MORTGAGE BROKER AND LENDER LIABILITY

appraisal-fraud-and-industry-standards-described-in-2003-official-white-paper-red-flags-described-in-detail-with-excellent-diagrams-explanations-and-descriptions-of-best-practices

executive-accused-of-mortgage-securities-scheme-everyone-has-been-paid-at-least-once-100-cents-on-the-dollar-plus-fees-and-profits-now-they-want-your-house-too-are-you-going-to-let-that-happen

39 Responses

  1. Gaye, on February 19, 2023 at 5:53 am said:

    Trust related mortgages questions:
    The decedent set up a trust, and it holds lots of mortgages. The trustees first and only investment was a loan to her own daughter. This went unbeknownst to the beneficiaries. Does the trustee have to handle that mortgage loan as it would be done by mortgage institution with FICO scores, debt to ratio, and so forth?

  2. Jellybeans, on January 31, 2014 at 8:42 pm said:

    REASSIGNMENT ORDER OF THE NEW CENTURY MORTGAGE AND HOME123 CORPORATION BANKRUPTCY IN DELAWARE

    http://www.scribd.com/doc/203778041/REASSIGNMENT-ORDER-OF-THE-NEW-CENTURY-BANKRUPTCY-CASE-JAN-2014

  4. ABBY IN CA, on February 6, 2013 at 4:11 pm said:

    Motion to Deem Claim Non Dischargeable by homeowner in New Century bankruptcy in Delaware still ongoing as of Feb. 2013. The next omnibus hearing is March 7, 2013 at 10AM Delaware time.

    This homeowner also requesting a Trial.

    http://www.scribd.com/doc/124239137/In-New-Century-Liquidating-Trust-2012-Motion-to-Deem-Claim-Non-Dischargeable-by-homeowner

  5. ABBY IN CA, on August 15, 2012 at 12:56 pm said:

    NEW CENTURY MORTGAGE AND HOME 123 CORP VICTIMS===
    BREAKING NEWS===THE IRS IS GIVING BACK $131 MILLION DOLLARS TO THE NEW CENTURY BANKRUPTCY. THIS STATED IN HEARING ON AUGUST 14 2012.

    IF YOU HAVE NOT DONE SO, CONSULT AN ATTORNEY TO INQUIRE ABOUT A BANKRUPTCY CLAIM OR ADVERSARY PROCEEDING AGAINST THEM.

  8. Alison, on March 20, 2012 at 12:24 pm said:

    Rik, we also originated our loan w/ First Mortage Corporation. It was also a VA loan. We thought we were getting a tratitional 30 yr. fixed rate morgage backed by the Verterans adm. We also put $37K dwn.
    Turns out that Firts Mort. Corp. became the lender and asigned MERS as the nominee. The credit report from Krolls (a self acclaimed sub-prime credit reporter) showed that 2 maybe 3 loans were taken out, the creit report showed the high balance on our report was 609,337! None of this was made available to until out of pure fustration I went to the County Clerks office and retrieved our records, it apppears that First Mortgae Corp did a doc dump or something went wrong because I sure we were not sopposed to have these docs. After much research, found out there was no clear title on our house and hasn’t been since the early 1990’s. Looks like many people including the recorders office and other atty’s and house flippers were complicent in this all around fraud. Our home was paid in full many times over. So now I will get a securitization audit and a forensic one too. Wells Fargo is not youir lender Ric, only the servicer. They sent me a”satisfaction of mortgage, a release of mortgage, a certificate saying it was paid in full, a final eschow accounting, and a princible reconciliation. I personally thinl the heat was on First Moort. Corp. and they were playing hot potato with our loan (LIVES). I beleive thats where the credit default swaps started as thet never pulled loan from secondary market. Hope to hear from you again and know that you are not alone. The main player is First Mort Corp, with the help of MERS and the recorders office. (and just maybe the VA) Google “unsealed complaint US v Veterans Administration unsealed complant in Atlanta GA.”

  9. Alison, on March 2, 2012 at 10:37 pm said:

    I have the same problem with First Morgage. When I finially went to the recorders office to get my paperwork they had two different applications and one was for an Home Equity Loan with Wahhington Mutual. It looks to me that two loans were taken out in the same amount, and to top it all off neither was recorded with the recorders office. It looks like First Mortgage Corp. was caught red handed (as it was a VA loan) and did a complete document dump in the file including a satisifaction, a release, a final escow acct. disclosure, but no note and no release from Wamu. What in the hell is going on. Someone said “The more I look , the more I find”. How deep is this rabbit hole?
    My head is about to explode.

  10. Abby in CA, on January 27, 2012 at 4:41 pm said:

    BEWARE AND BE CAREFUL IF YOU ARE DOING THE INDEPENDENT FORECLOSURE REVIEW PAPERWORK — REMEMBER THE OCC CONSENT ORDERS WITH THE BIG BANKS? YOU HAVE UNTIL END OF APRIL TO SUBMIT THE PAPERWORK.

    IN EXAMINING MINE, I SEE THAT THE BANK INVOLVED IN MY FORECLOSURE HAS LISTED ITS LOAN NUMBER BUT NOT THE LOAN NUMBER THAT IS ACTUALLY ON MY NOTE AND DEED OF TRUST (MORTGAGE IN SOME STATES).

    IN FACT, THERE IS NO MENTION OF THE REAL LOAN NUMBER ANYWHERE ON THE INDEPENDENT REVIEW FORM.

    AND ON THE LAST PAGE WHERE THEY WANT YOU TO SIGN IT SAYS ‘by signing this document, I certify that all the information is truthful. I understand that knowingly submitting false information may constitute fraud. I affirm that I am the borrower or co-borrower of the mortgage loan on the property noted within this document, and I am authorized by all borrower(s) to have my signature grant permission to proceed with this request for review.”

    IT’S A TRAP. NOT ONLY THE ‘AFFIRMATION’ BUT THEN THEY WANT YOU TO CERTIFY ALL INFORMATION IS TRUTHFUL WHEN THEY DON’T EVEN USE THE LOAN NUMBER CONTAINED WITHIN THE EXECUTED LOAN DOCS, LIKE YOUR DEED OF TRUST OR NOTE.

    BEWARE. I’D CONSULT WITH AN ATTORNEY BEFORE SIGNING SOMETHING LIKE THIS.

    HERE IS LINK TO THE FREE FORECLOSURE REVIEW-OCC

    http://independentforeclosurereview.com/

  12. besik, on November 16, 2011 at 4:38 am said:

    I can deliver leased instruments to Organisations or

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    X% IS Lessee broker’s Commission and he determines his

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    Contact me through this email:(financialdraft55@gmail.com,) or

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  13. Loan modifications programs, on November 8, 2011 at 10:16 am said:

    Hello there, simply was aware of your blog via Google, and found that it’s truly informative. I’m gonna be careful for brussels. I will be grateful in case you continue this in future. Many folks will be benefited from your writing. Cheers!

  14. mark s sullivan, on April 19, 2011 at 1:41 pm said:

    what if we just take matters into our own hands and tell everyone in florida to wait inside their homes with a loaded weapon and when they come to take it. let them come in an then shoot them under the law.

  15. KimThomas, on November 2, 2010 at 6:08 pm said:

    RHODE ISLAND ATTORNEY GENERALS OFFICE WILL NOT BE INVESTIGATING ALLEGATION OF FRAUD ON FORECLOSURES & ROBO-SIGNERS!
    I was told today that the office of Rhode Islands Attorney General will not be investigating Allegation of Mortgage Fraud by Robo-Signers in which they told the press they were on board and we have proof of wrongdoing on Mortgage Assignments and Affadavits that will prove that these recordings have robo wriiten all over them yet now the Attorney Generals office Heather McLaughlin Director of Consumer Unit announces that they are to busy to investigate fraud committed on our citizens of Rhode Island! Shame on all of you as you are lucky to be that busy as thousands of Rhode Islanders would be willing to take your jobs that are losing their homes daily in a state that is non-judicial and can take peoples homes without even a court hearing.

    KimThomas, on October 24, 2010 at 2:58 pm Said:
    http://www.projo.com/economy/Fighting_Foreclosure_10-24-10_7FIGCK5_v36.503440.html#

    Attorney General needed with Heart & Bravery to put and end to this corruption once and for all.This is Our Country and State.Just want to get paid go to Washington.

  16. Pauline Grace, on October 6, 2010 at 3:13 pm said:

    My mortgage was $124,000…property was titled to the lender after foreclosure and conveyed to Fannie Mae for $132,000…property was then transferred to new purchaser for $156,000…all my equity was lost because lender would not work with me…am I entitled to any portion of Fannie Mae’s profit in selling my house?

  17. Abby in CA, on July 28, 2010 at 5:25 pm said:

    Wed Jul 28, 12:44 pm ET

    WASHINGTON (Reuters) – Mortgage loan originators will have to be fingerprinted and sign up to a central registry to do business in future, according to final rules issued on Wednesday by the Federal Reserve and other regulators.

    The rules are part of the Secure and Fair Enforcement for Mortgage Licensing Act of 2008, also called the S.A.F.E. Act.

    They were issued by the Fed, Comptroller of the Currency, Federal Deposit Insurance Corp, Office of Thrift Supervision, Farm Credit Administration and National Credit Union Administration.

    Mortgage brokers came under tough scrutiny in the wake of the 2007-09 financial crisis, with some lawmakers and regulators sharply critical of underwriting standards and practices that were seen as so loose they helped foster a housing price bubble.

    The S.A.F.E. Act specifies that mortgage brokers who are employees of agency-regulated institutions must register with the Nationwide Mortgage Licensing System and Registry,

    “As part of this registration process, residential mortgage loan originators must furnish to the registry information and fingerprints for background checks,” a joint release from regulators said.

    The final rules take effect on October 1 and it is anticipated that the registry could start accepting registrations as early as January 28, 2011.

    Industry sources say that thousands of brokers have gone through mandatory education, credit checks and state and federal testing in order to retain the right to handle mortgage originations.

    The process has thinned the ranks of brokers, who may be even fewer soon given talk of a 30 percent fail rate on testing, said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York.

    “It cleaned up the industry,” said Moulton, who nonetheless cautioned that he felt credit availability for mortgage lending has been reduced as a result of uncertainty caused by U.S. financial regulatory reform.

  18. brian davies, on January 16, 2010 at 9:13 pm said:

    Teps and warranties of pretender lender UAMC to their Credit Agent representing the warehouse lenders. This is from the filing online from Lennar. It is pertinent in the fact that the note was directly given to the warehouse as collateral. Also that the lender complied with the reps and warranties below.

    9. SPECIAL REPRESENTATIONS, WARRANTIES AND COVENANTS CONCERNING COLLATERAL

    9.1. Special Representations and Warranties Concerning Eligibility as Seller/Servicer of Mortgage Loans

    Borrowers represent and warrant to Credit Agent and Lenders, as of the date of this Agreement and as of the date of each Warehousing Advance Request and the making of each Warehousing Advance, that each Borrower is approved and qualified and in good standing as a lender, seller/servicer or issuer, as set forth below, and meets all requirements applicable to its status as such:

    9.1 (a) UAMCLLC is approved and qualified and in good standing as a lender or seller/servicer, as set forth below, and meets all requirements applicable to its status as:

    (i) A HUD-approved non-supervised mortgagee, eligible to originate, purchase, hold, sell and service FHA fully insured Mortgage Loans.

    (ii) A Ginnie Mae-approved seller/servicer of Mortgage Loans and issuer of Mortgage-backed Securities guaranteed by Ginnie Mae.

    (iii) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    (iv) A Fannie Mae-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage Loans to be sold to Fannie Mae.

    (v) A Freddie Mac-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage Loans to be sold to Freddie Mac.

    (vi) An RFC-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Loans to be sold to RFC.

    9.1 (b) EHMI is approved and qualified and in good standing as a lender or seller/servicer, as set forth below, and meets all requirements applicable to its status as:

    (i) A HUD-approved non-supervised mortgagee, eligible to originate, purchase, hold, sell and service FHA fully insured Mortgage Loans.

    (ii) A Ginnie Mae-approved seller/servicer of Mortgage Loans and issuer of Mortgage-backed Securities guaranteed by Ginnie Mae.

    (iii) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    (iv) A Fannie Mae-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage Loans to be sold to Fannie Mae.

    (v) A Freddie Mac-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage Loans to be sold to Freddie Mac.

    (vi) An RFC-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Loans to be sold to RFC.

    Page 9-1

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    9.1 (c) EHMCA is approved and qualified and in good standing as a lender or seller/servicer, as set forth below, and meets all requirements applicable to its status as:

    (i) A HUD-approved non-supervised mortgagee, eligible to originate, purchase, hold, sell and service FHA fully insured Mortgage Loans.

    (ii) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    9.1 (d) UAMCC is approved and qualified and in good standing as a lender or seller/servicer, as set forth below, and meets all requirements applicable to its status as:

    (i) A HUD-approved non-supervised mortgagee, eligible to originate, purchase, hold, sell and service FHA fully insured Mortgage Loans.

    (ii) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    9.1 (e) UMACP is approved and qualified and in good standing as a lender or seller/servicer, as set forth below, and meets all requirements applicable to its status as:

    (iii) A HUD-approved non-supervised mortgagee, eligible to originate, purchase, hold, sell and service FHA fully insured Mortgage Loans.

    (iv) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    9.1 (f) EHMLLC is approved and qualified and in good standing as a lender or seller/servicer, as set forth below, and meets all requirements applicable to its status as:

    (iii) A HUD-approved non-supervised mortgagee, eligible to originate, purchase, hold, sell and service FHA fully insured Mortgage Loans.

    (iv) A Ginnie Mae-approved seller/servicer of Mortgage Loans and issuer of Mortgage-backed Securities guaranteed by Ginnie Mae.

    (v) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    (vi) A Fannie Mae-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage Loans to be sold to Fannie Mae.

    (vii) A Freddie Mac-approved seller/servicer of Mortgage Loans, eligible to originate, purchase, hold, sell and service Mortgage Loans to be sold to Freddie Mac.

    (viii) A lender in good-standing under the VA loan guarantee program eligible to originate, purchase, hold, sell and service VA-guaranteed Mortgage Loans.

    9.2. Special Representations and Warranties Concerning Warehousing Collateral

    Each Borrower represents and warrants to Credit Agent and Lenders, as of the date of this Agreement and as of the date of each Warehousing Advance Request and the making of each Advance, that:

    Page 9-2

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    9.2 (a) No Borrower has selected the Collateral in a manner so as to affect adversely Lenders’ interests.

    9.2 (b) Borrowers are the legal and equitable owner and holder, free and clear of all Liens (other than Liens granted under this Agreement) of the Pledged Assets. All Pledged Assets and related Purchase Commitments have been duly authorized and validly issued to Borrowers, and all of the foregoing items of Collateral comply with all of the requirements of this Agreement, and have been and will continue to be validly pledged or assigned to Credit Agent, subject to no other Liens.

    9.2 (c) Each Borrower has, and will continue to have, the full right, power and authority to pledge the Collateral pledged and to be pledged by it under this Agreement.

    9.2 (d) Each Mortgage Loan and each related document included in the Pledged Loans (1) has been duly executed and delivered by the parties to that Mortgage Loan and that related document, (2) has been made in compliance with all applicable laws, rules and regulations (including all laws, rules and regulations relating to usury), (3) is and will continue to be a legal, valid and binding obligation, enforceable in accordance with its terms, without setoff, counterclaim or defense in favor of the mortgagor under the Mortgage Loan or any other obligor on the Mortgage Note, (4) has not been modified, amended or any requirements of which waived, except in writing that is part of the Collateral Documents, and (5) is an Eligible Asset as described on Exhibit H.

    9.2 (e) Each Pledged Loan is secured by a Mortgage, and each Pledged Agreement for Deed constitutes a Lien, on real property and improvements located in one of the states of the United States or the District of Columbia.

    9.2 (f) Except for open-ended Second Mortgage Loans, Construction/Perm Mortgage Loans and Third Party Builder Construction Mortgage Loans, each Pledged Loan has been closed or will be closed and funded with the Advance made against it.

    9.2 (g) Each First Mortgage Loan is secured by a First Mortgage on the real property and improvements described in or covered by that Mortgage.

    9.2 (h) Each First Mortgage Loan has or will have a title insurance policy, in ALTA form or equivalent, from a recognized title insurance company, insuring the priority of the Lien of the Mortgage and meeting the usual requirements of Investors purchasing those Mortgage Loans.

    9.2 (i) Each Second Mortgage Loan is secured by a Second Mortgage on the real property and improvements described in or covered by that Mortgage.

    9.2 (j) To the extent required by the related Purchase Commitment or by Investors generally for similar Mortgage Loans, each Second Mortgage Loan has or will have a title insurance policy, in ALTA form or equivalent, from a recognized title insurance company, insuring the priority of the Lien of the Mortgage and meeting the usual requirements of Investors purchasing those Mortgage Loans.

    9.2 (k) Each First Mortgage Loan has been evaluated or appraised in accordance with Title XI of FIRREA.

    9.2 (l) Each Second Mortgage Loan has been evaluated or appraised in accordance with industry standards for Investors providing Purchase Commitments for and purchasing those Mortgage Loans.

    Page 9-3

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    9.2 (m) The Mortgage Note for each Pledged Loan is (1) payable or endorsed to the order of Borrower, (2) an “instrument” within the meaning of Article 9 of the Uniform Commercial Code of all applicable jurisdictions and (3) is denominated and payable in United States dollars.

    9.2 (n) No default has existed for 60 days or more under any Mortgage Loan included in the Pledged Loans, except for a Foreclosure Mortgage Loan, or under any Pledged Agreement for Deed.

    9.2 (o) No party to an Eligible Asset or any related document is in violation of any applicable law, rule or regulation that would impair the collectibility of the Eligible Asset or the performance by the mortgagor or any other obligor of its obligations under the Eligible Asset or any related document.

    9.2 (p) No party involved in the origination of a Pledged Asset, including the originator, broker, title company or appraiser, was named on the version of the Exclusionary List in effect on the date of the Mortgage Note for that particular Mortgage Loan.

    9.2 (q) All fire and casualty policies covering the real property and improvements encumbered by each Mortgage included in the Pledged Loans and each Pledged Agreement for Deed (1) name and will continue to name a Borrower and its successors and assigns as the insured under a standard mortgagee clause, (2) are and will continue to be in full force and effect and (3) afford and will continue to afford insurance against fire and such other risks as are usually insured against in the broad form of extended coverage insurance generally available.

    9.2 (r) Pledged Loans and Pledged Agreements for Deed secured by real property and improvements located in a special flood hazard area designated as such by the Director of the Federal Emergency Management Agency are and will continue to be covered by special flood insurance under the National Flood Insurance Program.

    9.2 (s) The real property and improvements securing each Pledged Asset are free of damage or waste and are in good repair, and no improvement located on or being a part of such real property violates any applicable zoning law or regulation.

    9.2 (t) No notice of any partial or total condemnation has been given with respect to the real property and improvements securing any Pledged Asset.

    9.2 (u) Each Pledged Loan against which an Advance has been or will be made on the basis of a Purchase Commitment meets all of the requirements of that Purchase Commitment, and each Pledged Security against which an Advance is outstanding meets all of the requirements of the related Purchase Commitment.

    9.2 (v) Pledged Loans that are intended to be exchanged for Agency Securities comply or, prior to the issuance of the Agency Securities will comply, with the requirements of any governmental instrumentality, department or agency issuing or guaranteeing the Agency Securities.

    9.2 (w) Pledged Loans that are intended to be used in the formation of Mortgage-backed Securities (other than Agency Securities) comply with the requirements of the issuer of the Mortgage-backed Securities (or its sponsor) and of the Rating Agencies.

    9.2 (x) The original assignments of Mortgage delivered to Credit Agent for each Pledged Loan and Pledged Agreement for Deed are in recordable form and comply with all applicable laws and regulations governing the filing and recording of such documents.

    Page 9-4

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    9.2 (y) None of the mortgagors, guarantors or other obligors of any Pledged Asset is a Person named in any Restriction List and to whom the provision of financial services is prohibited or otherwise restricted by applicable law.

    9.2 (z) No Pledged Loan is a Discontinued Loan.

    9.2 (aa) Each Pledged Asset secured by real property to which a Manufactured Home is affixed will create a valid Lien on that Manufactured Home that will have priority over any other Lien on the Manufactured Home, whether or not arising under applicable real property law.

    9.3. Special Affirmative Covenants Concerning Warehousing Collateral

    As long as the Warehousing Commitment is outstanding or there remain any Obligations to be paid or performed under this Agreement or under any other Loan Document, each Borrower will:

    9.3 (a) Warrant and defend the right, title and interest of Credit Agent and Lenders in and to the Collateral against the claims and demands of all Persons.

    9.3 (b) Service or cause to be serviced all Pledged Loans in accordance with the standard requirements of the issuers of Purchase Commitments covering them and all applicable HUD, Fannie Mae and Freddie Mac requirements, including taking all actions necessary to enforce the obligations of the obligors under such Mortgage Loans. Service or cause to be serviced all Mortgage Loans backing Pledged Securities in accordance with applicable governmental requirements and requirements of issuers of Purchase Commitments covering them. Hold all escrow funds collected in respect of Pledged Loans and Mortgage Loans backing Pledged Securities in trust, without commingling the same with non-custodial funds, and apply them for the purposes for which those funds were collected.

    9.3 (c) Execute and deliver to Credit Agent with respect to the Collateral those further instruments of sale, pledge, assignment or transfer, and those powers of attorney, as required by Credit Agent, and do and perform all matters and things necessary or desirable to be done or observed, for the purpose of effectively creating, maintaining and preserving the security and benefits intended to be afforded Credit Agent under this Agreement.

    9.3 (d) Notify Credit Agent within 2 Business Days of any default under, or of the termination of, any Purchase Commitment relating to any Pledged Loan, Eligible Mortgage Pool, or Pledged Security.

    9.3 (e) Promptly comply in all respects with the terms and conditions of all Purchase Commitments, and all extensions, renewals and modifications or substitutions of or to all Purchase Commitments. Deliver or cause to be delivered to the Investor the Pledged Loans and Pledged Securities to be sold under each Purchase Commitment not later than the mandatory delivery date of the Pledged Loans or Pledged Securities under the Purchase Commitment.

    9.3 (f) Compare the names of every mortgagor, guarantor and other obligor of every Mortgage Loan, together with appropriate identifying information concerning those Persons obtained by any Borrower, against every Restriction List, and make certain that none of the mortgagors, guarantors or other obligors of any Mortgage Loan is a Person named in any Restriction List and to whom the provision of financial services is prohibited or otherwise restricted by applicable law.

    Page 9-5

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    9.3 (g) Prior to the origination by any Borrower of any Mortgage Loans for sale to Fannie Mae, enter into an agreement among such Borrower, Lender and Fannie Mae, pursuant to which Fannie Mae agrees to send all cash proceeds of Mortgage Loans sold by such Borrower to Fannie Mae to the Cash Collateral Account.

    9.3 (h) Prior to the origination by any Borrower of any Mortgage Loan to be registered on the MERS system, obtain the approval of Credit Agent and enter into an Electronic Tracking Agreement.

    9.4. Special Negative Covenants Concerning Warehousing Collateral

    As long as the Warehousing Commitment is outstanding or there remain any Obligations to be paid or performed, no Borrower will, either directly or indirectly, without the prior written consent of Credit Agent:

    9.4 (a) Amend or modify, or waive any of the terms and conditions of, or settle or compromise any claim in respect of, any Pledged Asset, except in a manner consistent with the terms of the related Purchase Commitment, if applicable, and any FHA Insurance policy or VA guaranty.

    9.4 (b) Sell, transfer or assign, or grant any option with respect to, or pledge (except under this Agreement and, with respect to each Pledged Asset, the related Purchase Commitment) any of the Collateral or any interest in any of the Collateral.

    9.4 (c) Make any compromise, adjustment or settlement in respect of any of the Collateral or accept any consideration other than cash in payment or liquidation of the Collateral.

    9.4 (d) Cause UAMC Asset to issue any stock or other securities in addition to or in substitution for the Pledged Shares, except to UAMCLLC, and UAMCLLC will pledge hereunder, immediately upon its acquisition (directly or indirectly) thereof, any and all additional shares of stock or other securities of UAMC Asset.

    9.5. Special Affirmative Covenants Concerning Construction/Perm Mortgage Loans and Third-Party Builder Construction Mortgage Loans

    As long as the Warehousing Commitment is outstanding or there remain any Obligations to be paid or performed under this Agreement or under any other Loan Document, each Borrower will:

    9.5 (a) Prior to the submission of a request for an initial Warehousing Advance against a Third Party Builder Construction Mortgage Loan, Borrowers reviewed the financial and business ability of the builder to complete the improvements to the premises encumbered by a Pledged Mortgage in a timely and cost efficient manner.

    9.5 (b) Notify Credit Agent within 2 Business Days of the following events: (1) a lien filed against premises encumbered by a Pledged Mortgage and not removed within 15 days of the filing, (2) a Pledged Mortgage being out of balance with the Cost Breakdown and not brought back in balance by the mortgagor within 15 days after such determination by such Borrower, and (3) any damage or destruction of the premises encumbered by a Pledged Mortgage.

    Page 9-6

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    9.6. Special Representations Concerning Construction/Perm Mortgage Loans and Third Party Builder Construction Mortgage Loans

    Borrowers represent and warrant to Credit Agent and Lenders, as of the date of this Agreement and as of the date of each Advance Request, that:

    9.6 (a) Each Construction/Perm Mortgage Loan and Third Party Builder Construction Loan included in the Pledged Loans (1) has an American Land Title Association Lender’s construction loan policy or commitment, (2) has “all risk” builder’s insurance and workers’ compensation insurance, (3) has a survey prepared and certified by a duly registered surveyor or title company showing no encroachments of the improvements or the proposed improvements to be constructed on the premises encumbered by the Pledged Loan on to other lands or easements or restrictions, unless such encroachments have been insured over or are acceptable to the Investor, (4) has building permits and all necessary licenses and approvals for the construction of the improvements on the premises encumbered by the Pledged Loan, (5) has a “as completed” appraisal, (6) has a fixed price general contract issued by a licensed contractor, and (7) has all necessary utilities available to the premises encumbered by the Pledged Loan.

    9.6 (b) Prior to the initial Advance against a Construction/Perm Mortgage Loan or a Third Party Builder Construction Mortgage Loan included in the Pledged Loans, Borrowers shall have received (1) a Cost Breakdown, (2) a draw schedule, and (3) an inspection report.

    9.6 (c) Prior to each Advance against a Construction/Perm Mortgage Loan or a Third Party Builder Construction Mortgage Loan included in the Pledged Loans, Borrowers (i) shall have received (A) an inspection report confirming completion of the work for which such Advance is being requested and the Total Hard Costs are adequate to complete the improvements and (B) invoices for each soft cost reimbursement for which such Advance is being requested, and (ii) shall not have received a notice of intent to assert a Lien from any contract, subcontractor, material supplier or other Person.

    9.6 (d) Prior to the final Advance against a Construction/Perm Mortgage Loan or a Third Party Builder Construction Mortgage Loan included in the Pledged Loans, Borrowers shall have received, (1) a final inspection report or certificate of occupancy confirming completion of all work in accordance with the plans and specifications, (2) final lien waivers, (3) final certificate of appraiser that the premises encumbered by the Pledged Loan equals the As Completed Appraised Value, and (4) a datedown endorsement from the title insurance company showing clear title as of the date of disbursement of such Advance.

    9.6 (e) Within 15 days after the final Advance against a Construction/Perm Mortgage Loan or a Third Party Builder Construction Mortgage Loan included in the Pledged Loan, Borrowers shall receive any Mortgage Note modification or modified Mortgage Note delivered in connection with a Construction/Perm Mortgage Loan and a Mortgage Note or Wet Settlement package evidencing a Mortgage Loan which refinances a related Mortgage Loan.

    9.7. Special Representations and Warranties Concerning Receivables

    Borrowers hereby represent and warrant to Credit Agent and Lenders, as of the date of this Agreement and as of the date of each Advance Request and the making of each Advance that:

    9.7 (a) Borrowers are the legal and equitable owners and holders, free and clear of all Liens (other than Liens granted hereunder) of the Receivables, and the Receivables have been and will continue to be subject to a security interest in favor of the Credit Agent, subject to no other Liens.

    Page 9-7

    ——————————————————————————–
    9.7 (b) Borrowers have, and will continue to have, the full right, power and authority to grant a security interest in the Receivables to the Credit Agent.

    9.7 (c) Each Receivable is a valid, enforceable right to retain amounts received from obligors under Mortgage Loans serviced by Borrowers, or a valid, enforceable right to payment from Fannie Mae, Freddie Mac, Ginnie Mae, VA, FHA or a private mortgage insurer, is currently due, and as to which no condition exists that will impair or materially delay payment thereof.

    9.7 (d) To the best of Borrowers’ knowledge, with respect to any Receivables, the mortgagor who is liable for payments that will be applicable to such Receivables, or Fannie Mae, Freddie Mac, Ginnie Mae, FHA, VA or the private mortgage insurer, obligated thereon, has no defense, setoff, claim or counterclaim against Borrowers which can be asserted against the Credit Agent, whether in any proceeding to enforce the Credit Agent’s security interest in such Receivable or otherwise.

    9.7 (e) Except for the Acknowledgment Agreements, to the extent required, no consent of any Person is required for the grant of a security interest in the Receivables to the Credit Agent, and no consent will need to be obtained upon the occurrence of an Event of Default for the Credit Agent to exercise its rights with respect to any of the Receivables.

    9.8. Special Representations Concerning Pledged Shares

    Borrowers hereby represent and warrant to Credit Agent and Lenders, as of the date of this Agreement and as of the date of each Advance Request for an Advance and the making of each such Advance, that:

    9.8 (a) UAMCLLC has title to the Pledged Shares and will have title to all further Pledged Shares hereafter issued, free of all Liens except the security interest in favor of the Credit Agent.

    9.8 (b) UAMCLLC has full power and authority to subject the Pledged Shares to the security interest created hereby.

    9.8 (c) No financing statement covering all or part of the Pledged Shares is on file in any public office (except for any financing statements filed by the Credit Agent).

    9.8 (d) The Pledged Shares have been duly authorized and validly issued by UAMC Asset and are fully paid and non-assessable. The certificates representing the Pledged Shares are genuine. The Pledged Shares are not subject to any offset or similar right or claim of the issuers thereof.

    9.8 (e) The Pledged Shares have been delivered to the Credit Agent and constitute 100% of the issued and outstanding shares of capital stock of UAMC Asset.

    9.9. Special Representations and Warranties Concerning Foreclosure Claim Receivables and Foreclosure Mortgage Loans

    Borrowers hereby represent and warrant to Credit Agent and Lenders, as of the date of this Agreement and as of the date of each Advance Request for an Advance against Foreclosure Claim Receivables or Foreclosure Mortgage Loans and the making of each such Advance, that:

    Page 9-8

    ——————————————————————————–
    9.9 (a) The Mortgage Loan with respect to which such Advance was made by Borrowers is in foreclosure, or there will be commenced and continuing bankruptcy or similar proceedings involving the obligor on such Mortgage Loan, or a Borrower has commenced loss mitigation action with respect to such Mortgage Loans.

    9.9 (b) In the event the obligor on such Mortgage Loan fails to make the payment as to which said receivable relates, Borrowers are entitled to reimbursement therefore on a priority basis pursuant to the terms of the applicable Servicing Contract out of proceeds of the sale or other disposition or liquidation of said Mortgage Loan or out of insurance proceeds, including, without limitation, private mortgage insurance proceeds and the proceeds of any guaranty of the obligations of the obligor thereunder.

    9.9 (c) Said receivable is and will be free and clear of all Liens, claims and encumbrances, except Liens in favor of the Credit Agent for the benefit of the Lenders.

    9.10. Voting Rights; Dividends; Etc.

    9.10 (a) Subject to paragraph (d) of this Section 9.10, UAMCLLC shall be entitled to exercise or refrain form exercising any and all voting and other consensual rights pertaining to the Pledged Shares for any purpose not inconsistent with the terms of this Agreement; provided, however, that UAMCLLC shall not exercise or refrain from exercising any such right if such action could reasonably be expected to have a material adverse effect on the value of the Collateral or any material part thereof.

    9.10 (b) Any and all dividends paid in respect of the Pledged Shares after the occurrence and during the continuance of any Default or Event of Default shall be forthwith delivered to the Credit Agent to hold as Collateral and shall, if received by any Borrower, be received in trust for the benefit of Lenders, be segregated from the other property or funds of Borrowers, and be forthwith delivered to Credit Agent as Collateral in the same form as so received (with any necessary endorsement or assignment). Each Borrower shall, upon request by Lenders, promptly execute all such documents and do all such acts as may be necessary or desirable to give effect to the provisions of this Section 9.10(b).

    9.10 (c) Credit Agent will execute and deliver (or cause to be executed and delivered) to UAMCLLC all such proxies and other instruments as UAMCLLC may reasonable request for the purpose of enabling UAMCLLC to exercise the voting and other rights that it is entitled to exercise pursuant to Section 9.10(a) and to receive the dividends that it is authorized to receive and retain pursuant to Section 9.10(b).

    9.10 (d) Upon the occurrence and during the continuance of any Event of Default, Credit Agent shall have the right in its sole discretion, and Borrowers shall execute and deliver all such proxies and other instruments as may be necessary or appropriate to give effect to such right, to terminate all rights of Borrowers to exercise or refrain from exercising the voting and other consensual rights that it would otherwise be entitled to exercise pursuant to Section 9.10(a) hereof, and all such rights shall thereupon become vested in Credit Agent who will thereupon have the sole right to exercise or refrain from exercising such voting and other consensual rights; provided, however, that Credit Agent and Lenders shall not be deemed to possess or have control over any voting rights with respect to any Collateral unless and until Credit Agent has given written notice to Borrowers that any further exercise of such voting rights by Borrowers is prohibited and that Credit Agent and/or its assigns will henceforth exercise such voting rights; and provided further, that neither the registration of any item of Collateral in Credit Agent’s name nor the exercise of any voting rights with respect thereto shall be deemed to constitute a retention by Credit Agent or Lenders of any such Collateral in satisfaction of the Obligations or any part thereof.

    End of Article 9

  19. Irene, on January 15, 2010 at 8:55 am said:

    Can anyone tell me where the sattute can be found that says:
    If a lender gives a curtesty loan in the state of wisconsin they still have to obey the federal and state tila, regulation Z. etc…

    I’m fighting predatory lenders/unlicensed in wisconsin and they say they can give out up to five loans in Wisconsin and they don’t have to give tila.
    My mortgage is on Owner ocupied residence.

  20. Joseph J. Huprich, Esq., on October 16, 2009 at 6:21 pm said:

    I have been embroiled in a predatory loan case for a while now. Borrowers only spoke spanish, broker forged all of the loan application docs, they had good credit but got an “adjustable” rate loan at 11.3%, with a minimum rate of 7.75% – which means the rate will never go below that, and paid out $17k plus for broker fees. Dragged to federal court by the banks and then then bludgeoned us to death with motions to dismiss and an MSJ before discovery ever started! Judge held that equitable tolling shouldn’t apply because borrowers were “on notice” when they sought a loan mod in Jan 2008. Now we’re headed back to state court to argue rescission by fraud. I’ve been arguing that broker is original lender’s agent and therefore liable for the forgeries/fraud. Anyone out there with similar litigation let me know or feel free to contact me for research collaboration. huprichlaw@gmail.com

  21. Andrew, on August 13, 2009 at 10:52 pm said:

    To homeowners and the like who are facing same situation as quoted by “Diane on December 31st 2008, need to do two very important documents;

    1: File a Substitution of Trustee

    2. File a Revocation of Power of Attorney

    Both of these are done filed by the Trustor (who is the Borrower). They and they alone have signatures on the Trust Deed, and because there is no signatures from a Trustee, Beneficiary, Lender, Bank Official or for that matter anyone else…. This is deemed a UNI-LATERAL CONTRACT which in layman’s terms means the Homeowner may change theses above named documents, in addition to others.

    All Contracts to be enforceable by any form of law are required to be signed by two parties and in the Real Estate, in most states require 2 – 3 witnesses as in Florida.

    Hope this helps another Lay-person. For further non-legal, non lawyer nor financial advice, they may call 503 895 4146 or email cci_andrew@hotmail.com

  22. EM Blocker, on June 30, 2009 at 12:29 am said:

    My mortgage is with a federal credit union. I tried for over a year to do a modification, etc to no avail. I am trying to fight the foreclosure now. Can I use TILA as a defense. Also the copy if the “intent to forclose” they attached to the court papers is incorrect, its acually on a totally different property. HELP, my 30 days ends July 1. Thank you

  23. John Haggerty, on June 29, 2009 at 1:18 am said:

    Yield Spread Premium is a fancy term for a fee paid by the lender to the broker in order to secure a higher interest rate from the borrower. It is also possible for the broker to pay the lender to obtain a lower interest rate. As shady as the term YSP is since no one understands it, it is not nearly as bad as what the direct lenders do without disclosing the profit they are making on the loan by charging usury rates. The largest contributors to the Republican and Democrat campaigns one year was Ameriquest Mortgage. An example would be the cap of 6% in fees paid to the broker, where Ameriquest has many times charged 15% in fees or more. They have been caught several times and they have been slapped on the hands and required to pay back any over-payments they collected on loans that were litigated.

  24. Rik, on May 21, 2009 at 3:01 pm said:

    HI all,

    I have reviewed my original mortgage documents and I have noticed that there are two copies of the same form….(HUD/VA Addendum t Uniform Residential Loan Application) …one with First Mortgage Corp listed as the lender and Wells Fargo Bank, N.A. as the Sponsor/Agent, and one with these roles reversed.

    Also one has a Lenders ID Code (Wells Fargo as Lender) and the other has a Sponsor /Agent ID Code (First Mortgage). Neither has both.

    These forms contradict one another, and I assume that only one is correct. Would this be considered a RESPA violation?

    There are several other instances where either Wells Fargo or First Mortgage are interchanged as lender or Sponsor/Agent. The documents were mixed in with many other documents which I signed while at the closing, and they look identical except for the reversal of lender references.

    Another point would be my “VA Report and Certification of Loan Disbursement” form. This form lists First Mortgage Corp as the lender in section 24, and lists Wells Fargo as a “In Care of” reference later in the document. I assume this indicates that First Mortgage is the lender and Wells Fargo is the servicer? (Wells Fargo filed the Lis Pendens in my case.)

    Wells Fargo and Florida Default Law Group have not responded in a positive way to any of my requests for information of filings. It seems they are just throwing lots of boiler plate documents at me in hopes of scaring me off. WRONG!!

    Steps Taken so far…
    – Response to intial claim filed. (Lost note…usual stuff)
    – QWR Submitted (45 days, no response) Motion to compel in the works.
    – Recission Letter Sent to Wells Fargo and First Mortgage.
    – Motion to dismiss due to Lack of Subject Matter Jurisdiction filed.
    – Florida Default Law Group – submitted amended claim saying note was found. SUPRISE!! Also filed defective Affidavit. (I intend to file a motion to dismiss this affidavit.)

    Comments suggestions welcomed.

    Thanks in advance.

    Rik

  25. louie, on May 7, 2009 at 9:51 am said:

    Wow, often I agree with mostly everything in this site but, when it comes to TILA issues is not a matter of opinion but a matter of rules and facts. i would advice anyone here searching for TILA information to consult a qualified attorney. Please do not attempt to argue on your own. Someone’s opinion may sound good to you but may not be the answer. Good luck

  26. Mortgage Audit, on April 29, 2009 at 10:14 am said:

    HI Alina,

    Can you send me a copy of your HUD-1?

    Thanks,

    Mortgage Audits
    oliver@ipa.net
    john

  27. Alina, on April 29, 2009 at 9:38 am said:

    Hi Mortgage Audit and Judy Scott,

    When I reviewed my loan documents, my YSP was also not disclosed under the 800 section of the HUD-1. There is a mortgage broker’s agreement I signed at closing that stated that the mortgage broker fee will be between 0 and 7200 and that if a range is disclosed the actual amount will be disclosed at closing. IT WAS CLOSING. Nothing listed on the HUD-1.

    Alina

  28. Mortgage Audit, on April 29, 2009 at 9:04 am said:

    Judy and Michael,

    Here is a site to which you can learn the issues of YSP and Novastar.

    http://www.kuow.org/program.php?id=12809

    This site is perhaps the start and you will see that Novastar settled out of court with the suits in Washington state.

    Mortgage Audits
    oliver@ipa.net
    john

  29. Mortgage Audit, on April 29, 2009 at 8:58 am said:

    Hi Judy Scott,

    I would need to look at the complete loan documents to be able to see what is going on with your loan.

    You should see the YSP listed in the 800 section (2nd page) of the HUD-1 Settlement Statement.

    IF not you have hidden YSP in your loan. You can contact me at my email.

    Mortgage Audits
    oliver@ipa.net
    john

  30. Judy A Scott, on April 28, 2009 at 5:45 pm said:

    The YSP was stated it will not be charged to us however; it was. They stated the loan amount of $170,000.00 on the TIL yet they charged us and financed our principal loan amount at $175,500.00 .
    Where does the $5,500.00 come in at?

  31. Judy A Scott, on April 22, 2009 at 9:47 am said:

    I have read pertinent parts of the TILA ACT do I get it ? That it states that the bank (ie) funder, lender is not allowed to charge any costs or fees to be financed into the principal loan?

    Judy Scott
    Illinois

  32. Michael Phillips, on April 19, 2009 at 3:08 am said:

    John Dunn:

    John we don’t disagree, in fact I agree with what you said. However your statement assumes I was a proponent of not stating the YSP on the GFE and HUD-1 closing statement –THAT’S ILLEGAL and unnecessary. If you have a good relationship with your client they don’t mind.

    Autoloan YSP’s. You said you one a case in Arkansas, which then I am assuming you have been admitted to the bar in that state. California has a law limiting YSP to $200 dollars on auto loans-stick with mortgages.

    Bumping the interest rate for YSP. John an interest rate increase of 8% would give an YSP of 1600-2400 basis points-that would have been great if it existed, but it didn’t. The max increase for a YSP in the universe was 2.5%. From an increase of 1% on a 5% loan for 200k costs $45k on a thirty, a 2.5% $117k, an 8% $185k.

    I don’t know what you mean by “Nova Star broker”, Nova Star was a lender and received no YSP, as they securitized their loans. Perhaps you were referring to brokers who used their wholesale line.

    John I would be happy to correspond with you, you sound intelligent, and albeit perhaps inexperienced at the level I have been.

    I would love to work with you, if you send me information on your company I would be happy to refer you business.

    Yours truly,

    Michael Phillips, W.T.F.
    Wealth and Trust Financer
    michaelp@lmallp.com see us at saveyourcave.org a new site coming, and donate to livinglies.wordpress.com.

  33. Michael Phillips, on April 19, 2009 at 3:07 am said:

    MF

    I would like to respond to MF question about YSP and POINTS being paid to a broker. The answer is its okay. And a 4% broker fee is okay depending on the loan type and amount. You can be paid YSP only, YSP and Points or just points. Remember, every US citizen has the right let themselves be screwed by not shopping not reading their loan docs, make stupid decisions. Every business person has the write to attempt to get as much money from his clients. We don’t live in a Democracy, that’s what the people in power would like you to think – we live in a Capitolcracy who’s only conscience is money. Accept that MF and you will fair better.

    Yours truly,

    Michael Phillips W.T.F.
    michaelp@lmallp.com see us at saveyourcave.org a new site coming, and donate to livinglies.wordpress.com.

  34. Mortgage Audit, on April 14, 2009 at 7:47 am said:

    Hi Michael Phillips.

    I am sorry but I must disagree with you on the issue of the YSP.

    The TILA requires the Lender to disclose the true cost of the loan to the borrower. By failing to disclose the YSP until closing is not “full disclosure” and telling the borrower that the fee is being paid to the broker by the lender and that they do not have to worry about it is “NOT FULL DISCLOSURE.”

    Nova Star was one of those companies that made it a practice to hide this from the consumer. I know this first hand as I worked with a Nova Star broker several years ago and who informed me that all of their new brokers were taught how to do it.

    The up-sale of the interest rate causes the note payment to be higher and over the course of the loan that 1% to 8% runs into the $10,000.00 of dollars and strips the equity right out of the home.

    It is constructive fraud. Just won a case in Arkansas on Friday of this past week. We were able to get the Servicer to remove all the YSP out of the loan. We are still in litigation as we are suing the Servicer who was attempting to foreclose and as of May of 2008 they have not been able to produce the NOTE. Fannie Mae owns the note.

    I would like to see an investor come into my organization so that we can go after YSP in auto loans.

    John Dunn
    Mortgage Audits
    oliver@ipa.net

  35. MF, on March 30, 2009 at 11:50 pm said:

    Michael P,
    You said that YSP are not inducement for fraud. It can be used for a no closing cost loan, etc. What about if the buyer paid 2% to broker and broker got another 2% from lender due to YSP? wouldn’t that qualify as a RESPA violation? Just asking

  36. Michael Phillips, on March 27, 2009 at 9:46 am said:

    Dan Junk, With regard to your question about the warehouse line of credit. A warehouse line of credit is available to brokers, lenders, from lenders, and investment organizations like Bear Stearns. They (were) similar to a an unsecured line of revolving credit, except you could only use it to fund mortgages. It allowed the small lender the ability to fund and underwrite mortgages at a discount either through themselves or through brokers, where they would make a slim margin. The loan title was then registered in the lender’s name, the institution giving the line of credit (in the case of a warehouse line from Countrywide) or Waldo? You can find the last person who recorded purchasing your loan by asking a mortgage or real estate professional to contact his/her title rep and get full background information on the title.

    As for your comment that the lender had sold a fictitious loan before it was consummated, that would cause more issues for a lender than profit, as a percentage of loans do not get funded. For example, on a $400,000 loan @ 5% interest, if I draw docs on Monday, the loan is signed on Monday, I fund it Friday, the interest cost is $164. On a $400,000 I will make 2.5 points, if I am greedy I will make four and if I am naughty I will get 8 between the yield spread, points and junk fees. You’re talking $10k to $30k profit, I am not worried about $200 bucks. Besides, I could tack in on junk fees, or beat up my title guy or appraiser on price. Another factor why we could not pre-sell a loan is because the buyer has to choose to buy it based on their review, they can say no, and then I have to find a buyer it for it or carry it myself.

    As far as who owns your loan, its not the revolving line of credit that owns the loan. If the lender went bankrupt before it was sold, the trustee would sell the note and pay the money to the creditors. Believe me the creditors didn’t leave anything left. Somebody bought it.

    Hope that helps, if you have any questions, contact me at michaelp@lmallp.com or login to the soon to be saveyourcave.org, a broker’s non-profit site

  37. Dan Junk, on March 16, 2009 at 2:26 am said:

    Warehouse Line of Credit.

    Can you elaborate for us on how these work and whether they are the true source of funding the loan? From what I have been reading, it seems these are the vehicles that allow the broker or originator to sell the loan prior to closing. As I understand it, the loan is paid for by the WLC and sold be the originator in advance of the closing and he originator pays fees only for the time the loan remains on the WLC entity’s books. many times it allows for the sale of the loan into the secondary market even before closing and allow the originator/broker to perform the transaction as an off balance sheet transaction.

    Is this correct?

    What in your opinion is the result of a loan being originated through such a process/vehicle where the originator then files bankruptcy and lists the WLC as a non-priority, unsecured creditor (and the amount listed exceeds $1B)? Is there a way to find out whether an individual note is a part of that unsecured creditor amount listed?

  38. Michael Phillips, on March 12, 2009 at 4:49 pm said:

    Yeild spread premiums can be paid on virtually every loan except in a couple of states. They are not an inducement for fraud. YSP’s are one way for broker compensation, the other is points paid by the borrower. A ysp increases the interest rate. I could do a loan with no points, no fees increase the interest rate and ysp and pay the closing costs out of my YSP. For example in the reverse a customer can pay points and buy down the interest rate. In both cases it is better for the borrower to get a no points no fees loan. The reason why is if you take your origination fees closing costs or buy down points as an investment-they don’t pay off.

    Also many times on cash out refinancing the borrower did not have equity for broker fees and closing costs.

    However, like in many cases a similar scenario would give a lender a higher YSP, maxing the ysp by increasing the interest rate, giving a person a fulling adjustable MTA ARM.

    YSP’s are not inherently bad. The Lender gets a YSP when he sells the note on the secondary market – that’s how its done.

    Michaelp@lmallp.com

  39. George, on March 4, 2009 at 10:10 pm said:

    There is indeed another mers-type entity as described in another posting, Virtual Mortgage Services, updated 3/4/09, the main item I noticed is that they operate in each and every state in the US, and that “yield spread premiums are’t disclosed”. Perhaps someone can explain the ramifications of that statement and that entity. I understand that yield spread premiums are paid to the mortgage broker for steering borrowers into higher-priced or more profitable loans, and as such, are illegal as a breach of the brokers’ fiduciary duty to the borrower. Well then what the…?

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