...What else?
7...Depending of the Audit findings, this will yield to a QWR, or Motion to Dismiss, and other motions?
An informal audit of your payment history is something you can do yourself as long as you order an annual hardcopy payment history and hang on to it so they can't play games with the past data. Getting a professional (certified) audit of your records will cost something but if there are irregularities that the servicer wont correct via the QWR process, you may have to pay for the formal expert audit to generate evidence to use in a suit after you've exhausted the QWR letter-writing exercise.

Hope that helps.

Moose






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Wow, excellent response. Thank you for sharing your valuable knowlegde.

So, in general terms: if a borrower has been sued by one of these "soup-letters
trustees", one of the best tools to use is ordering the securitization audit?

I guess that the findings of the audit ultimately  will "convince" the servicer to soften, or
get a better loan modification terms,(with the help of a lawyer)

In the other hand, I thought that part of the money from the banks bailouts were supposed to be used also to help homeowners. That's why the question related to third party payments...  What are your thoughts?

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Bill
Jose,
   Before you look into a loan or SEC audit and what they will produce you need to contact an attorney.  These audits should only be done by an attorney.  Most of these audits are a scam.  They are of no use to a homeowner.  You can't just have an audit done and take it to a judge.  In order to use an audit, it will require that the "EXPERT" doing the audit appear in court and testifies.  A lot of the audits are just computer software.  Without this expert witness the audit isn't worth the paper it's printed on. 

If you are defending your home pro se, you are looking in the wrong direction.

If you have an attorney, you should discuss these options with him and see if he feels it's worth the money.  It won't be cheap. 
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Moose
jose acosta wrote:
In the other hand, I thought that part of the money from the banks bailouts were supposed to be used also to help homeowners. That's why the question related to third party payments...  What are your thoughts?



The bank bailouts were to keep the banks solvent. There were programs set up to allegedly help homeowner/borrowers but they weren't third-party payments. There were supposed to be "incentives" for servicers to modify loans but nothing got applied to a borrowers loan.

Moose

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William A. Roper, Jr.
Another intellectually bankrupt defense strategy propagated by a variety of ill informed defense foreclosure activists involves an assertion that somehow a plaintiff's receipt of some sort of mortgage mortgage insurance proceeds would absolve a defendant borrower of an obligation to repay.

This dog absolutely will NOT hunt for several reasons and those advocating the argument often undermine some fairly compelling defensive arguments by dissipating credibility and good will before the court with utter nonsense.

As a practical matter, most primary mortgage insurance master policies provide that a claim can be filed only after the amount of the loss can be established with some certainty.  This is at the END of the foreclosure process, NOT merely after a borrower's alleged default.  So the mortgage servicer typically COMPLETES the foreclosure, adhering to the mortgage insurer's express loss mitigation guidelines before making an MI claim.  So as a practical matter, the idea that the mortgage investor has paid all or a portion of the borrower's obligation is an impossibility.

Moreover, in paying claims, the insurer is typically going to be stepping into the mortgage investor's shoes.  The insurer might very well inherit a subsequent right of action to pursue a deficiency judgment in those jurisdictions where deficiency judgments are permissible and available to a mortgage creditor.

In most respects, a mortgage insurance policy is similar to a guaranty.  Suppose that SMITH borrows money from Colossal Bank and JONES guarantees SMITH's loan.  Colossal Bank has a right of action against SMITH.  It also typically has a right of action against JONES when SMITH defaults, failing to pay.  The precise character of the right of action against SMITH and JONES is going to depend upon the precise nature of the written guaranty and the laws of the jurisdiction.  But very often Colossal Bank is going to have a choice of pursuing either SMITH or JONES, whichever is the most economic, in the event of SMITH's default.  Of course, this is precisely the purpose of the guaranty.  Colossal wants assurance of a speedy and economic recovery.

While it might certainly be true that Colossal cannot recover the FULL amount separately from both SMITH and JONES, it is usually equally true that when JONES pays SMITH's debt to Colossal under the terms of the guaranty, JONES is going to usually have a right of action against SMITH for recovery of the amount JONES paid on SMITH's behalf.

That is, the existence of the guaranty does NOT usually absolve SMITH of liability to pay amounts SMITH rightfully owes.  Rather, the guaranty affords Colossal a speedier recovery from the guarantor, leaving the guarantor (JONES) to collect from the original debtor (SMITH).

Those who go into court with pleadings arguing that the mortgage investor might have already recovered the mortgage amount from an insurer or other guarantor are mostly wasting paper and destroying their own credibility!

It is OK and probably even a good idea to ask a few discovery questions about the existence of a mortgage insurance policy in those instances where such policies are believed or known to exist.  But absent some readily available IN HAND evidence of a prior payment of the mortgage balance by an insurer (which almost NEVER happens), pleading this nonsense is a pretty rapid way to torpedo your own case.

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Thank you guys, I really appreciate all your (not legal) advice. Thank You.
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