Investigator Bill Paatalo: Nationstar Conducts “Bulk Note Sales” Without The “Notes?”

In 2013, investors in six “RALI Series” Trusts filed a complaint in New York against their Master Servicer (Nationstar Mortgage, LLC) for conducting “Bulk Note Sales” of non-performing loans owned by the trusts for its own benefit; specifically to recoup upwards of a billion-dollars worth of servicing advance receivables. The Plaintiff / Investors accused Nationstar of conducting these “Bulk Note Sales” without having any ownership or requisite authority to do so. (See: KIRP LLC V Nationstar Mortgage LLC).

Per the complaint:

1. KIRP is a significant investor in certificates issued by six residential mortgage backed security trusts sponsored by Residential Accredit Loans, Inc. (the “RALI Trusts”).  KIRP brings this action against Nationstar, the Master Servicer for the RALI Trusts, for its liquidating loans owned by the trusts through on-line auctions at fire sale prices without authorization and in  blatant abdication of its servicing duties under the governing contracts.
2. As the Master Servicer, the RALI Trusts pay Nationstar to “service” the mortgage loans owned by the trusts in the best interests of the trusts and their certificateholders.  This includes working to maximize the recoveries on each of the mortgage loans through enumerated actions detailed in Pooling and Servicing Agreements (the “Servicing Agreements”), which set forth the Master Servicer’s duties.  However, rather than fulfilling its responsibilities to maximize recoveries, Nationstar has recently embarked on a campaign to benefit its own interests at the expense of the RALI Trusts and their certificateholders, through auctioning off the trusts’ mortgage loans in bulk (“Bulk Note Sales”) for amounts that are a fraction of the loans’ unpaid balances or the value of the properties securing the loans.  While these Bulk Note Sales injure KIRP and the RALI Trusts’ other certificateholders by dissipating the assets of the RALI Trusts, they provide multiple benefits to Nationstar, including through allowing them to more quickly recoup certain advances they made on the mortgage loans as part of their servicing duties.  KIRP seeks to enjoin Nationstar from engaging in any further Bulk Note Sales in breach of its duties and to recover damages for the Bulk Note Sales that have already occurred.”
      When I read this complaint, a couple questions immediately jumped out at me regarding the so-called “notes” being auctioned off by a party that doesn’t own said notes. What did Nationstar disclose to the “purchasers” at auction as to their rights to sell the notes? And, were the “original notes” actually delivered to the bulk-sale purchasers by Nationstar as a non-owner of the notes?
 I went to the SEC and located the 424(B)(5) Prospectus filing for one of the named trusts in the lawsuit (RALI 2006-QO1). (See:
Here’s what the Trust disclosed as to the custody of the loan files on P.S-108:

Custodial Arrangements                                                          

      The trustee will appoint Wells Fargo Bank,  N.A., to 
serve as custodian of the mortgage  loans.  The  custodian is 
not an affiliate of the  depositor,  the master servicer or the 
sponsor. No servicer will have custodial  responsibility for 
the mortgage loans.  The custodian  will maintain mortgage 
loan files that contain  originals of the notes,  mortgages,  
assignments and allonges in vaults located at the sponsor's 
premises in Minnesota. Only the custodian has access to these 
vaults. A shelving and filing system segregates the files 
relating to the mortgage loans from other assets serviced 
by the master servicer.



      If Nationstar had no authority per the trust instruments to sell, liquidate, and convert the notes for its own personal gain, it’s hard to believe that Wells Fargo would release the “original” notes in bulk to Nationstar for these purposes. The likely scenario is that the bulk purchasers were delivered copies of the notes from Nationstar’s servicing system that were pawned off as “originals.”
     This goes to the heart of what I have suspected for years now in regards to these “bulk non-performing loan purchases” by debt buyers. The “Sellers” often have no rights to sell these loans, and the “Buyers” are purchasing bogus collateral files with no “original notes” and no verifiable chains of title.
 Judge Mosman Quote - Re-Default and Authentic Note
Contact Investigator Bill Paatalo at
Private Investigator
BP Investigative Agency, LLC

11 Responses

  1. We lost our home through illegal non-judicial foreclosure with a defective assignment of mortgage. Neither the bank nor the servicer produced a true certified copy of the wet ink signed Note that we signed with the original lender. The house is put on sale on the market after the foreclosure. What could we do?

  2. You know whats bad when i look on and it says bank took ownership of this home for one dollar.Whats really bad is to think what that family went through that lived in that house the fake sevicer held that familes heads underwater for years and nobody helped them,no lawyer,no judge, no government.Just get out but please give us a mod please,no just get out on the street,get out.We the fake servicer are going to take your home we have no rights to you home just get out now,but our credit is destroyed,because the fake servicer destroyed it, we dont care says the court just get out but please help us NO.So bad its like a form of ethnic cleansing.I know because my fake bank servicer did it to my family. We all worried for years it was so bad,until i found this lawyer that was able to get me a fake mod.So bad whats going on in this great honest country.These fraudsters get to get rich from all the hell that they are putting these families through.Just sick .

  3. Tara-I’m in RMAC 2016 CTT. Rushmore is the servicer for Roosevelt Management Company. They’re using copies of blank endorsed Notes to foreclose on thousands of houses. I’m going to the DOJ & CFPB & FBI. I’ve got proof they’re placing FALSE evidence into court records. They’re in bed with each other because the owners of Roosevelt also own Rushmore.

    Rushmore CEO-Tom Walsh
    Roosevelt CEO-Terry Smith.

    Google Rushmore, Veronica Hosking, NY

    Good read.

  4. i just lost my home on 9/21/17 to an ILLEGAL FORECLOSURE in Los Angeles , Ca. Nationstar was involved . My 2005 Countrywide Home Loan was “RE-Securitized” in 2016 under the RMAC TRUST, SERIES 2016-CTT. Our loan was sold via Freddie Mac “Non-Performing ” loan pools sales in June of 2016 (4 pools of non performing loans were sold off- ours to Rushmore Loan Management Services LLC.). NATIONSTAR MORTGAGE filed as “OWNER” OF MY NOTE in US Bank’s filings as CREDITOR in my Chapter 13 Bankruptcy case in May 2017. I have COMPLETE FRAUD on my loan documents from Countrywide in 2005 to Present Day. US Bank, and Nationstar NEVER OWNED my loan LEGALLY.



    I cannot find anything on them………..


    Tara Medrano

  5. wow – the PTB may have killed V.P. Biden’s son for screwing with the banks too…

    as we know V.P. Biden while in the Senate (D-Delaware) pushed through congress a multitude of statutes benefiting the big banks… like Bobby Kennedy, his son Beau apparently chose the rule of law over the rule of dynastic family empires to which his father subscribed…
    reminds me of the attack on the younger Kennedy’s after their dad made so may deals with “the devil”…
    further reminds me of Scalia’s untimely demise…

    read here…

    from the blog….

    Delaware Attorney General Beau Biden brought it out in his case Delaware v. MERS, lenders generally failed to follow the PSA and properly assign the mortgage loans to the Trusts. In the transcripts that AG Biden cited from In re Kemp, 440 B.R. 624, 626 (Bankr. D.N.J. 2010) (No. 08-18700) (Aug. 11, 2009), an employee for Bank of America responsible for servicing the securitized Countrywide mortgage loans testified under oath that Countrywide did not have a practice of delivering original documents such as the note to the Trust and was not in the habit of endorsing notes at the bottom, but favored allonges that they made as they went along. She further testified that allonges are typically prepared in anticipation of foreclosure litigation, rather than at the time the mortgage loans are purportedly securitized. Both of these facts are contrary to the requirements of the PSA that the note be endorsed in blank and delivered to the trustee at the time of securitization. Thanks to foreclosure defense attorney, Bruce H. Levitt, of South Orange, NJ – Bankruptcy Chief Judge JUDITH H. WIZMUR totally got it! See her Opinion here.

  6. Beautiful!!! It was in 2013 that Nationstar filed an assignment as owner of my alleged note from mlmi trust series 2006 ar1

    Sent from Yahoo Mail for iPhone

  7. and here is another robo-signer website

  8. This blog contains a list of robo-signing suspects that this examiner has encountered in actual securitization audits and chain of title examinations. The suspects listed herein have in various ways been linked to robo-signing. This blog also includes a Robo-Signing Sample Report and articles containing the opinions of the examiner based on his findings and comments from actual examinations.

  9. This IS NOT BS. I’ve seen it 1st hand. HUD auctioned off over 100,000 Notes. The Limited Power of Attorneys executed by HUD are VERY specific.The Notes are to be endorsed to HUD on the date the FHA claim is paid. I’ve looked at 100’s of court dockets & not ONE Note that they’re passing off as an original bears the proper endorsement. They’re using COPIES of blank endorsed Notes because none of the Notes were properly endorsed & ALL the Power of Attorneys are expired. Mine expired in 2015. Guess what?

  10. This post is B.S. a due diligence compoany analyzes these notes for the buyers

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