(OP-ED) — The author of this post is a consultant to attorneys on foreclosure and chain of title matters and none of the following opinions should be constituted as legal advice or seek to guarantee a legal outcome. It posits what this author sees as what is to come. It may not be the “whole new way of life” everyone thinks is going to take place due to this pandemic.
This post is not for the faint of heart nor is it designed to make you more paranoid than most of you probably already are. It is designed to impart some common sense rationality into dealing with the post-traumatic issues of what we collectively are all perceiving as a “crisis”.
Some of us think this whole thing is overblown. The majority however have unknowingly allowed the “crisis” to replace common sense with survival fear … and rightly so. It’s one thing to think that the coronavirus was just going to stay put in China when in fact, we have such an upwardly mobile society that everyone has been instilled with traveling to different parts of the world, be it on a plane, on a cruise, whatever … no one expected this would hit America and I believe we were all duped as to the “numbers” and the “purpose” for COVID-19.
Here are some interesting “takes” I’ve picked up on over the last couple of weeks …
- Chinese-Americans who are loyal to this country have stated to me that China well understated the numbers of dead and infected as the result of the viral spread there.
- The understatement was intentional, to lull us all (and I mean the World Health Organization (WHO) and the countries affected by the virus, including America) into a false sense of security so we would continue to go on about our daily lives as if this virus really didn’t matter.
- Knowing that we were already embroiled in political turmoil in this country, we’ve been “played” by the Chinese in a further effort to destroy the credibility of many of our elected leaders and further create political dissension in our every day lives.
- Most of the world was not medically ready for another pandemic. If WHO was really concerned with the spread of this virus, it should have reacted more quickly when it was observed that the virus was spreading outside of China’s borders.
- We can all point fingers at our government for being “reactive”, because that is how our government has always been … reactive instead of proactive. We weren’t ready for the virus when it hit our shores and we sure as hell aren’t ready for it now.
- Our medical systems in this country rely too much on non-essential and boutique surgeries and were not ready to deal with massive shortages in critical care supplies and labor.
- Our government’s medical “advisories” and social “responsibilities” were lacking in keeping its undisciplined citizenry safe from each other, allowing for Darwinistic opportunities to avail themselves upon an unsuspecting public.
- Instead of heading off the pandemic “at the pass”, state and local governments were slow to react to contain the virus and identify the “vectors”, which is what South Korea did when it first became aware of the invasion of the virus.
- The saving grace was that most state governments went above and beyond the federal measures enacted to stop evictions and foreclosures during the coronavirus outbreak.
- The not-so-saving grace is what happens after the fallout rears its ugly head, the supply chain breaks down in certain quarters and the economy can’t put enough people back to work fast enough to recover from the shock the country took in the 30-60 “stay in place” periods.
This is where thinks get “quirky”.
As was explained in some “insider” memorandums which I managed to retrieve through my back channels, the mortgage loan servicers (especially on these MERS-originated mortgages) have to pay advances on the distribution dates to the investors who funded the loans through the various REMICs (Real Estate Mortgage Investment Conduits).
There were (at last count) roughly 6.6-million people that applied for unemployment benefits, despite the economic “stimulus” package. In my twisted mind, this is like getting a hand job by a hooker, wherein the “wham bam” happens and then you realize the relief was only temporary and you’re right back at the stress level you started from before “the act” happened.
The mortgage loan servicers who handle the payments to the REMICs (the advance payments of principal and interest on every securitized loan) every month on the distribution date, have to pay those advance payments whether borrowers make those payments or not. I hope you got that. No matter (during this crisis) whether you made your monthly mortgage payment or not, you are NOT in default because the servicer has been making your payments anyway. They just won’t tell you that.
The problem becomes worse however when the servicers have to make these payments regularly over time, believing that they can collect the the past due payments from the borrowers (who are out of work or close to being out of work or short on funds) who are wanting a forbearance on their mortgage loans. This means the servicers would have to consider putting the payments (including interest) on the back end of the loan. This means that for those of you who (for example) were on “Payment 22” of your amortization chart on a 30-year fixed rate loan, you’re asking for Payments 22, 23 and 24 (plus interest) to be put on the back end of your loan, which is compounding interest upon principal upon interest. Let’s face it, most Americans do NOT have the reserves to make the mortgage payments past one month, which is why they had to borrow the money to buy the home in the first place.
Now the mortgage loan servicers are stressed financially because the payments have to be paid into the securitized trust pool every month, regardless of the borrowers’ circumstances. The servicers may be forced into “having to rob Peter to pay Paul”, which means the servicers will borrow from escrow accounts all over their servicing network of mortgages, in the hopes that they’ll be able to repay those escrow accounts back over time. The problem is, when that doesn’t happen (and even at the time funds were borrowed from escrows), there is still a shortage in the escrow accounts that the servicers borrowed from to pay the REMICs their monthly payments to. A prolonged period of these payments (6-9 months; if this crisis were to continue) would put the servicers in jeopardy.
Fast forward to the end of the corona-crisis …
The mortgage loan servicers are out of pocket all of the advance payments they had to pay during the crisis, which means they’re going to be on an all-out campaign to try and recover as much of the shortfalls as possible to reimburse all of the escrows they borrowed from to keep everything looking “current” on the books (this is why servicers get in trouble). This is one of the reasons why Ocwen got into trouble and ended up having to sell $600-million in securities to bolster its “advance” payment funds to investors. That’s like chasing a large, lump-sum credit card payment, making minimum payments every month. The debts just never seem to get paid off. Most borrowers can understand that. Now, factor that into a much larger scale.
By now, you’re beginning to see the “crisis” occurring within the ranks of the mortgage loan servicers. They will be reluctant to do loan mods because that means more perks for the borrowers. Extensions the servicers really aren’t interested in “affording” because they’re already swimming in borrowed time.
Couple that with the borrower’s payment history of already-missed payments BEFORE the crisis was declared and you’ve just dumped gasoline on the already burning flame. My suggestions here, which are simple to ascertain and follow:
- During the crisis, check your land records EVERY WEEK to see whether or not the servicer has “manufactured” any assignments using MERS (Mortgage Electronic Registration Systems, Inc.) as a means to assign, transfer or convey a mortgage loan into a REMIC trust in anticipation of having to do a foreclosure.
- If the assignment was done BEFORE the foreclosure and you’ve already become aware of it, use this opportunity to research your chain of title and see whether or not the information contained within the assignment is false and misrepresentative.
- Look up the state statutes to see what felonies were committed by asserting the false and misrepresentative information into the assignment, which was subsequently recorded into the public record and begin to document all aspects of it (who created the assignment, who executed the assignment, who notarized the assignment, who are the parties named in the assignment, who caused it to be recorded, etc.) for reference.
- DO NOT attempt to contact any of the parties creating the allegedly-bogus assignment. This is like tipping your hand in a high-stakes poker game. I cannot stress that enough (as a consultant to foreclosure cases). Telling the other side of your game plan is going to jeopardize your chances for recovery down the road. What is important is to gather as much information as possible about all of the parties mentioned within the assignment without contacting them directly. (There will be plenty of time for that in court-controlled discovery).
- Obtain a certified copy of your REMIC from the United States Securities and Exchange Commission while the ink is still fresh and you can take advantage of the time lapse created by the corona-crisis which allows you some advantage in preparing a suit for cancelling and expunging the suspect assignment.
For those of you that don’t get the “gist” of attacking documents, I have a kit available (in limited supply) online at CloudedTitles.com/shop … The C&E on Steroids! This will give you a blueprint as to how to successfully challenge the phony documents in the land records. It’s an 8-DVD video set plus a book containing the information you’ll need to arm yourself for the upcoming “fight” I think many of you are going to be involved in.
Why is this important? If you’re facing foreclosure, even before the crisis, this moratorium will give you time to: (a.) think about Plan B; and (b.) act on that plan. Even the 60-day window, which has already started ticking (courtesy of the federal government and extended by various state governments) will give you enough time to get your case files together, analyze them and more forward with retaining counsel (if you haven’t already) to “fight the good fight” because the corona-crisis itself was just not enough … we’ll be seeing another wave of foreclosures when it’s over because when it comes to reimbursement of an already-depleted money supply, the servicers (who are tasked with stealing the home) will stop at nothing to take your home away from you … and sadly, the government won’t be there to bail you out.