How to use the statutory definitions of the word “servicer”

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

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This is a perfect example of what I have been saying for about 15 years. CoreLogic is saying that the word “servicer” applies to any company that owns or holds the obligation defined by the note. They are attempting to introduce allegations of fact without offering any proof and without any request for a hearing or a court order. Neither one is permissible under the rules of procedure. The motion is at best premature and should be denied.
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It is the same fraudulent presumption that has allowed lawyers who implied that they represent companies that were named as “servicers” to create the false and fraudulent presumption that such companies possessed records of transactions with homeowners.
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Many victorious homeowners went home after winning wondering why they won. It was because of the hearsay rule that, in these circumstances, bars the introduction of reports by a person or entity that has NOT done any business with the homeowner. Such records are, therefore, not business records, and they are not an exception to the hearsay rule. Hence they are inadmissible.
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Next, The putative lawyer for CoreLogic ignores the above definition from the same statute that they quote. This statute expressly and unequivocally closes the loophole. Any company that is receiving, accounting, processing, or distributing payments received from homeowners is a servicer regardless of whether they own or hold any alleged obligation purportedly due from the homeowner.
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The court has no authority to change, alter, or amend the contents or consequence of the Federal Statute in the absence of a specific and express finding of ambiguity allowing it to interpret the intent or content of the statute.
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Accordingly, both their motion to dismiss and future motion for summary judgment should be denied to the extent they rely on the proposed “fact” that CoreLogic is not a servicer. It is a servicer, and it has been treated as such since May, 2022 under rules promulgated by the CFPB. The issue is settled.
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PRACTICE HINT: Every time opposing counsel uses the word “servicer,” “creditor,” or “holder,” the objection is that counsel is attempting to use facts that are not in evidence.
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Neil F Garfield, MBA, JD, 76, 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.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.

But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).

Yes you DO need a lawyer.
If you wish to retain me as a legal consultant please write to me at neilfgarfield@hotmail.com.

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