Livinglies's Weblog

Transforming Foreclosure Profit into Secured Debt

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

The simple answer is that it is possible to change loan numbers and the change could be related to combining data between two entities where the loan papers or servicing rights are supposedly being transferred. If Company A for example uses a 10 digit format for loan numbers and then “transfers” the loan to company B which uses 11 digit format for loan numbers, the loan number would need to be changed.

That said, it is often indicative of multiple transfers off record — i.e., where undisclosed third parties had possession, rights or even ownership of the loan documents. One of those parties might have more rights to enforce than the foreclosing party in your present case.

DISCOVERY:

Identify all loan numbers, including MIN, and any index used in alleged aggregation of loans that have ever been associated with the subject loan.

Describe the factual circumstances in which each loan number was used.

Produce all documents as defined herein that relate to ownership of  the subject debt.

Produce all documents as defined herein relating to transfer of any written instrument relating to the subject debt.

GET A CONSULT

FREE RESEARCH: Go to our home page and enter subject in search bar.

GO TO LENDINGLIES to order forms and services. Our forensic report is called “TERA“— “Title and Encumbrance Report and Analysis.” I personally review each of them for edits and comments before they are released.

Let us help you plan and draft your answers, affirmative defenses, discovery requests and defense narrative:

954-451-1230 or 202-838-6345. Ask for a Consult.

REGISTRATION FORM: You will make things a lot easier on us and yourself if you fill out the registration form. It’s free without any obligation. No advertisements, no restrictions. The consult is important to determine how we may be of assistance in the drafting and filing of documents in court or complaints directed to law enforcement.

Purchase audio seminar now — Neil Garfield’s Mastering Discovery and Evidence in Foreclosure Defense including 3.5 hours of lecture, questions and answers, plus course materials that include PowerPoint Presentations.

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

=====================

Where it appears that more than one loan number has been used to identify the subject loan, there is more discovery and more investigation to do.

This can occur as the result of many possible events. Some of them are benign.

Mr. Garfield often states that when more than one loan number is observed or revealed, further investigation and discovery should follow that path. He says that multiple loan numbers can be clues or evidence of the assertion that there have been more players in the chain of title than has been disclosed.

Most importantly, one of those undisclosed third party players could still in fact have a claim based upon the note and mortgage — or the proceeds of payment or liquidation; but our analysis in other cases has shown that while some party might have a claim based upon a paper instrument, the underlying debt was not funded or purchased by the party staking claim to the right of enforcement of the instrument.

This is often corroborated by the absence of any asserted claim that the debt is being enforced in addition to the paper instruments. A full case analysis would be necessary, following the TERA report, to flesh out this and other issues.

Note the distinction between claims about ownership of rights to the paper instrument and claims relating to receipt of payment from borrowers or third parties and receipt of payment upon liquidation of the property by sale to an alleged third party. For example, the master servicer might be collecting all the proceeds as “recovery of servicer advances” which means the foreclosure action was not for the alleged creditors/investors or trust but rather for the benefit of the master servicer.

This would mean that the foreclosure is being pursued not to provide a remedy to an injured party, but rather for the purpose of protecting future income. The defense would be that advances were made to the “beneficiaries” or “investors” by the servicer; but the truth is that such advances are made from a reserve “slush” fund that is in actuality a dynamic dark pool consisting of money from many investors in many trusts.

Hence there is no “recovery” but there is still collection of what the Master Servicer declares were “servicer advances.” That is profit, not reimbursement of expense. If that is the case, then the foreclosure proceeding is essentially riding the tail of servicer advances which by self-proclamation have turned an expectation of future profits into the illusion of a secured debt.

========================

Filed under: foreclosure |