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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This may be a very simplistic question - but it seems like a valid question that I have not come across.

Would the servicers records not name the Trust etc?

Does anyone here have a thought?

Good discovery item?

Appreciate any feedback.
Mike
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Moose
AZ/Mike wrote:
This may be a very simplistic question - but it seems like a valid question that I have not come across.

Would the servicers records not name the Trust etc?

Does anyone here have a thought?

Good discovery item?

Appreciate any feedback.
Mike


The short answer is the Trustee and it's a contractual arrangement (Pooling and Servicing Agreement) between the Trustee and the servicer(s). Accompanying the funds (aka "advances") is a computer report showing the status of the loans. The Trustee utilizes this data to determine which tranches in the pool are paid.

It's called a "waterfall" and it literally works like a series of different-sized buckets in one of those nifty rock gardens, where the top one fills first (for example the AAA bondholders), then the second below it (BBB), the third (CCC) and so on.  If there isn't sufficient cash flow, the folks at the bottom (DDD) may not get all they expected, hence, the value of their bonds might wind up being junk if the cash flows from the pool (payments from borrowers) dry up.

Hope that helps.

Moose




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William A. Roper, Jr.
AZ Mike:

Implict in Moose's answer is that the servicer is typically making a single monthly payment to a trustee in respect of all amounts due to that particular trust.  A single borrower's payment is embedded in that single payment to the trustee for which the report show the accounting as to the constituent parts of that payment.

Since the payment itself and the report implicitly shows ALL of the mothly cash flows from ALL borrowers, the servicer will resist the production of this document with extreme vigor and would probably even violate a court order of production and risk sanctions rather than produce it.

The servicer will also demand some sort of sealing or protective order associated with production.  There is nothing wrong with asking for the report.  But unless you have a very borrower friendly jusge (e.g. Justice Arthur Schack), I wouldn't expect to get it.  In fact, you could probably expect the servicer to appeal an interlocutory discovery order directing the production of this document.

You can be reasonably assured that IF you could get the judge to order the production, your judicial foreclosure case would probably grind to a complete HALT while the servicer appealed.  OR the servicer might voluntarily dismiss the case and refile, hoping to draw a different judge!  
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Moose wrote:
AZ/Mike wrote:
This may be a very simplistic question - but it seems like a valid question that I have not come across.

Would the servicers records not name the Trust etc?

Does anyone here have a thought?

Good discovery item?

Appreciate any feedback.
Mike


The short answer is the Trustee and it's a contractual arrangement (Pooling and Servicing Agreement) between the Trustee and the servicer(s). Accompanying the funds (aka "advances") is a computer report showing the status of the loans. The Trustee utilizes this data to determine which tranches in the pool are paid.

It's called a "waterfall" and it literally works like a series of different-sized buckets in one of those nifty rock gardens, where the top one fills first (for example the AAA bondholders), then the second below it (BBB), the third (CCC) and so on.  If there isn't sufficient cash flow, the folks at the bottom (DDD) may not get all they expected, hence, the value of their bonds might wind up being junk if the cash flows from the pool (payments from borrowers) dry up.

Hope that helps.

Moose






Moose

Thanks for the quick feedback!

Would you think the process is the same for a Freddie Mac loan serviced by our good friends at Saxon?

Naturally Saxon and Freddie Mac will disclose zilch at this point. That is what made me wonder about who Saxon makes the payment to every month.

Seem like a check or whatever they use must show some kind of a payee?
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William A. Roper, Jr. wrote:
AZ Mike:

Implict in Moose's answer is that the servicer is typically making a single monthly payment to a trustee in respect of all amounts due to that particular trust.  A single borrower's payment is embedded in that single payment to the trustee for which the report show the accounting as to the constituent parts of that payment.

Since the payment itself and the report implicitly shows ALL of the mothly cash flows from ALL borrowers, the servicer will resist the production of this document with extreme vigor and would probably even violate a court order of production and risk sanctions rather than produce it.

The servicer will also demand some sort of sealing or protective order associated with production.  There is nothing wrong with asking for the report.  But unless you have a very borrower friendly jusge (e.g. Justice Arthur Schack), I wouldn't expect to get it.  In fact, you could probably expect the servicer to appeal an interlocutory discovery order directing the production of this document.

You can be reasonably assured that IF you could get the judge to order the production, your judicial foreclosure case would probably grind to a complete HALT while the servicer appealed.  OR the servicer might voluntarily dismiss the case and refile, hoping to draw a different judge!  


Thank you Mr. Roper!

Doing battle in a BK11 case and it is getting very interesting.

Had a gut feeling your answer was probably the case - because someone long before me had to think of the same thing.

Grateful to all those who post thoughtful commentary.

Mike
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I have read a number of articles, not sure if factual, that in the case of Countrywide; they sold the same note over and over again to different Trusts.

A copy of the note was mailed to me by Bank of America's foreclosure mill and the only endorsement is pay to the order of Countrywide without recourse.   That would have taken place in 2006, although not dated. Shouldn't there be an endorsement to the trust they sold it too?
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William A. Roper, Jr.

Quote:
Dianne said:

I have read a number of articles, not sure if factual, that in the case of Countrywide; they sold the same note over and over again to different Trusts.


This isn't merely Internet myth and utter hogwash.  Rather, these unfounded assertions are very often at the core of the debt elimination scams that are used to swindle borrowers already in extreme distress!

When you hear from someone assuring you that this is the case, you can be reasonably assured that what comes next is a suggestion that you should get aboard the very latest scheme to have your house freed of this "unjust debt" involved in this fraudulent scheme.

There is an old adage "A fool and his money are soon parted!".  Listen to this nonsense and follow the siren of the scam artists at your own peril.

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William A. Roper, Jr.
To this, I will also add that scam artists and swindlers troll this Forum and other foreclosure defense sites looking for new victims.  Upon the very first indication that you have any tendency to believe this rubbish, they will begin to "befriend you" and then tell you about their "friend" or "acquaintance" whose debt was eliminated through some assure program.  They can help you with the introductions, etc.

Another variant is for these SAME scam artists to PRETEND to be a distressed borrower and to befriend others at the site.  LATER, they will falsely claim that THEY have benefitted from this sure fire approach and endorse it after they have won your confidence.

These are simply SCAMS and SWINDLES.  When someone tells you that they have identified a means of elimination of your debt you should obtain as much information as possible and then refer them for prosecution!
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Moose
I would also add that a major impediment to many of the scammers was the FTC's Mortgage Assistance Relief Services rule (MARS) back in late 2010 which essentially banned accepting an advance fee. Under this rule, mortgage relief companies cannot collect any fees until they actually provide a consumer with a written offer from the lender or servicer that the borrower decides is acceptable, and a written document from the lender or servicer describing the key changes to the mortgage that would result if the consumer accepts the offer. The companies also must remind consumers of their right to reject the offer without any charge.

Needless to say, large numbers of these people melted away into the woodwork and some have emerged with clever ways to try and get money from desperate victims.

Attorneys have an exemption so they can still practice law with an advance fee/retainer - but they have to follow the rules about holding client funds in a trust account.

In short - if someone other than a licensed attorney IN YOUR AREA asks you for a large chunk of money to "help" you with your loan modification or to help you fight a foreclosure, point them to the FTC site when you tell them to go away:

FTC-MARS information

Then file a complaint here:

FTC Complaint Site


Moose


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