Livinglies's Weblog

Hat tip to summer chic. I might add a hat tip to some State and Federal agencies that are waking up and trimming the edges around the false claims implied to support the remedy of foreclosure. Things are changing — and before the banks manage to use their influence in state and federal legislatures, homeowners would be doing themselves and everyone else a favor if they went on the attack now.

Getting down in the weeds is what wins. For about 2 decades or longer, lawyers have been claiming to represent companies that are implied to be creditors and companies that are implied to be servicers. In truth, the lawyer does not represent either one, and neither of those companies has ever touched a single penny of the payments tendered by homeowners.

The word “servicer” has been used to define any company that claims to be a servicer and who satisfies one of several elements.

One element is that it claimed to have physical possession of the implied loan file, including the promissory note.

Although untrue, this has always been implied and largely unchallenged by homeowners, thus forcing the court to rule in favor of the lawyer implying the existence of a claim.

The second condition is always argued but never true. That is, the company implied to be processing payments from the homeowner ahs inf act been doing so. Therefore its records of such are admissible as business records, and those business records are easily admitted into evidence against the homeowner as an exception to the hearsay rule. Until 2022, this was a somewhat gray area.

But in 2022, the Consumer Financial Protection Board changed all of that. It said that any company that was in fact, receiving and processing payments from homeowners was a servicer. This made sense since the record of payments could only come from transactions between the company receiving the payments and the homeowner who tendered such payments.

But companies like CoreLogic et al (FINTECH) continue to argue that they are NOT servicers because they do not own or hold the implied underlying obligation or any documents pertaining to the transaction with the homeowner. Most homeowners and lawyers back off simply because they don’t know the next step. Here it is —-

Servicing means receiving any scheduled periodic payments from a borrower pursuant to the terms of any federally related mortgage loan, including amounts for escrow accounts under section 10 of RESPA (12 U.S.C. 2609), and making the payments to the owner of the loan or other third parties of principal and interest and such other payments with respect to the amounts received from the borrower as may be required pursuant to the terms of the mortgage servicing loan documents or servicing contract. In the case of a home equity conversion mortgage or reverse mortgage as referenced in this section, servicing includes making payments to the borrower. 12 USC 1024.2

Filed under: foreclosure |