Servicer Advances Are an Illusion Too

Like everything else, “servicer advances” is a false label. There is no money being advanced. But there is money received by institutional investors who bought certificates under the mistaken belief that they were mortgage-backed securities. They receive that money regardless of whether or not payments are made by homeowners. The test for whether or not they will actually receive the money is whether or not the investment bank is continuing to sell new securities. Like any Ponzi scheme, a basic component is the continual payment of prior investors.

So you might ask, where does the money come from? And the answer is it comes from the investors. A portion of the proceeds of the sales of certificates is set aside in a reserve fund that is disclosed in the prospectus. It is also disclosed that they may be receiving their scheduled payments from that reserve fund.
The ability to create the reserve fund comes from the yield spread premium between the sales of certificates to institutional investors and the sales of Financial products to homeowners. I have previously written about how this works. But in summary, here it is.
Investors pay money to the investment bank for certificates lead promise scheduled payments, without a maturity date. This is based on a formula designed to produce a specific percentage return on investment. Since most of the institutional investors are stable managed funds, they were only seeking an increase in the current rate of return of 10 to 15%. That meant that if they were earning 4%, they only wanted 4 1/2% from the investment bank. The illusion is created by converting the percentages to dollars. That’s where the yield spread premium emerges.
An institutional investor who pays $1 million for a 4 1/2% return is seeking scheduled payments of $45,000 per year. The investment bank, through intermediaries, is closing deals with homeowners at rates varying from 5% to as much as 10%.
The yield spread premium results from a question: how much money does the investment bank need to “loan” in order to produce $45,000 per year. The answer, if they are creating the illusion of a loan at 10%, is that they only need to “lend” $450,000. The rest of the money — $550,000 — is a yield spread premium that goes into the pocket of the investment bank.
Yes, that means they made more money on the transaction than the entire amount received by the homeowner. It also gives them money to establish the reserve account from which to pay the institutional investors from their own funds.

Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.



Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

FREE REVIEW: Don’t wait, Act NOW!

CLICK HERE FOR REGISTRATION FORM. It is free, with no obligation and we keep all information private. The information you provide is not used for any purpose except for providing services you order or request from us. In  the meanwhile you can order any of the following:
CLICK HERE TO ORDER ADMINISTRATIVE STRATEGY, ANALYSIS AND NARRATIVE. This could be all you need to preserve your objections and defenses to administration, collection or enforcement of your obligation. Suggestions for discovery demands are included.
CLICK HERE TO ORDER TERA – not necessary if you order PDR PREMIUM.
CLICK HERE TO ORDER CONSULT (not necessary if you order PDR)
  • But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
  • Yes you DO need a lawyer.
  • If you wish to retain me as a legal consultant please write to me at
Please visit for more information.

4 Responses

  1. When you ask your Title Insurance company to provide you proof of lending – a copy of wire transfer from the alleged “lender” – they refuse to talk to you and either call police to escort clients from the office or verbally attack them – like clients need subpoena to make them to say anything

  2. My Assessor said that ALL property taxes are paid by CoreLogic.

    CoreLogic said they initiate workflow ( very interesting)

    PennyMac’s robo-signer Saldivar said PennyMac is the owner of my alleged “debt”

    PennyMac employee Felicia Brooks (from someone’s call center) said that the owner of my alleged debt is Ginnie Mae

    Ginnie Mae said they do not have records of my transaction starting from fake “Lender” Perl Mortgage.

    Bank of New York said that they are Processing Agent for some Ginnie Mae Trust where PennyMac is an Issuer (of MBS)

    PennyMac’s Chief Financial Officer Andrew Chang told SEC that PennyMac is not authorized to issue Ginnie Mae’s MBS.

    All lies, lies, lies, lies – covered by the Government who either repeat the same lies from the same script or stay silent pretending they don’t hear anythng

  3. Institutional investors were bailed out by the government. Principal returned. What was not returned was the egregious high interest rates they thought could be extorted from the very least likely to pay such high rates. Servicer advances exist – but they are funded by the very same perpetrators – who were bailed out to PAY the institutional investors. Who are we left with? The bottom feeders — under the Government – Private/Public Investment Program. This is huge violation of FDCPA. Because – the bottom feeders remain concealed. Core-Logic, Java, does not pay anything. Servicers do not pay anything. Servicer Advance trusts are “FUNDED” by the same investment bank perpetrators – and their affiliate hedge funds. It is called – DISTRESSED DEBT. Which occurred before any “debt” was ever recorded as in delinquency or default. Meaning -=- your so called mortgage was not a mortgage – and was unsecured. Meaning – it was recorded in default before any default – or even transaction – ever occurred. Meaning – you never got a MORTGAGE. Sorry – that is the bottom line. And, with wire transfer – how will you ever prove anything was FUNDED at the last transaction? You can’t. You need more discovery. What you need is PROOF of funding at last transaction. That is the KEY.

  4. So The town says CoreLogic pays the property taxes. Yet, I’ve been told by CoreLogic they are just the middleman who collects the quarterly information.
    So who is paying and directed by whom ??????
    I have yet to receive this answer by tax collectors office, CoreLogic , Servicers, Debt Collectors Liars or anyone in Government…,

Contribute to the discussion!

%d bloggers like this: