Tag Archives: REMIC

October 15, 2022 · 8:35 PM

Nationwide foreclosures are up over pre-pandemic levels

(BREAKING NEWS/OP-ED –) Attom Data (which supplies information to RealtyTrac®) has released a fairly comprehensive report which indicates that foreclosure starts are up 167% from a year ago! What’s worse is that the average time to foreclose nationwide has decreased 4% from a year ago, which can only mean that the banks and their mortgage loan servicers have become more aggressive in their foreclosure processes.

California, Florida, Texas, Illinois and New York led the pack out of 233 metropolitan statistical areas. Markets seeing a lower decline in foreclosure starts were Tulsa, Kansas City, Birmingham, Minneapolis and Cincinnati. In sum total, 92,634 properties had foreclosure filings, whether it be default notices, scheduled auctions or bank repossessions. Lenders repossessed 10,515 properties from American homeowners during the third quarter of 2022. The reason, according to an Attom Data spokesman, was because borrowers were leveraging their equity and selling their homes and downsizing rather than risking an equity loss due to foreclosure.

The report is here:

u.s.-foreclosure-activity-continues-to-increase-quarterly-attomDownload

ANALYSIS: Now, let’s figure out why there is an uptick in foreclosure activity.

The foregoing figures are only for the third quarter of 2022; thus, we have to factor in similar amounts for the first two quarters and the last quarter, which, taking into consideration the average third quarter numbers, the total figure for the year would be somewhere around 370,000 homes this year. If you look at the rates during the 2009-2016 foreclosure crisis, which totaled 10.2-million homes seized, the total foreclosure numbers are coming in at around 4.45-million that can be expected over the next 7 years. That’s nearly 50% of the previous total of homes seized during the first foreclosure crisis. And you can bet that BlackRock, Vanguard and State Street (major institutional investors) will be buying these homes up and converting them into rental properties. How’s that for turning this country into a nation of renters? Clouded titles and all.

What has happened to the U.S. economy since the beginning of the decade?

Up until January of 2021, America had it good. We were energy independent. Gas prices were low. Grocery prices were low because the cost of shipping goods to market was lower. The supply chain was functioning at about 50% due to the pandemic but largely because people were too afraid to go to work because of media fearmongering. They would have rather stayed home and lived off the government dole than go back to work, post-pandemic. So, in short, it would appear the “chickens are coming home to roost” (as it were.

When the pandemic actually hit (March 17, 2020), Americans bought into the government’s crap hook, line and sinker. It became impossible for many to go to work and some were able to make arrangements to work from home. Many lost their jobs out of fear they would catch COVID-19 and die and didn’t bother showing up for work. Foolishly, state governments bought into the lies about mask wearing, social distancing, business closures and finally the jabs (delivered by and through the media, which promoted it as a vaccine, when in fact they weren’t). Over 220-million Americans received at least 2 jabs before many in that population either suffered adverse effects or death. I would anticipate that not only did the hospitals get rich (at $300,000-$600,000 per patient) due to government incentives, but Americans who refused the jab due to government mandates lost their jobs and thus, were unable to pay their mortgages. Despite the moratoriums, those days of grace would soon end and the foreclosure mills were all too happy to jump on the foreclosure bandwagon.

Unfortunately for most Americans, they continue to remain ignorant as to the fact that most of their mortgage loans were securitized. One of my associates has been fighting his foreclosure for over 13+ years and when ordered to pay attorney’s fees to the other side’s lawyers, he wrote a specific payment check to the REMIC (an acronym for Real Estate Mortgage Investment Conduit), which is what accepted all of these securitized loans, allegedly, and also very untimely. Here’s the attorney’s fees check:

Notice anything interesting about how the checks were made out? They have yet to be cashed … because the REMIC is closed and has been since 2007. If this isn’t proof in the pudding, I don’t know what is.

The Court agreed that since the Plaintiff was the REMIC, the check should be made payable to them, for in turn, the REMIC would turn around and pay their customary attorney’s fees for litigation expenses. Unfortunately, one can’t cash a check that has a restrictive endorsement when the payee doesn’t exist.

This is what the bank’s attorneys don’t like … a real smart ass. And I mean he’s smart. He’s done his homework. The attorneys in his case were clearly retained by the mortgage loan servicer, Wells Fargo Bank, N.A., who has no contract with the borrower. You see why they’re frustrated with this case? Wells Fargo isn’t the only mortgage loan servicer committing fraud on the courts, filing on behalf of the closed REMIC either.

I am currently working on a California bankruptcy case which has posited similar research results. In that case, the REMIC trust settled with the investors, which means that no one suffered a financial loss and it’s clear the servicer is trying to steal the house from the bankruptcy court. Bankruptcy judges do not like fraud on the court, especially by officers of the court. The only way that this case has a good outcome is if the owners can defeat the motion to lift stay with enough factual information and witnesses to overcome the other side’s objections. Because I managed to conjure up witnesses (an attorney and a former bank lawyer who handled foreclosures for a major financial institution), things might not go well for the other side’s lawyer.

I still do chain of title assessments and consult trial attorneys on foreclosure matters. The foregoing issues are certainly playing into the statistics seen above. But what’s worse, when these people are being served with notice, rather than fight to stay in their homes until they can come up with a Plan B, they just pack up and move, just like they did during the first foreclosure crisis in 2008. And herein lies the rub.

History does indeed repeat itself. Only this time, homeowners may be getting smarter.

For more information, you can visit the Clouded Titles website.

Please email us through the site if you’d be interested in attending a foreclosure defense workshop later this year.

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August 28, 2022 · 9:49 PM

The Justice System has FAILED us!

(OP-ED)–The opinions expressed herein are that of the author’s only and should not be construed as legal advice.

It is unfortunate that the conservative thought process has to be jarred by liberalism … and just when we were starting to get ahead.

It’s even more unfortunate that the manner in which we conduct ourselves in the legal realm has been totally obliterated by the justice system, made up of elite oligarchs who only look out for their own pensions and care not about the people that can’t afford justice. These judges will listen to the banks before they listen to the people affected by the contract they signed.

My latest machination involves the affidavit that was issued by a “special agent” from the federal whatchamacallits, which was totally redacted by the justice department, which has sought to (indirectly) attack every Christian conservative in the name of liberalism. When one can forum shop for a judge to get a warrant signed … a warrant that would further divide America because of its very nature in attacking a former president who actually did produce positive results, (despite all of the attacks against him during his tenure in office), this justice system has failed us.

The higher elites in power have seen fit to find a Trump-hating judge to do their dirty-work in an attempt to keep Trump from running for office again. If the warrant is proven to be nothing more than hearsay, which I suspect it is, then the judge sitting on the Trump case is no better than the robed types that sit in foreclosure courts across the country, listening to banks’ attorneys, who don’t possess the note, say, “Take it from me, Your Honor, we own the note.” at face value and give the banks whatever they want, when in most cases, the lender (a REMIC trust), no longer even exists.

Foreclosure defense attorneys haven’t helped matters much. Half of them don’t even know how to argue a foreclosure matter or a forcible detainer action, half of them don’t understand that the REMIC’s investors may have been paid in full, which means the servicers are double and triple dipping on homeowners (borrowers) by claiming they represent the REMICs when they know too damned well, the REMICs are closed and were closed one year past their start-up date. These attorneys are also “officers of the court”. They know how to behave when in the “temple”. Singing Judas’s.

The attorneys that do know foreclosure defense are equally flustered because borrowers come to them, stating, “Hey, I’ve got a great case! You should represent me for free!” This kind of entitlement behavior, coupled with that of judges who just want to shove their size 9 (example) shoes up the foreclosure defense attorney’s ass every time he/she comes into court, has caused a number of the good attorneys to either stop doing foreclosure defense or quit practicing law altogether. Many wonder about the other half of the foreclosure defense attorneys and what makes them so special when they play “the delay game”. The judges know it. The attorneys know it. The borrowers don’t get it.

This is false hope. To think these attorneys can’t tell the court that the other side hasn’t proven it has standing to foreclose because the other side hasn’t proven the Plaintiff (and its investors) have been harmed, is beyond belief.

The simple question of … “If the house is sold Your Honor, who gets the proceeds?” goes right by the wayside. Or, in the alternative (as we know by example), you get a smart-ass judge that answers that question for the bank (or the servicer’s attorney), as “Pay me, I’ll figure it out.” This is when you know the court is corrupt because the judge has turned out to be an asshole.

Ever been to a rocket docket? I have. It’s pretty damned scary. Mar-A-Lago raid or no Mar-A-Lago raid, a whole courtroom of homeowners gets cleared out (totally foreclosed on) with maybe 2 cases held over for trial out of all of the 300 cases coming before that court on its weekly docket. The judges have been ordered by their superiors to “clear the docket”, no matter who they shit on. That, does not make them a great judge. In fact, it makes them a shitty judge. When a judge rules against a homeowner based on emotion and hearsay from the lender’s attorney and its fully-trained lying witness, you have bad justice.

This is why this go-round of foreclosures is going to be even tougher of a nut to crack … all because the justice system has been perverted by the entitled elite, the crooked banks whose noses are clear up the judges’ asses and the good ‘ol boy club (the Bar) who threatens attorneys with disbarment for standing up to a judge.

Any judge that will sign an affidavit based on hearsay and then allow the affiant’s name to be redacted from view of those whom he has accused, speaks ill of not only the affiant, but the prosecutor and the judge as well. Mar-A-Lago is only the tip of the iceberg. Trump is not in foreclosure. Trump has not been screwed over by the banks. The raid gave him impetus to run again because nearly 80+ million voters to attempted to return him to office a second time now feel disenfranchised. Judges won’t hear a majority of the fraudulent election claims and that puts the entire system into a quandary.

Here’s a final thought … what would happen if you wrote a check to the REMIC for the full amount you owed and made it a restrictive endorsement only to the REMIC? Chances are, it’d never get cashed because the REMIC no longer exists. A borrower in Florida did just that, twice, and his check (for attorney’s fees), paid to the REMIC itself using a restrictive indorsement, as directed by the court, still hasn’t gotten cashed. Makes you wonder why more folks haven’t used that tactic.

What would the failed justice system do to “fix” that to “out” the very entities that will screw them in the process?

The C & E on Steroids! is a must if you’re NOT in foreclosure YET, but you suspect some shady shit going on in the land records.

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June 23, 2022 · 8:39 AM

Discovery you can’t afford to miss: the SEC!

(OP-ED) — The opinions expressed herein reflect those of the author and should not necessarily be construed as legal advice; however, the material has been vetted by an attorney who loves the thought process behind what is expressed here.

While everyone is getting the “rope-a-dope” from the banks and their mortgage loan servicers, no one’s looking to the enforcement arm of Wall Street … the revolving door into the United States Securities and Exchange Commission (“USSEC”). The author will abbreviate this agency, who is supposed to enforce violations of securities laws; however, seemingly, apparently hasn’t been doing so to the extent that We the People need them to.

The author of this post held off posting this article for the sake of clarification, insomuch that jumping the gun and sending the readers of this post on a wild goose chase for nothing would have been totally discrediting and thus, non-productive. Now that clarification has been achieved, it’s no holds barred.

The author devised a set of discovery, which was then turned into more productive aspects of a means to an end. That discovery revolves around the USSEC, who has the goods you’re looking for if you happen to be facing a REMIC trust, which most of you are since most of your loans were securitized.

This concept and thought process involves a two-pronged attack on the USSEC. Here’s step one:

If you’ll visit sec.gov, you’ll notice the search box in the upper, right-hand corner of the website.

Type in ONLY the REMIC trust’s “Series Number” (for example 2004-NC3, which I will reference in this post as the example). Do NOT type in the entire trust’s name and gobbledygook as you’ll end up with non-descript stuff you can’t use. Once the actual REMIC’s name appears below the search box, make a note of the “CIK” number by whatever means possible because this information will become part of your discovery request.

Rule #1: You cannot serve discovery on a non-party to a lawsuit!

Don’t even try it. You will be wasting your time and money. Instead, the attorney the author spoke with zeroed in on the fact that if you make the USSEC a third-party defendant in your case, the courts will most likely throw them out (dismiss them from your suit) at the first opportunity, much to the objections of the mortgage loan servicer (who’s bring the foreclosure against you trying to reimburse its own coffers), who will then figure out what you’re trying to get at. Thus, the attorney suggests getting a subpoena issued straightaway against the USSEC, asking for certified copies of information directly related to the REMIC trust you’re dealing with. Here’s where the concept attempts to get results:

Submit a complete and true certified copy of the 424(b)(5) Prospectus for 2004-NC3, filed with the USSEC on April 12, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on May 3, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of April 16, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on June 2, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of May 25, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on July 1, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of June 25, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on August 3, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of July 26, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on August 27, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of August 25, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on September 28, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of September 27, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on November 1, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of October 25, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on November 29, 2004, as shown on the Edgar Entity Landing Page with a Reporting Date of November 26, 2004.

Submit a complete and true certified copy of the Form 8-K, also known as Current Report for 2004-NC3, filed with the USSEC on January 3, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of December 27, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of November 26, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of October 25, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of August 25, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of September 27, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of July 26, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of June 25, 2004.

Submit a complete and true certified copy of the Form 8-K/A, also known as Current Report – amendment, and all amendments thereto for 2004-NC3, filed with the USSEC on January 12, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of May 25, 2004.

Submit a complete and true certified copy of the SEC Form 15-15D, known as Suspension of Duty to Report [Section 13 and 15(d)] of 2004-NC3, filed with the USSEC on January 26, 2005.  

Submit a complete and true certified copy of the 10-K, known as Annual Report [Section 13 and 15(d), not S-K Item 405] of 2004-NC3, filed with the USSEC on March 31, 2005, as shown on the Edgar Entity Landing Page with a Reporting Date of March 7, 2005.

EXPLANATION OF WHAT’S BEEN REQUESTED THUS FAR …

From the pull-down menu at sec.gov (when you’ve retrieved the REMIC’s files), print and save the list of all of the documents that have been filed with the USSEC on that particular REMIC. This should not be considered as over broad and burdensome to the USSEC since all of these files are contained within the USSEC’s database. They can easily be retrieved and the fee for sending it all to you is $4.00 in postage.

In this particular example, the pull-down menu, which was printed out in full, contained 19 documents, all of which became part of the request for production under subpoena.

You can either ask for all of these documents (that are contained within the USSEC’s files on the REMIC, which in this case was 19) outside of a lawsuit if you wish to get an advance look-see at everything. That’s an option if you don’t want to subpoena the records from the USSEC. However, there’s more to the story than what we’ve covered so far. This is where the subpoena comes in with the double whammy. A lot depends on the timing of the request and whether you’re attacking the servicer ahead of the foreclosure. You’ll want to depose someone with direct, first-hand knowledge of the REMIC you’re going after.

And here’s step two:

Get the court clerk to issue a subpoena to the USSEC to get them to produce someone with relevant knowledge of the documents that can verify and validate any violations of the governing regulations of the REMIC trust. (Again, this is framed as a suggestion and not given as legal advice!)

Inside of the subpoena, you can demand the USSEC check ALL of its records and produce whatever it has, in certified form, for the following (and this is just a sample):

Submit complete and true certified copies, if any you have in your possession or control, of all notes, memoranda and agreements for any certificateholder settlements known to the USSEC for  2004-NC3. 

Submit complete and true certified copies, if any you have in your possession or control, of all known litigation filed by any certificateholder, known to the USSEC for  2004-NC3. 

Submit complete and true certified copies, if any you have in your possession or control, of all known USSEC-related prosecutorial actions taken against 2004-NC3. 

Submit complete and true certified copies, if any you have in your possession or control, of the mortgage loan documents which name the Plaintiffs as the Borrowers that demonstrated that the trustee of 2004-NC3 received the documents described on Page S-75 of the 2004-NC3’s 424(b)(5) Prospectus according to the stated governing regulations. 

Submit a complete and true certified copy, if any you have in your possession or control, of any document that demonstrates the negotiation or transfer of the Plaintiff’s mortgage loan and all related documents therein, which specifically identify the date these mortgage loan documents, including all assignments of mortgage (or deed of trust) thereto, that were documented as part of the transfer from the Depositor to the REMIC trust by the trust’s Cut-Off Date.

You’ll want to review all of the trust’s “FILED” documents first, because the Amendments inside of those REMICs may reveal changes in the number of certificate holders receiving the 8-K’s and 10-K’s and may further reveal the actual “condition” of the REMIC before and after it closed. You’ll need this information for the next step.

Rule #2: You cannot depose a non-party to the suit without relevant cause!

This is a great way to get the mortgage loan servicer’s attention because if the REMIC trust settled out with all of the certificate holders, then the mortgage loan servicer, the real party bringing the foreclosure, has no standing because it can’t prove concrete injury-in-fact required under Spokeo v. Robins. Thus, it has no standing to pursue a foreclosure. And it’s going to fight you tooth and nail to keep its position in the suit because it wants to steal your property.

Don’t expect the mortgage loan servicer and its attorneys to sit idly by while you depose someone with knowledge of the particular REMIC trust. They’ll have their attorneys in the deposition, so you’ll have to craft your questions in such a way so as to expose the bad behavior on the part of the servicer’s employees when it comes to having the USSEC deponent examine the recorded assignment(s), specifically for:

  1. Who prepared the assignment? (Was it the law firm or the servicer’s employees?)
  2. Who executed the assignment? (Was it someone who wasn’t really who they said they were?)
  3. When was the assignment executed? (Well after the Cut-Off Date of the REMIC trust?)
  4. When was the assignment recorded? (Well after the Closing Date of the REMIC trust?)
  5. What do the governing regulations for this particular REMIC state about Assignment of the Mortgage Loans? (Is it obvious to the USSEC deponent that the regulations were violated?)
  6. Has the USSEC ever been notified by anyone to investigate this particular REMIC trust?
  7. Does the USSEC have any records of whether or not a credit default swap counterparty paid the certificate holders in full?
  8. Does the USSEC have any records of whether or not any default insurance policies paid the certificate holders in full?
  9. Does the USSEC have any records of whether or not there were any settlements wherein the certificate holders were paid in full or in part; thus settling any future payments due to them?
  10. Has the USSEC ever investigated this REMIC for any securities violations or irregularities?

In other words (and this is just a smattering of all of the questions to be asked of your USSEC deponent) … you’re trying to get the USSEC deponent’s attention to the fact that he/she can testify as to the fact that none of the governing regulations for the REMIC were complied with and that under New York Trust Law, they are void. Any question relevant to violations of the REMIC’s governing regulations would require a statement from the USSEC deponent that could be inferred to be a conclusion of law and the other side will object, but the comment will still go on the record, where the judge can see it.

This is a direct way to get someone in authority to see the assignments as fraudulent and to initiate a potential investigation, both civil and criminal, which may force the mortgage loan servicer to back off rather than run the risk of an exposed criminal prosecution.

You want the judge to see the REMIC for what it is and what the servicer is actually trying to do. Because most judges think they’re pensions are tied to these REMICs, to discover that the REMIC has been closed and the certificate holders paid would mean that the servicer (who has no contract with you) can triple-dip by stealing your home and that the judge doesn’t have to worry about his pension is going to be affected by making the proper ruling and kicking the mortgage loan servicer out of court.

If the investors (certificate holders) settled the case with the REMIC and accepted payment in full, how then can they come into court and claim they were financially harmed? They can’t … that’s the point. They’d have to prove they were damaged and if they got an insurance settlement and were paid in full, they weren’t damaged; thus, the mortgage loan servicer would be potentially committing fraud on the court to attempt to introduce evidence to the contrary.

Remember, in order to issue a subpoena, you have to file suit. You can use the SEC’s own forms to request all of the documents contained in the REMIC’s file for the shipping fee and they will send them certified (outside of the litigation); however, that takes time and doing it outside of litigation means the court has no control over the outcome of the request for anything from the USSEC. The fees for deposing a single party or entity these days is $3,000 – $5,000 depending on where the deposition takes place. However, if you’re trying to protect a million dollar property, no stone should be left unturned.

Again, this isn’t legal advice. It’s just plain common sense.

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April 22, 2022 · 10:16 PM

So you think you’re in default, eh?

(Op-Ed) — The author of this post is a paralegal that serves as a title consultant to trial attorneys in foreclosure matters and thus, this article is not intended to render legal advice, nor to be construed as such. It is intended for educational purposes only and is not guaranteed to produce any given legal outcome.

The author of this post will try to keep things simple without passing judgment.

There is no doubt here that we are collectively living in troubled times. The rash of foreclosures continues now that the eviction moratoriums have been lifted for the most part. Those who did not undertake a loan modification or request a forbearance (that was actually granted) are probably feeling the sting of communication by the mortgage loan servicers in their mailing out of late notices on unpaid and delinquent mortgage loans.

According to the terms of the mortgage or deed of trust (depending on which “state” you’re in), there is a specific section on Default. Understand that it’s the mortgage loan servicer’s obligation to collect the mortgage loan debt and route payments to the “lender”, no matter WHO that lender might be.

The problem with defaults, loan modifications and the like is that so many of the loans out there today are securitized through the MERS® System. Since the MERS® System was taken over by the same company that owns the New York Stock Exchange, the information coming out of this entity is scarce to non-existent.

Generally, if you miss a payment, the servicer is going to notify you by certified mail. You may have to sign for the letter. The biggest mistake that homeowners make is ignoring these letters, when in fact, this could be the very start of a long, drawn-out process where you can obtain a lot of useful and vital information that your attorney could use in a foreclosure defense posture, without having to pay gobs in legal fees.

What is a QWR?

That process is called a Qualified Written Request (QWR) under RESPA (the Real Estate Settlement Procedures Act) § 6. You can easily research this section of the law and discover that RESPA allows you to send a QWR to the servicer’s bona fide QWR address and ask the servicer to send you specific information, which is discussed below.

The author is going to include a sample QWR from the National Consumer Law Center; however, it comes with a caveat. If you want to delay the foreclosure while gathering evidence, it is suggested by many attorneys that you only request two or three documents at a time and just keep the requests coming. As soon as you get the set of documents you asked for, have another letter drafted, ready to go with another 3 to 4 document requests under the same set of statutes. This prolongs the servicer taking any action against you, while you set out to discover (rather than go through objectionable discovery in court against the servicer who’s trying to steal your home) all of the documents necessary to build a sustainable case.

qwr-sampleDownload

Several homeowners this author has talked to have utilized QWR’s to stop foreclosures. It was only when their attorneys told them it wasn’t doing any good to continue sending them … and the homeowners quit sending QWRs … that all of a sudden, the servicers foreclosed on them.

Why send a QWR?

Sending the servicer (at their official QWR address, not their main address) a QWR is a great way to get information from the lender’s mortgage loan servicer. Nine times out of ten, it’s the mortgage loan servicer that retains the law firm to foreclose and it’s the mortgage loan servicer whose employees falsify the assignments they use to create standing to steal your home.

Secondly, when asking intially, the following documents are key to asking for follow-up questions:

  1. An unredacted copy of the mortgage or deed of trust
  2. A copy of the note, showing all indorsements and allonges proving custody of the note
  3. A copy of the complete pay history of the loan, including escrows

Do NOT ask for the original note because it’s highly likely the servicer doesn’t have it. If your loan was securitized, it’s also highly likely, given what Judge Jennifer Bailey in Florida was told by the Florida Mortgage Bankers Association (in 2009), that your note was shredded after it was uploaded into the MERS® System.

exhibit-23_comments-of-the-florida-bankers-association-highlightedDownload

For those of you doubting Thomases out there, read page 4 of the foregoing letter to the judge … understand that the word “eliminated” is just what it is. The banks got rid of the original loan paperwork because they converted the note into a security. They converted a debt instrument into an equity instrument, which makes no sense at all. The foregoing letter was included as an exhibit in the Osceola County Forensic Examination conducted by the author and his team and attorney Allen D. West, Esq., released to the Clerk of the Circuit Court of Osceola County, Florida on December 30, 2014. Since then, subsequent Clerks have kept the examination report on the county’s website.

This is why asking to see the original note is ludicrous because it doesn’t exist in its purest form.

This is why you want to identify WHO the players are in your chain of title and compare what you get from the mortgage loan servicer’s collateral file with all of the other evidence you are able to obtain from a QWR versus the actual discovery within an expensive lawsuit (right out of the gate).

Day 91

Don’t be fooled by mortgage loan servicers whose employees ask you to be 90 days late on your mortgage loan before they’ll grant you a loan modification. On Day 91, the mortgage loan servicer and the trustee will file for insurance claims on the REMIC and get paid in full for the missing mortgage loan payments not made by the borrowers. If the investors in the REMIC are made whole with a payout by the insurance carriers, then who’s in default? The REMIC has no standing to pursue a foreclosure!

Once you’ve been able to ascertain the “players” in the sandbox, it will make things a lot simpler to identify the culprits and pursue some serious litigation against them.

Listen to Dave Krieger on The Power Hour, 11 a.m. – 1 p.m., Monday – Friday (Central Time) and don’t forget to watch his speech, streaming live on The Power Hour (thepowerhour.com) on Saturday, May 14, 2022, live from Clay Clark’s Reawaken America Tour at the Carolina Opry in Myrtle Beach, South Carolina at 11:15 a.m. Eastern Time.

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August 23, 2021 · 6:56 AM

ADVANCES, explained

(OP-ED) — The author of this post is a consultant and paralegal to attorneys practicing in foreclosure defense matters and their related fields and thus, the information offered in this post should be considered research for educational purposes only and not the rendering of legal advice.

“My people are destroyed for lack of knowledge.” (Biblical quote in part)

Most homeowners that retain counsel to look into matters involving foreclosure only scrape the tip of the iceberg when it comes to dealing with REMIC trusts. A REMIC (Real Estate Mortgage Investment Conduit) is a common law trust set up by a hedge fund that is primarily funded by “certificate holders”. The “certificate holders” are investors or investment groups that buy securities from the hedge fund. The securities are created from lists of mortgage loans, all pooled together in a package, that are sold to investors, who receive shares (certificates) which represent their stake in the matter. The amount of “shares” given to the certificate holders depends on the amount of funding they’ve contributed to the REMIC trust and to which tranche they purchased certificates in (some tranches are riskier than others, by design). It’s much like getting stock certificates when you buy stock in a company on Wall Street, especially when it comes to the risk of loss.

Each REMIC trust has a Master Servicer by design. REMIC trusts can also incorporate mortgage loan servicers and sub-servicers if it so deems, for the purposes of collecting the monthly mortgage payments from borrowers.

Each REMIC trust has a Cut-Off Date, where all paperwork that is represented as “filed” with the United States Securities and Exchange Commission via the Trustee of the Trust, has to be forwarded to the Trustee prior to the closing of the Trust.

Each REMIC trust has a Closing Date, in which the documents have all been tendered to the Trustee of the Trust. The Trustee then issues the certificates to the certificate holders, who then receive principal and interest payments from the servicer every month. The IRS refers to the Closing Date as the “Start-Up Date” of the trust, when the trust officially is closed for business and exists according to law for one (1) year.

Each REMIC trust has a Distribution Date … and this is important … because whether or not the borrower makes a payment or not … the servicer is required to advance proceeds from the sums collected from all of the borrowers, to the certificate holders in the form of principal and interest payments. The Distribution Date is generally somewhere between the 20th and 25th of every month, according to the majority of REMIC trust filings this author has reviewed.

The Certificate Holders are buying securities, which are batches of securitized loans that have all been pooled together into a CDO (Collateralized Debt Obligation).

Each REMIC has an ADVANCES section, which explains in detail how the mortgage loan servicers pay the certificate holders on the Distribution Date, whether the Borrowers make their mortgage payments or not.

When the Borrowers go to their respective “corresponding lenders” (part of the table-funding process), that lender checked to see whether the Borrowers’ credit scores were worthy of their best, low-interest loans. If the borrower’s credit scores were “shitty”, they generally ended up in subprime loan pools, which the government now frowns on lender’s from making. These were the riskiest loans made, thus, more attractive to investors because of the high-interest returns they would get on their certificates (from playing in the secondary markets).

Fast Forward to the Foreclosure Process

Now that it’s been simply explained how the system came into play, one must also understand that the servicers continue to collect for the certificate holders once the trusts have hit their one-year mark and expire. When the borrowers have begun to make payments on their mortgage loans, they are told to make at least 3 payments. Why?

Because it takes at least 3 payments to get the entire securities package set into motion. But wait! The Closing Date stated that (in the Pooling and Servicing Agreement for each REMIC trust) that all paperwork had to be “in” to the Trustee by that time, as the Trustee was issuing certificates to the certificate holders! The idea of being able to pay for at least 3 months was designed to send a false representation to investors that the loans were “good”, when the originators knew the “sewer would back up” at a point in time in the future.

The lenders also know that because of most of the predatory loans they issued, they knew already that the default rate was going to be higher because these loans weren’t really “qualified” loans under the law. The loan originators went to various insurance companies and purchased default insurance to guarantee that if the borrower defaulted, the certificate holders would be paid the value of their shares via the default insurance payment.

If a foreclosure indeed occurred … and knowing that the default insurance (and other means of reimbursement vehicles were initiated, such as credit default swaps, PMI, LPMI, MIP, title insurance, etc.) would pay out after Day 91 of the Borrowers’ default on their loans … the certificate holders were paid, assumedly by the servicer, right?

How then, did the certificate holders (for which the trustee represents to the court or in the notices of default at the time of the foreclosure) suffer financial harm? How did they suffer an actual injury-in-fact if they were being paid by the mortgage loan servicers every month?

When a borrower files suit against the servicer and the REMIC trust, they completely miss the boat on Injury-in-fact (see the article on Lessons Learned from Spokeo on this blog site) issues. By that time, a plethora of questionable documents have been recorded in the land records in the county where the subject property is located. These documents, suspiciously referred to as Assignment of Mortgage or Assignment of Deed of Trust, were more than likely generated by the mortgage loan servicers themselves or through third-party document mills, as a means of “batting clean-up” in the land records. These assignments all attempt to link the chain of title to the current alleged lien holder, albeit, questionably.

Who is the damaged party here?

Various attorneys that this author has consulted have all maintained that 99.9% of the foreclosures involving REMIC trusts are illegal. In California, notices are given to prospective bidders that they are only bidding on the lien and not the property itself. After the foreclosure occurs, the Trustee or the law firm allegedly representing it, issue a Trustee’s Deed Upon Sale. The problem here is … the Trustee is deeding the land over to the new buyer, who, if they would have read the damned sale notice, were only buying the lien and not the property itself! Judges gloss over all this because they don’t give a shit about the borrower. Judges can’t even be bothered to apply the law as it’s written, which is why America has appellate courts. The problem is, most borrowers can’t afford to even litigate the foreclosure let alone the appellate phase of the matter. The judges know this, which is why they don’t give a shit how they rule. Seldom do you ever find an honest judge that actually reads, understands the facts at hand and rules accordingly. The honest judges even have a hard time sifting through the facts if the borrower’s attorney doesn’t understand who he’s litigating against and why.

If the borrower’s attorney were to simply ask the court: “Your Honor, if my client’s house is sold on the courthouse steps today, who gets the money?”, the judge would then inquire of the foreclosing lender’s attorney WHO is being represented here. The Plaintiff’s attorney will always acknowledge that he represents the Plaintiff, when the Plaintiff’s attorney knows damned well he’s being paid by the mortgage loan servicer, who is coming to court under stealth, in the name of the lender (REMIC trust) to steal the house to reimburse itself for the payments.

When the Borrower’s attorney goes to court, the attorney and his client are faced with the submission of a payment history from the servicer showing the borrower’s history of mortgage loan payments and when they stopped making them. The Plaintiff bank then asserts that since that date, the certificate holders haven’t received payments, which is false. The servicer has been paying them all along and the servicer, the real party behind the foreclosure action, has failed to tender the payment history, post-borrower-payments made. The servicer should be required to disclose ALL payments made to the certificate holders of the REMIC trust, because the Trustee is claiming that the payments the borrower was making were the only payments made to the certificate holders, which is also false.

The servicer is the real party in interest here … and they’re in court trying to recover all of their payments … and then some. When they sell the home, they are going to recoup tens of thousands of dollars, in addition to the booty collected through the default insurance and all of the other payoff methods. In fact, mortgage loan servicing is big business and it’s a dirty one too. Not one mortgage loan servicer that has been “taken to task” to the fullest extent of the law (in court) has come away with clean hands; that is, if the attorneys who are litigating for the borrowers actually know what they’re doing.

The borrower does not have a contract with the mortgage loan servicer!

If this is the case, then what is the servicer doing in court, claiming to represent a closed REMIC trust, after the trust and the servicer have been paid multiple times over by all of the claimed default mechanisms?

This is where it’s estimated that a $500,000 mortgage loan nets the securitized trust $7,000,000 dollars. You read that right! Given all of the payouts the servicer got after Day 91, the certificate holders were all made whole. How then were the certificate holders damaged? They have no standing to come into court. They got away with the foreclosure because of borrower ignorance.

When the first run of foreclosures occurred in 2009-2014, 97.5% of the borrowers served with notices packed up their belongings and ran. Two (2%) percent of them attempted to deal with the mess in court themselves and got their asses handed to them. The other point 5 percent (0.5%) retained attorneys or were successful pro se because they bothered to do their research … but sadly, because of the way the system is “rigged” in favor of the banks, the banks’ servicers have loads of money to spend (and they will spend it) to legally outmaneuver the borrower, making it virtually impossible to win their case. It is estimated that 1 out of 100 foreclosures heard by the courts will actually go anywhere, especially to appeal. Those are very bad odds, especially to those who lack the knowledge necessary to make the banks prove the default and the actual harm occurred.

One Footnote: The Credit Risk Manager

As a footnote to this research, one should also understand that some of these REMICs have what is known as a Credit Risk Manager. These are third-party firms that are fee retained (for a small percentage of the collected funds of all payments submitted to the REMIC, generally 0.0135% per annum of the Scheduled Principal Balance of each Mortgage Loan) to monitor the activities of the mortgage loan servicers collecting for the REMICs. Had the borrower’s attorney known this entity existed, it would have been so easy to depose them and all their records, to see just who was paying whom and when. But again, no one is paying attention.

Here’s an example of one SEC filing from a 424(b)(5) Prospectus:

Taken from Page S-69 from a 424(b)(5) Prospectus issued on behalf of First Franklin Mortgage Loan Trust 2006-FF15

This is one of many “hired guns” that are put in place to monitor the activities of the mortgage loan servicers and master servicers. Can you imagine the shit show if you discovered that these people were being paid to monitor specific payments on your mortgage loan and the advice they gave the servicers was non-existent? That could constitute a breach of their contract! And that’s just one issue you might discover if you can get this entity into a deposition!

Read the foregoing paragraphs carefully! Notice where it says the Credit Risk Manager will provide a “loan-level loss and mitigation analysis and a prepayment premium analysis” to the REMIC’s Master Servicer and Servicer? This basically describes how the party making the payments to the Certificate Holders (who are allegedly in court claiming they were harmed) different analyses of ways to “make them whole” (mitigate their losses), meaning the Master Servicer and the Servicer, who have to pay principal and interest on the Distribution Date, every month, whether the Borrower pays their mortgage payment or not!

THE LAST STRAW

In the Osceola County Forensic Examination, the author of this post, who prepared the report, included as EXHIBIT 29 the following letter that you should read if you want to understand HOW the servicer is allowed to reimburse itself for ADVANCES paid out. For all intents and purposes, it’s an admission by the now-defunct Ocwen Loan Servicing LLC as to HOW it does its business:

exhibit-29Download

If you want some real “background” on how the servicing game is played, you should download this PDF Exhibit 29 and read it thoroughly and research its contents BEFORE engaging the servicer or BEFORE you start drafting pleadings. The party you are going after in court is NOT the REMIC trust! This document should make things plain and simple for you regarding the explanation of how the servicer treats ADVANCES.

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