Servicer Advances: More Smoke and Mirrors

Several people are issuing statements about servicer advances, now that they are known. They fall into the category of payments made to the creditor-investors, which means that the creditor on the original loan, or its successor is getting paid regardless of whether the borrower has paid or not. The Steinberger decision in Arizona and other decisions around the country clearly state that if the creditor has been paid, the amount of the payment must be deducted from the amount allegedly owed by the “borrower” (even if the the borrower doesn’t know the identity of the creditor).

The significance of servicer advances has not escaped Judges and lawyers. If the payment has been made and continues to be made, how can anyone declare a default on the part of the creditor? They can’t. And if the payment has been made, then the notice of default, the end of month statements, the notice of acceleration and the amount demanded in foreclosure are all wrong by definition. The tricky part is that the banks are once again lying to everyone about this.

One writer opined either innocently or at the behest of the banks that the servicers were incentivized to modify the loans to get out of the requirement of making servicer advances. He ignores the fact that the provision in the pooling and servicing agreement is voluntary. And he ignores the fact that even if there is a claim for having made the payment instead of the borrower, it is the servicer’s claim not the lender’s claim. That means the servicer must bring a claim for contribution or unjust enrichment or some other legal theory in its own name. But they can’t because they didn’t really advance the money. Anyone who has experience with modification knows that the servicers make it very difficult even to apply for a modification.

Once again the propaganda is presumed to be true. What the author is missing is that there is no incentive for the Servicer to agree to make the payments in the first place. And they don’t. You can call them Servicer advances but that does not mean the money came from the Servicer. The prospectus clearly states that a reserve pool will be established. Usually they ignore the existence of the REMIC trust on this provision like they do with everything else. The broker dealer (investment banker) is always the one party who directly or indirectly is in complete control over the funds of investors.
Like the loan closing the source of funds is concealed. The Servicer issues a distribution report with disclaimers as to authenticity, accuracy etc. That report gets to the investor probably through an investment bank. The actual payment of money comes from the reserve pool made out of investor’s funds. The prospectus says that the investor can be paid out of his own funds. And that is exactly what they do. If the Servicer was actually taking its own money to make payments under the category of Servicer advances, the author would be correct.
The Servicer is incentivized by two factors — its allegiance to the broker dealer and the receipt of fees. They get paid for everything they do, including their role of deception as to Servicer advances.
When you are dealing with smoke and mirrors, look away from the mirror and walk through the smoke. There, in all its glory, is the truth. The only reason Servicer advances are phrased as voluntary is because the broker dealer wants to make the payments every month in order to convince the fund manager that they should buy more mortgage bonds. They want to be able to stop when the house of cards falls down.

86 Responses

  1. You need to be a part of a contest for one of the best sites on the net.
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  2. Good info. Lucky me I discovered your website by chance (stumbleupon).
    I have book marked it for later!

  3. All, I need some assistance and advice. We received a Notice of Foreclosure a few months back. I have still been corresponding with Wells Fargo telling them they have no standing. After several QWR’s and letters to OCC and CFPB, WF responded with more documents than they did in the past. This time they included 2 Allonge Notes which I had never seen before. Keep in mind that they did not respond with the documents even to OCC and CFPB. Then it clicked I went on to the Baltimore More Public Records and there it is a Deed of Trust had been posted there on the 11th of this month. I have not been able to view it yet, but I can imagine what it is. I need some help on which way I should go with this. I need to know what I need to do in order to prove that the documents are Fraudulent. I am sure they are. Any assistance would be greatly appreciated. James 443-677-2799, Thanks

  4. Johngault- didn’t see your response from 4/9 til just now. Will look onto charge off versus write off. Thanks

  5. Ian, I just learned that as far as accounting (and write-offs), there’s a distinction between a “charge-off” and a “write-off”. Way I got it – and note to self, take more notes – a charged off debt is still alive, but a
    written-off one isn’t. Creditors move accts first to charge off status. Seems to me this is the point at which or up to they have something to
    sell. I think – caveat – once it’s written-off, they don’t.
    Also, some rule, 26 US Code 1.1091, – I think- has been mentioned here (tax stuff), but I couldn’t see the application to these securities.
    It’s about whether stock / security investors (in general) may take a loss or not on trades when they repurchase ‘like’ stock / securities within so many days. There was some ref to exchange, but how that’s in play, got me (x maybe exchanged instead of sold), but even then, how’s that in play here? It’s just a tax consequence.

  6. KC not let Buttwipes dump costs on Retirees/Taxpayers … NO!
    KC dropped it back on the lap of the Buttwipe who Snookered KC!

  7. We are still with BOA because we have a Claim for damages and we didn’t modify. So we haven’t been kicked down the road.

    Those who modified and defaulted again …. WeLLLLLLLLLLLL…

    Those Buttwipes are trying to collect Twice on Taxpayer Ins loans!!

    You can try … but the Shadowcat lurks in the Dark with Bright Eyes and Night Vision………..

    When Hell Freezes Over!!!!!

  8. Ian, have you ever seen an allonge from the broker/dealer purporting to transfer to both CW HSB and CW HL Servicing? 80/20

    both stamps .. but only Servicers says .. Pay to the order of ….

    Makes you think … HHHHMMMM?

    Scooby Dooo and Scrappy Tooo!!

  9. John Gault- if you peruse the news headlines in the mortgage servicers’ trade magazines, or on the servicers news blogs, you will see them boasting that they have “invested” (purchased) say 1.6 billion in debt for 32 million dollars, paying the average 2% for what. They are paying so little precisely because of what you allege, that the bank/nonbank/whomever has written off all or most of the debt. When a bank/nonbank/whomever writes off debt, they receive 100 cents on the dollar as a credit against earnings, at which time the debt/mortgage is no longer secured debt, it is unenforceable. In numerous settlements the judge/trustee has stated that the mortgages in the trust, sold to the investors, are “defective, and therefore une forceable”. But it is difficult to ascertain which mortgages are defective and unenforceable. It may be your mortgage or mine, but hard to find. You can’t collect on the same debt twice, or 5 times, but that is what they are doing. When the debt or mortgage is charged to zero on the balance sheet it is no longer an asset or a liability. Accounting 101 under GAAP and FASB. And there you are.

  10. But, there can’t be any salvageable value as a receivable in states whose law mandates security first (if the contract itself doesn’t). An action on a receivable isn’t one against the security (even if a claimant pretends otherwise).

  11. On april 5th, I asked:
    Is there a reclassification of a note written off like I described such that it’s (the note) no longer marketable?

    Holy moly. Call me slow, but maybe that’s it. I hear people talking about the mere collection of receivables and haven’t really gotten that. IF a lender takes a write-off of X amt of a loan (but not all of it, mol for its salvage value as a receivable), maybe there is a reclassification and the note is no longer a note. If a lender wrote off 200k of a 500k note obligation, is the 300k now classified as a receivable (not a claim under the note) and that’s what being sold? If so, isn’t it an unsecured debt, with zero relationship to the former note and dot? Anyone know any answer here? Left field? Then I’d appreciate knowing why people call these “receivables” in lieu of enforceable, collateralized mtg loans. But for all I know, a write off of a collateralized debt obligation, or at any rate on home loans, isn’t even available until after the loss is realized by sale of the collateral…..? I mention election of remedies; I just don’t actually know if writing off some or part of these deals without regard to the collateral is available (i.e., can only take write-off after prescribed remedy – f/c-) as a first remedy – or any remedy ever, unless the lender is precluded as a matter of a particular state’s law from getting a deficiency judgment. I still say if a lender opted for the time and ease of non-j foreclosure, it isn’t entitled to a write-off after f/c because that lender abandoned a deficiency j by its non-j f/c election.

  12. Small claims for Federal violations? What….

  13. Sept 2013 … Going Strong

    And Another One Bites the Dust.

    KC… Baited for the Kill! Injuries only make the animal more aggressive.

  14. Christine,
    Counter claim for Abandonment seeking injunction to prevent me from redeeming permanently.

    Redeem What? The fraud FPI? Because why?

    You didn’t get it ?… I say Boy.. OH BOY….. YES YOU DID!!!

    Got Proof and a Gift Card for Lubricators ….

  15. Tammy,

    “I am now taking them to small claims court over several respa and Tila violations so we will see how that turns out.”

    Wrong jurisdiction.

    Contact Richard A. Roman – 505 E Rio Grande Ave, El Paso, TX 79902 – (915) 351-2679

    He’s been helping many homeowners. If he can’t help you, ask him for a referral. Just don’t do it alone. Not if your mod forces you into some kind of a balloon.

  16. So I got a modification “FINALLY’ after two years of absolute hell.
    Basically a restructure of my loan ( starting over after loosing all equity) and at the end of my 30 years, I will owe another 30 thousand to someone who advanced the money to ” my servicer” not the actual lender. I called and questioned this 27 thousand and of course my servicer could not really give me a straight answer on how this amount came about ( I wanted a breakdown) I sent a QWR asking for the information but no answer as of yet. I am now taking them to small claims court over several respa and Tila violations so we will see how that turns out. I was a little confused over it all because the first modification contract said I would owe 36 thousand after 30 years and after I started asking questions they changed the amount to 27 thousand owing after 30 years…but MY mortgage service bank could not tell me why the amounts had changed. I am almost scared to sign the modification because TEXAS laws are so different when it comes to homestead and such…but I have done my homework and like I said this has been going on for 2 years. I feel like I have been drug through a ditch that never ends….sending paper work, re sending paper work and on and on and on. Basically what I am saying is I think I have some sort of advancement that I am not sure about ! I am not done with all this because like I said…this has been a road from hell.

  17. In the Present Time .. My husband is stage 4 of a terminal illness, and he has never missed a day in over 30yrs as of the present. He has wonderful salaried benefits in that after tax paycheck each month……
    Including Long Term Private Disability Ins.. He is Stubborn!!!
    And Proud!! He will let no Man use him, and force him into BK to cover their Fraud!

    Timing is Everything!

  18. Yes. MERS is Legal and Yes … MERS can transfer the MNISC provided the request is made by the RPII and put into a contract.

    Just Sayin …

  19. They say .. If you cant beat them join them … I said NEVER!

    I was Wrong …
    Because in the Present, the BEST way to BEAT them is to join them.

    If that makes be Bad ….
    I ask you … Do you have a Better Solution?

  20. The name game continues with hubby ..

    Man with the same first and last name (but different mi an no JR) lives three hours north of us ………. Retired UW

    He calls my husband the week after closing.. the conversation went like this ..

    Hey Little Brother (half)
    I went down to the hall today to check the board after many people congratulated me on the new house, they were surprised I was moving down south. I just wanted to call and Thank You for the House!

    I have the original unsigned app from closing (oops)
    any how … its says my hubby first middle last jr and his SS#.

    Guess who the aka is?
    (My hubby NEVER signed without MI JR)


  21. If there is no beneficiary named … its a FREE FOR ALL to claim.
    Unclaimed assets escheat to the State.
    What if you didn’t know you were a Bene?

    Like Master Servicer said … They are Begging You to Claim It!
    Embrace MERS in the Mirror.

    P.S. Likewise I an Very Pleased to See MS on Christine’s
    …… Reference List .

    He really is a Nice Fella, he was just Hard on the Outside like Christine is.
    I am pleased to see him showing his soft side .. per say.

  22. You cant make yourself beneficiary of your own Irrevocable Trust.

    I hear its the law to prevent Criminals from using the Trust to protect their assets from their creditors.

  23. Correction…

    KC as Owner but not recorded in record …..

  24. KC asked to identify herself in standing as ….

    As KC?
    As KC current spouse of debtor?
    As aka KC?
    As Jane Doe?
    As Civil Union Partner?
    As Hubby aka Hubby without JR? …. Huh?

    KC answer … KC as Owner, of non butttt .. working on ), and as KC without any other AKAs and as Spouse with Joint T.I.E. and right of survivorship. KC as the Intendended Beneficiary as an understanding amoungst the parties of the ppm agreement.

  25. The Newest Nubbie Attorney for DC … I suspect he was shaving costs by not checking the COURT RECORDS …

    2008 CW FSB
    Mortgage is filed with the errors stricken, and initialed by KC.

    Dum Da Dum Dum Dum

    The Newest Nubbie Attorney for DC … I suspect he was shaving costs by not checking the Origional Closing File …

    Dum Da Dum Dum Dum

    Loookie Like Names for Them and Us ….

  26. The Newest Nubbie Attorney for DC … I suspect he was shaving costs by not checking the records at the recorders office …
    the ISC Mortgage is filed with the errors stricken, and initialed by KC.

    Dum Da Dum Dum Dum

  27. Christine doesn’t “hate” anything or anyone. She’s got better things to do than waste her life and energy “hating”.

    She simply thinks that only a barely-human sub-species having lost all survival instinct would voluntarily keep on paying the wages of those willing to annihilate it.

    Common sense. The one thing this country is desperately lacking… Then again, collective suicide doesn’t prove smarts, on the contrary.

  28. In the Holden case they have two different versions of the Note..
    I have three different versions ( one allonge assigning to two parites at one time, newest).

    The newest (3rd) version of the mortgage ,,, is presented with the Notary Acknowledgement from the Warranty Deed.

    How do I know ? Because it was the ONLY doc at closing that had my name spelled correctly (didn’t need striken and initialed).

    “Its some Deep Stuff”

  29. Remarkable how many of those extremely successful, American-born with a brain are finally spelling it out as it really has been since the beginning, still currently is and might even survive for a few short months but… is definitely on its way out!

    Sunday, April 6, 2014
    Pigs with Lipstick and other Psychoses

    An Inquiry into Free Trade

    “Free trade isn’t. The term affords social and political cover for manipulative protectionism in which one or more trading entities concede domestic priorities for the promise of some advantage on other fronts. It is a way, for example, to impose patent rights on biological matter in direct contravention to the will of the citizens who live in the “trading partner” country. It’s not democratic. It’s not transparent. And it’s not “Free”. These agreements, far from creating stability in the global economy and promoting lasting peace, actually enrich political patrons in the short term and fuel inequality-based conflict and uprisings in the medium and long term. The U.S. wants all TPP nations to open up their markets to tariff-free imports of U.S. agriculture products – most recently and most prone to contention at the moment: pork – but, in the same breath, wants to eliminate the prospect of generic medicine in protectionist favor to U.S. drug producers. In other words, the U.S. wants restrictions where they aid its interests and the elimination of the same when they harm economic inequality. Free? Fair? Transparent? Democratic? Not a prayer!

    Like the sociopathic behaviors that make their way into the annals of DSM-III lectures, trade negotiations which insist on palatable terminology to mask offensive market manipulation need to be scrutinized in public and held to account. They harm short term economic growth and destroy integrity and accountability for future interactions. We can’t afford “free” anymore.”

    – See more at:

    What India, Brazil, China, Russia, Indonesia, Turkey… in brief, BRIICS, VISTA and MINT countries have discovered and are fighting against. Fascinating to observe the demise of an entire system based on inequality, looting, injustice and wars. Even more fascinating to observe the utter lack of interest and responsibility displayed by the people most likely to pay for it all in a short future.

  30. Two confirmed faxes and a ph call .. but … you know, they didn’t ..get it

    Any how .. F.P.I. …

    Desperado Desperado Desperado Green with Greed …

  31. IRS lien (recorded or Not) are due upon Sale of the property.
    Oh Yes they Are! As are RE tax liens(recorded or not).
    But the State can Not …………………………………..!!!!!
    Holy Cow! E. I.E.I.O.
    Dag Gone It!

    Happy Trails
    She got the Gold Mine and He got the Shaft!

    Many Blessings to All!

  32. Debt charged off / debt forgiveness = Income
    Income = Income Taxes
    Income tax forgiveness?
    Amount of Income tax owed on debt forgiveness?
    IRS unrecorded lien = amount owed plus RE tax, Ins and fees.

    That’s the way I like it .. Uhh Huhh.. … That’s the way it goes, and Christine hates taxes. Oh yes she does …. I payed scrap price as surety and warrantor. Uh Huhhh…. Yes I did. NO LIENS!

    The Shadowcat has been on the Prowl for Years, …
    She filed a lawsuit …
    They responded to the court last Thursday …….
    We have to respond it Kind .. “The Golden Rule”
    We need to put that poor broker/dealer aka Lawyer/Debt collector
    aka Buttwipe in Orange and assign him a MERS PR #.

    I would tell you about the production …. but I want my day in Court!
    Everybody is going to Court!
    Lawyer Up and Lets Get this Pony Show on the Move!

    … Not covered… after the fact AG Settlements.

    Cough .. Cough
    ~~Ut Oh~~

  33. “In two decisions, the Republican Supreme Court has made it legal for corporations to purchase the government”.

    It’s been pretty expensive for all of us…..loss of liberty, freedom, privacy, own property, no taxation WITH representation, no access to the courts, executive powers used for all things Obama, laws for the little people as Leona Hemsley used to say, etc….the list goes on and on and we are sleeping, dreaming, it cannot happen to me, just “those” people. Wake up folks, this is a nightmare, coming to your town house soon!

  34. Even PCR advocates taking to the streets. The situation must be much direr than people want to believe… but they mindlessly keep on posting the same empty whining over and over and over. That ought to fix things in a jiffy!

    Government doesn’t give a hoot about blogs like LL. In fact, TPTB wants much more of them all over the internet. Keeps people busy, out of the way and completely useless. And it helps monitoring them.
    And in the end, they’ll croak just the same. It’s a lot less messy that way too.

    “As I write I cannot think of one thing in the entire areas of foreign and domestic policy that the US government has told the truth about in the 21st century. Just as Saddam Hussein had no weapons of mass destruction, Iran has no nukes, Assad did not use chemical weapons, and Putin did not invade and annex Crimea, the jobs numbers are fraudulent, the unemployment rate is deceptive, the inflation measures are understated, and the GDP growth rate is overstated. Americans live in a matrix of total lies.

    What can Americans do? Elections are pointless. Presidents, Senators, and US Representatives represent the interest groups that provide their campaign funds, not the voters. In two decisions, the Republican Supreme Court has made it legal for corporations to purchase the government. Those who own the government will decide what it does, not those who vote.

    All Americans can do is to accept the serfdom imposed on them or take to the streets and stay in the streets despite being clubbed, tasered, arrested, and shot by the police, who protect the power structure, not the public.

    In America, nothing is done for the public. But everything is done to the public.”

  35. Coming from Rhode Island this is no surprise….corrupted to the core! 120 Million of taxpayers’ money (Federal highway money) to build a mall no one wanted, domestic violence charges that disappeared, the Mayor, a convicted Felon…on and on. MERS ruling is no surprise.

  36. usedkarguy, huh? cases? Must be oldies, started eons ago?

  37. Here’s a real PSA for anyone interested:

  38. MERS wins in Alaska and Rhode Island.

  39. yesterday at 11:48, I linked the 2011 Horace v la Salle et al case. I’m pursuing the pleadings, but so far, in the linked order, I noticed the judge said that Horace was an intended third party ben of the PSA. No, it’s not precedent, but it, along with the sales campaign of MERS and proponents of sec’n, should be ‘persuasive’.

  40. Horace v. LaSalle, Nick Wooten, great pleading on NY trust law.

  41. As I recall, there is a presumption one is not a hidc when a note has been bought at a steep discount. Whether or not that applies to these notes depends on whether or not article III applies in the first place. I have no doubt that the (attempted) assignment of the note and dot in the “MERS” assignment is pursuant to an article 9 (def not article III)
    purchase and sale agreement. And I still maintain fwiw that an assgt requires acceptance and there’s no evidence of any, despite the fact that servicer’s are bringing the action in the name of a trust.

  42. Poppy – I tried to describe one scenario where a claimant is trying to cover its debt collector status by hiding behind FDCPA’s non-application to loan servicers. But, if a party buys a note as I described, maybe he isn’t just a debt collector. He actually bought the note (what was left of it.) I don’t know that someone may write-off part of a note and sell the rest, but I sure believe someone may not sell a note totally written off. They don’t get unlimited remedies – they get one (and a write-off is an election of remedies). Is there a reclassification of a note written off like I described such that it’s no longer marketable? I doubt it but don’t know. What I mean is did their election to write off the 200k change something? That’s an accounting / tax question, I think.
    I had a case a few years ago about forum / jurisdiction shopping mol and I considered it a granddaddy because of the lengthy discussion and its consideration of many cases. It’s one of three I’d sure like to locate. Party A was a foreign corp (china or like that). It had a contract with B corp, which was a U.S. corp. ‘A’ pretended to sell its interest in the contract to C, also in the states. C brought the action here against B. The value of what was owed was say 50k. The purpose of this sham sale was to give C jurisdiction (without it, the case would have to be brought in China and A wanted the judgment HERE). As it turned out, C had either paid nothing or 10.00 (I forget) and had an agreement to pay ‘A’ the amt of the judgment when collected. The court determined that C had no standing and couldn’t invoke the juris of the court. It suffered no injury by B’s default. Now, that was a contract and not a note. But, if a debt collector has made a similar arrangement with a note owner – “I get 10% and I’ll give you the balance”, it may also be falsely invoking jurisdiction.
    In another case from a few years ago, the claimant’s attorney told the
    court “that’s what you see when you have f/c. They want the note endorsed in blank”. Well, of course they do. That has enabled a lot of them to stand on poss of a bearer note and alleged right to enforce under Article III. But, because the claimant has suffered no injury by
    the non-payment, imo it’s still jurisdiction-shopping mol and the mere poss doesn’t make the claimant the rpii required by rule 17. imo.They’re using bearer status to invoke jurisdiction. The only way I know of to shut this down is to undermine article III’s application to these notes and or note that there is no allegation of the borrower’s breach of a contract between the claimant and the borrower and or
    to allege the claimant (or defendant if so postured in the case) has suffered no jurisdiction-invoking injury, and that can probably be outed by a demand for a more definitive stmt re: holder v hidc. “I can’t formulate my defenses without this info”. (btw and fwiw, depending on strategy, some courts which have addressed the matter have ruled that the borrower, even though postured as the plaintiff, is really the defendant to a non-judicial foreclosure attempt).
    strictly lay opinions

  43. I just thought of something else. If a trust may owe an obligation, isn’t it possible the trust is not bk remote?

  44. neidermeyer, you said:
    “What I’m most curious about is all this talk I see where the servicer “sold the loan” , I never see it written as “the servicer sold the servicing rights”
    That reminds me of one of the big whoppers told by that gang from the get-go. They said the changes in servicing rights were recorded and their m.o. precluded the need to do this. NOT. Not ever have svcg rights been recorded.
    Maybe the servicer did sell the loan. Did the servicer buy the loan? What would that entail – that’s the problem. No chain. FNMA has to buy the loan to end its guarantee payments. Maybe fnma then sold the loan to the servicer. (Or maybe fnma sold its right to repurchase at a discount to the servicer, while still keeping the investors whole) They could, I think. But where’s the record? For that matter, where’s the record when fnma re-purchases to end its guarantee?
    On fha and va loans, the deal is the issuer has to repurchase to see the ben of the ins/guar. Otherwise, no one gets that benefit. (don’t know how they think that’s cool. The borrower is told the lender benefits and the borrower pays for it, just like the borrower pays for fnma’s guarantee (by the “g fee” built into his rate), only they (fha/va v fnma) operate entirely differently*. Has the issuer repurchased and then sold to the servicer? where’s the record? Nah. Looks like what’s going on is they’re all skipping those repurchase agreements and just f/c’ing in the trusts’ names. But, as to fha and va, they have to be foregoing the fha and va benefits because they will only pay the issuer. Surely that requires some evidence the issuer did in fact repurchase, so that one’s a mystery.
    *fnma guarantees payments and repurchase to end guarantee
    fha and va cover bottom line losses after foreclosure

    Gene says some PSA’s say (and I believe he read this), and I took it, right or wrong, to be involving non-gse loans, that servicer advances are loans. FHA and VA don’t get involved in servicer advances to my knowledge. They just cover those bottom-line losses and they do so after repurchase by the Issuer and the dust settles on the loss. (like I said, got me how they can mandate that and not cover the trust IF it’s the lender, but it may preclude fha and va from getting into pi$$ing matches about whom to pay or to diminish the risk of paying the wrong party). FNMA’s guarantee made by fnma-reimbursed advances made by servicers aren’t loans to the trusts. They’re payments on the loans – a big difference. The only repayment expected is from fnma to the servicer for its advances and to my knowledge, all the servicer has to do is turn in an invoice.

    At any rate, the servicer could have purchased the loan to sell to another, but there’s no record. More likely it’s a written off loan and the servicer is a debt collector hiding behind FDCPA not applying to loan servicers,which is a fraud then imo (because they’ve gone from being a true servicer to being a junk debt buyer / a debt collector.* FNMA will not guarantee a modified loan nor is it eligible for purchase by fnma; As I recall, the servicer, per fnma contractually – NOT the psa, must repurchase to modify.
    Fwiw, I still don’t understand how written-off debt may also be sold. Maybe the write-off is a percentage, like they write off some and sell what’s left, what they didn’t write off, at a discount tied to the value of
    the collateral. Like this: loan is 500k balance. Property value is determined to be 300k. Write off 200k and sell note for 250 to debt collector. Debt collector is not a holder in due course if for no other reason than note taken in default. I made this up, of course, but maybe that’s how it goes if it’s legally proper AND the debt collector, I think,
    only has an interest in 300k, not 500k, because the diff was written off by the note seller. I’d be interested in your take on this.
    Why would someone do this? Well, hell, why not if it’s free money or for any number of reasons.

  45. neidermeyer – I take it that in the old days, they could do an “X”, like an advance as a loan. Sure, why not? But, regardless of what a PSA says, I don’t believe these trusts may get involved in loans. It’s doing business for one. Secondly, a loan is not the receipt of income, let alone pass-thru income. Thirdly, I don’t believe a trust may become obligated for anything whatsoever. The FNMA guarantee is different because it is NOT a loan. It’s what it says – a guarantee to make good when the borrower doesn’t. (I still have some questions, though, since the guarantee is apparently made on the certs, but paid to / thru the trust). So strongly do I believe trusts may not get involved with loans, any agreement to do so may itself vitiate the trust’s tax status. Or maybe it would just be when they do. I’d like to be able to prove it, of course, but that takes some work: may a trust do business? may it take on obligations such as loans? Obviously, I think both answers are ‘no’. As to the true sale aspect, as applicable, if the trust has to pay back the monies advanced, then it has, I guess, assumed all risk. But I don’t think that’s the bar. The only real advantage I can see to investors if they have to pay back a loan, anyway, is that IF they’re made aware of many “loans”, they can get out before the loss is realized.

  46. sorry, neidermeyer…

  47. “discarded to a junk debt buyer to foreclose upon”

    From what I am seeing these days, you may be spot on, john
    That’s an entirely different cat and remedy.

  48. @Johngault ,

    And since, acc to the PSA, the advances are only loans (to the trust?), could you please tell us who is the lender of those loans? Is it the servicer?

    This is a leftover from before securitization when the banks had portfolio loans and smaller back office operations.. the servicers do indeed make the advances , they are the lender to the trust , you can see it in their annual reports to stockholders if they are public … in the old days their security on the loan was the fact that the bank had clear title and could foreclose quickly ,,, the servicer could be assured that they would be repaid. Of course now that contract with the trust/bank is far more dangerous as the ownership is in doubt and in many places homes are still far underwater compared to 2006/7 .. in my area it is still 40-50%. I have been seeing assetts in the related “NIM” trusts liquidated to make up shortfalls in the related trusts sold to investors, it’s all in the trustees reports to the investors.

    What I’m most curious about is all this talk I see where the servicer “sold the loan” ,, I never see it written as “the servicer sold the servicing rights” ,, It’s almost like they’re acknowledging that the loans no longer exist and the rights are a “hot potato” to be milked and discarded to a junk debt buyer to foreclose upon.

  49. I don’t know about the rest of you, but I never thought in those terms per se, that the cert holders had security interests in the loans or that those security interests needed to be perfected.

  50. PS – even if I can’t this second connect the dots, this is part and parcel of AIG waiving subrogation:

    “The trustee also must confirm that the trust has received clear title to the assets, free of any claims or charges, actual or implied.”
    If AIG had rights of subrogation, it may be that the loans would be subject to its claims. I’d like to see ANYwhere some support for a secn trustee confirming the trust has received ANYthing, esp since imo the MERS assgt of the note and dot is prima facie evidence it didn’t.

  51. So way I get it, unless the cert holders security interests in the assets of the trust have been perfected, they (sec interests) don’t exist and the asset of a trust could be if not would be subject to the claim of others. Course, before that, for the assets of a trust to be the assets of a trust required (true) sales, including assignments, delivery, and so on.

  52. Apparently, the security interests of the investors, the cert holders, must be perfected:

    “Ensuring title and perfection of security interests

    The trustee will see to establishing the trust that will serve as the SPE for the asset securitization. The trustee also must confirm that the trust has received clear title to the assets, free of any claims or charges, actual or implied. When assets are transferred to the SPE at closing, these assets are pledged to the holders of securities issued by the SPE. Since the assets will serve as collateral for the repayment of the securities, the trustee must also confirm that security interests in the assets are perfected in order that the assets will not be vulnerable to the claims of other creditors of the company”

  53. The guy has been right quite a few times thus far. And he is right again in many respects today. Last I checked, the Petrobuck had lost 43% of its power worldwide (it was 23% 6 months ago. Boy are things moving fast!)

    Nah… The house is not your problem. The future of this country is. Then again, it already was 3 years ago (are you there, Iwantmynpv?), 2 years ago, last year, six months ago. It isn’t getting any better… And the people are so oblivious to the demise of their country!

    Jim Willie: Gold Standard Will Return- It is Coming. It Will Shake the World

    April 4, 2014

    An important backlash is coming to the perverse USFed monetary policy. An urgent call for global action has been seen in the G-20 and BRICS nations.

    The Iran sanction workarounds are to serve as the prototype for gold trade settlement.

    Shanghai will set the oil price in Yuan terms. China will insist on making oil payments in their own Yuan currency.

    Russia will service the oil demands to Europe and Asia

    The Saudis will comply with Yuan payments and any other major currency in payment. [Didn’t they just sign something amongst themselves? Oh darn!]

    OPEC will fade while the NatGasCoop will rise under Gazprom leadership

    Europe is caught in the middle, but will eventually turn to Yuan and Ruble payments for oil shipments. [Already started with the brand new agreements signed between France and China and between Germany and Russia…]

    The death of the Petro-Dollar is in progress. Shock waves will force a new Split Scheiss Dollar. The birth of the Eurasian Trade Zone is nigh.
    The Gold Standard will return, not in bank transfer platforms or currency trading platforms, but in peer-to-peer transactions made in settlement. The world demands a new payment system, an alternative to the deeply flawed USD-centric current system. Even effective viable barter systems are to emerge. It is coming. It will shake the world.

  54. Hmmm. Maybe Glaski wasn’t first at all (from 2011):

    “But wait, argued the bank, it doesn’t matter if if the trust owns the loan — it just has to be a “holder” under the Alabama version of the UCC (Uniform Commercial Code), and the trust is a holder. The problem with that argument is securitization trusts aren’t allowed to simply take property willy-nilly. In fact, to preserve their special tax status, they are forbidden from taking property after their cut-off dates, which in this case was February 28, 2006. As a result, if the trust doesn’t own the loan according to the PSA it can’t receive the proceeds of the foreclosure or the title to the home, even if it’s allowed to foreclose as a holder. ”

    (I don’t recall us ‘covering’ this case.) I haven’t read them yet if so, but there may be links to the pleadings in the article.
    Next move: loan was transferred, just no public record made. Imo, that’s the next train to get ahead of. We’ll have phony (unrecorded) assgts to go with the phony endorsements, robo-signed and or by any one of MERS’ 20,000+ straw officers.

  55. NG – you’ve called this a ponzi scheme. Did the banksters sell forward and (but) book the expected profit at the time of the agreement rather than when the profit was actually made / received? Would a forward fall into the category of an executory contract – mol – such that the profit shouldn’t be booked until realized?

  56. Property taxes who is paying them trespass asks,
    Perhaps the entity fronting for ???? Who ever it says on the record just like our hmm land records right ??

  57. @Venu

    Poppy, on April 4, 2014 at 8:39 pm said:

    “I’d be very curious how much BOA sold SLS the note for? And are they servicing or debt collecting?”

    Answer that at your own peril. The question comes from someone who blew it big time and can’t really help you.

    Here are the solid people you can go to, if you find them here:
    1) Tnharry, even if you don’t like everything he tells you.
    2) Bob G. and
    3) Gene, likewise
    4) Jan Van Eck
    5) Tom Cox

    Too much BS from too many losers on this site. I can help to the extent that I had SLS for a short while and they folded on a simple QWR.

  58. I’d be very curious how much BOA sold SLS the note for? And are they servicing or debt collecting?

  59. I’d check where Keshe Foundation is giving its technology, if I were…

    Never mind. Waste of time. Still, passports are such a great thing to have.

  60. Timing is so much everything…! Nothing happens in a vacuum. Ever.

    Oh, and for those MSM brainwashed who now listen to “fringe” without sorting out any better the information, the word out is that “Russia doesn’t manufacture anything. Therefore Russia knows it can’t do anything, it’s economy is shaky and it will be crushed by China.”

    Huh? Russia has gas, oil, the biggest concentration of diamonds earth has ever seen, gold Congo would kill for and much, much more. And Russia (raw-material ultra, ultra rich) has partnered with China and India (manpower ultra, ultra rich).

    Kerry threatens, backs off, threatens, backs off. Pitiful, pathetic, laughable.

    You pay his salary to do nothing to clean house either. All he does is make it more difficult for you to travel abroad.

    Taxes anyone? Have a good gesture. Just for the banks…

    Nomi Prins | The Real Vice-President of the United States Is Wall Street
    Thursday, 03 April 2014 09:56
    By Nomi Prins, Nation Books

    In “All the Presidents’ Bankers: The Hidden Alliances That Drive American Power,” Wall Street journalist (and former Goldman Sachs executive) Nomi Prins writes a painstakingly researched history of the financial industry’s collusion with the White House to create a self-serving United States financial policy.

  61. If you look at when the trusts began keeping track, and accounting to investors…..many times it is up to two years since the opening of the trust. Were the payments made by all “loans” up to the time of first reporting the ” reserves”you are referring to?

  62. As President Teddy Roosevelt (American born…) once commented, “When a government becomes treasonable against the people, then it becomes treasonable of the people to continue supporting the government!”

    April 15 is coming up.

    Are the 9.2 million self-employed and 38 million retired American people going to file or rebel?

    Are employed people, whose taxes are deducted automatically under the threat of losing their lousy job, going to take a leap of faith and tell their employer to go piss up a rope, thereby paralyzing the entire country for a few days?

    Might not happen this year again. We’re headed that way anyway sooner or later. Just a question of time…Unless, of course, Monsanto, TV and medicine finish their lobotomizing job.

    Oh well! There are still 7 billion people worldwide more than willing to fight and die for what’s right. Hell, they do it every day and they have no idea why!!! There is an incentive there to come out of that slump. Are they ever going to seize it!

  63. Venu,

    I had SLS for a (little) while. MERS member, debt collectors who usually get involved with a 2nd rather than a 1st. If you have them on your first, time to QWR the hell out of them.

    Contact me at with any question.

  64. So I posted Hilmon where MERS swore the notes aren’t regulated by article III. Big whoop, you say – that was one case in MN. Well….most of us by now are familiar with the doctrine of stare decisis, which mol says if a court rules one way one day, it must rule that way another day. These are common claims imo, meaning the basis for the claim is common to the claims made by MERS and the banksters. They are brought on a common basis – here alleged poss of a bearer note and article III of the UCC and its alleged granting of a right to enforce (without regard, of course, to any other dispositive rule or law).It’s now ‘universal’ to all claims made against homeowners to support the claims being made. Just as there’s the doctrine of stare decisis for courts, my money’s on there’s one like it for claimants when the
    claim is common, universal, or some other word.

  65. NG – please save some of us a ton of work and link or post the provisions of a PSA to which you’re referring.

  66. Also, gene, since I think you’re referring to non-gse loans, like sub-prime stinkeroos, what is the point of the payment guarantee if the investor is ultimately going to eat any loss? Is it just a loan til it appears no one may recover the advances because the property is determined underwater, and then is the servicer advance(s) a priority claim on any recovery by sale?

  67. Gene – very interesting analysis of the advance payments in the PSA. Would you say the PSA is the only document relevant to advances or guarantees? And since, acc to the PSA, the advances are only loans (to the trust?), could you please tell us who is the lender of those loans? Is it the servicer? Save me a lot of searching. thanks

  68. Yesterday, I cited chapter and verse where MERS swears these notes are not reg’d by article III (“holder” not applicable). Here’s the pleading:

    I’m going to see exactly what the court ruled. Looks like it was Judge
    Patrick J. Duggan. I’m also going to see, fwiw, how many times that court has subsequently ruled in favor of note “holders” at the behest of MERS et al.

  69. We got a letter from “Specialized Loan Servicing LLC” (SLS) that they are the new servicer. They mentioned in a letter that Bank of America sold the mortgage loan to them. Anyone heard of this company? Is this a legitimate company? Why did B of A sold the mortgage to them?

  70. Spot on Gene!!

  71. Neil, are you saying that the Investors (like a hubby&me cookie jar) are making deposits into the pool, and the servicer is using our pooled funds to pay the debtors (hubbys) payment?

    Because if you are .. that tells me the right party is getting paid.


  72. It’s not nonsense, Gene. Please link us to a PSA that says what you’re saying. Maybe calling them “servicer” advances is not entirely precise. Fannie Mae, I know for sure, states that they will pay investors whether the “borrower” makes payments or not. Now, Fannie is all things to all people–“investor,” master servicer, trustee, etc.

    So if Fannie makes payments to the investors, that’s what Neil is talking about. Does Fannie actually make the payments it says it makes? Maybe, maybe not. I’d come down on the side of “yes”–that’s what the bailout was about. If Fannie actually does make the advances it promises to make, do I owe Fannie? I’d argue I don’t, because I don’t have a contract with Fannie that states I approve of them making payments on my behalf and that if they do, I then owe them. Never signed such a document. No one did.

  73. “inalienable rights”: … they have stripped you of your money and property, if you want to get it back, you have to sue.

  74. (Certain inailenable right’s cannot be surrendered, i.e. bill of rights) … Bars Repeat Lawsuits- You can only sue once on the same claim.

  75. You can not bring suit based on inalienability.

  76. Using the Statute of Limitations

    If the creditor has waited too long to sue you, you must raise this as a defense in the papers you file in response to the lawsuit. If you can prove that the debt is older than the statute of limitations, then you will not have to pay it. If the creditor or debt collector knows that the statute of limitations has expired on the debt and still sues you, it may have violated the federal Fair Debt Collection Practices Act (FDCPA).

    However, a statute of limitations does not eliminate the debt — it merely limits the judicial remedies available to the creditor or collection agency after a certain period of time. A debt collector may still seek voluntary payment of an old debt even though the law cannot force you to pay it.

    Some Debt Collectors Try to Enforce Time-Barred Debts

    In recent years, aggressive debt collectors have begun trying to enforce debts that are barred by the statute of limitations. They buy these debts from original creditors for pennies on the dollar, so they make a tidy profit when they collect anything.

    Some of these debt buyers use aggressive tactics when they try to collect on time-barred debts. According to media reports, they abuse and harass debtors and try to trick debtors into reaffirming debts so that the statute of limitations begins anew.

    Determine when the debt was due. This is when the statute of limitations starts ticking. For open-end accounts, the statute of limitations starts to run when the first payment was due.

    Find the applicable statute of limitations. Statutes of limitations are set by state law. They usually range from about three to ten years and depend on the type of debt. To find out the statute of limitations for debts in your state, you can:
    •Check out Nolo’s 50-state chart: Statute of Limitations in All 50 States.
    •Consult a lawyer.
    •Check out your state laws, either by going to a local law library, contacting your state consumer protection agency (see Nolo’s article State Consumer Protection Offices to find your local consumer protection agency), or doing some research on the Internet. To find your state’s laws and get information about legal research, see Nolo’s Legal Research area.

  77. Paul Craig Roberts, American-born, with credentials few on this site can ever pretend to and a solid grasp on today’s financial, economic and international situation, recently wrote:

    “Is America really a nation of utter fools? …The government does not need evidence when it can rely on the gullibility of the American people.”

    He must not be writing for NG’s readers, whose ranks have consistently been dwindling for years.

  78. Another question might be: what documents are generated either digitally or on paper as to the advances? Are there accounting records of the advances? We know they are cooking the books, but exactly how are they cooking the books?

  79. Java,

    It’s a case by case situation. In many cases where taxes and insurance were escrowed and the homeowner defaulted, Corelogic has been paying. You can find out with your tax assessor’s office who has been sending those payments.

  80. Still waiting for concrete examples illustrating what NG advances. With all the cases he (through his team of lawyers) consistently alleges to have studied and defended in court, there ought to be a couple of them in which the mechanics of his theories have been duly proven with adequate supporting documents. That’s how courts work.

    Apparently, that’s not how NG works. So, where are the wins and where are the pleadings? Unless under gag orders, everything in a case except settlement provisions is public record. Care to share a few cases with us?

    Until then, the above is nothing more than sensational and empty editorializing. 7 years into it and people are still asking from him for the same elementary information. And in the meantime, those who’ve thus far followed NG’s lead keep falling like dead flies…

    Does intellectual honesty mean anything?

  81. Who is paying the property taxes ?????

  82. NG is all screwed up again. Advances are nothing more than “loans” required through the PSA and Servicing Agreement. It does not make the payment for the borrower at all. It only ensures an income stream.

    Also, as soon as the advances are deemed uncollectable, the requirement for advances ends. Essentially, if the loan is underwater, then advances do not occur. In fact, the non bank servicers go to every extreme to avoid making the advances because it is a cash drain for them.

    Also, any time he cites a case, it is not on point and is easily refuted by showing the differences

    I don’t know why NG continues with this nonsense, unless it is to simply sell more of his “reports”. He does no good with this garbage theory………..and only serves to mislead.

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