THE TRANSFERRING OF SERVICING RIGHTS TO AVOID REVIEWING COMPLETE MODIFICATION APPLICATION

Posted on September 15, 2017 by Neil Garfield

 

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To listen to Patricia Rodriguez discuss the latest foreclosure defense issues please visit the Neil Garfield Show here and here.

By Patricia Rodriguez, Esq.

Nothing in this article is meant to be construed as legal advice; there is no attorney-client relationship that is being created. This is for general education purposes only. 

After years of litigating against alleged lenders, investors, servicers, and foreclosure trustee’s we are starting to see a clear trend of the servicing rights being transferred upon receiving a complete loan modification application. What is an alleged lender – this is usually the party that claims to have funded the original loan or the originator.

The alleged investors are those who claim to have received an ownership interest in the loan through an assignment and endorsements or multiple assignments and endorsements. The foreclosure trustee in non-judicial foreclosure states such as California are entrusted with overseeing the foreclosure process. The servicers are entities that claim a right to collect payments, modify the loan, etc. as agents of the principals (lender or investor). The servicer’s, through an agreement with these other entities, claim to have the right to enforce the note on behalf of the principal (lender or investor).

The servicer can start as one entity in the Deed of Trust and be changed by a simple letter from the original servicer to the borrower advising them that there is a new servicer. The borrower typically has agreed to such in the Deed of Trust. It is generally this servicer that the borrower or the borrower’s representative is negotiating with in order to conduct a short sale, short pay, cash for keys settlement, reinstatement, forbearance, and/or modification. The servicer could stay the same the life of the loan or switch anywhere from 1 to 10 times.

Each time the servicer changes the new servicer is obligated to credit the borrower’s account with all prior payments, honor any pending offers (for a short sale, short pay, settlement, reinstatement, forbearance, and/or modification), and continue to review any pending complete applications for a short sale, short pay, etc. However, many times this is why servicer changes are made so that the new servicer can claim they will not honor an offer to short sale, short pay, etc. or to state that the new servicer never received the complete package.

The above scenario will at most times be actionable; meaning this is something that is a cause of action. There is an obligation on the part of the new servicer to honor offers and pending complete applications, otherwise, it is a breach of contract- among other claims. In addition, to there being an obligation on the part of the servicer to honor offers and pending complete applications, the homeowner needs to make sure that the servicer’s failure to do such caused you or the party you are representing harm (damages).

MAKING HOMES AFFORDABLE – HAMP & HARP ARE GONE

Making homes affordable is an official program of the United States Department of Treasury and the United States Department of Housing and Urban Development.  HAMP and HARP were government funded programs in existence until December 31, 2016. As of December 31, 2016, the programs no longer exist as there was a sunset statute. These two programs were designed to help struggling borrower’s who could no longer afford their mortgages to modify their loan under specific government guidelines. Now that these government programs have ended that does not mean modifications will end.

“As far as the consumer financial protection bureau (CFPB) and Mark Mc Ardle, deputy secretary for the Office of Financial Stability is concerned ‘the economy is still not back on track and may take much more time while many homeowners are struggling, they still are having a difficult time making  their mortgage payments. The CFPB has issued non-binding guidelines based on proven principles and protocols. Based on NPV (net present value); with this foundation the CFPB has stated principle goals for financial institutions to follow when dealing with at- risk homeowners including affordability, accessibility, sustainability and transparency.  The overall goal is to prevent “avoidable foreclosures” and offer a win-win situation for investors and homeowners.'” David Smith

There are still government sponsored programs to help struggling homeowners such as the hardest hit funds that reaches eighteen states. It is Keeping Your Home California for the state of California and offers funds to help with a portion of the arrears for reinstatement or modification. Additionally, the Making Homes Affordable website still has a vast amount of information contained on it; especially, if you are already in a HAMP trial or permanent modification.

Contact Attorney Patricia Rodriguez:

Patricia Rodriguez, Esq.

Lead Attorney/Chief Executive Officer

http://attorneyprod.com

Rodriguez Law Group, Inc.

 

1492 West Colorado Boulevard | Suite 120

Pasadena, CA 91105

phone: (626) 888-5206

fax: (626) 282-0522

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The Neil Garfield Show with Attorney Charles Marshall: What areas should you target when you litigate?

Posted on June 29, 2017 by Neil Garfield

Thursdays LIVE! Click in to the The Neil Garfield Show

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

What areas should you target when you litigate?

In foreclosure litigation there are many pointless rabbit-holes an attorney or homeowner can attempt to go down, but they serve only to confuse and distract.  Instead, litigants should focus on areas where actual leverage can be obtained.  Neil Garfield has warned litigants not to focus on the lender’s vulnerabilities that are not provable.

Recently Neil Garfield held a consultation with an attorney who requested advice on how to deal with two defective instruments.  His advice to the attorney was to cancel two instruments:

(1) as assignment allegedly signed by an authorized person from MERS as nominee for BNC Mortgage which had ceased to exist 3 years earlier. (2) appointment of substitute trustee by the assignee of the void assignment. The lender was handicapped by the cancellation of these instruments.

Despite all of the fraud and fabrication that continues, it is the bias of the courts which has created an uneven playing field that prejudices homeowners.  Therefore homeowners must obtain meaningful discovery related to standing and questionable transfers.  This should be done by examining the chain of title, a forensic examination of the note, trust closing date, and other violations of law by the servicers.  We also recommend that you hire an experienced investigator upfront to root out any major discrepancies that will be beneficial later in litigation (we recommend Bill Paatalo at http://www.bpinvestigativeagency.com).

In order to get something tangible that can be used to leverage your case consider strategic depositions of the pawns the servicer uses to verify ownership. The person signing off on the certification of note possession who files an affidavit claiming the servicer has standing to foreclose is vulnerable because they possess limited knowledge about the actual creditor, movement of the note and have no personal knowledge.

If you spoke with the Master Servicer or Trustee of a mortgage-backed trust they would tell you they don’t own anything and they are only a reporting agent.  They would direct you to the loan servicer for anything related to the loan.  The Servicer actually hired the foreclosure mill law firm to file the foreclosure – and is engaged in camouflaged equitable subrogation.

Foreclosure occurs because fraudster servicers routinely create a MERS assignment of mortgage coupled with a fraudulent note, add an undated stamp on a blank page of a note or allonge and create standing where none exists.  Add a corporate witness who knows nothing about the loan’s movement and boarding process, and the fact they are trained to parrot words like, “normal course of business” or “policy and procedure”– and the court will rule in their favor if not challenged.

Even worse, there is a new foreclosure platform that has morphed into a business model where new servicing companies who have nothing to do with the loan are being created out of thin air (think SPS or Ocwen) claiming they are the servicer for a bogus trust and the court requires NO INQUIRY INTO THE PURPORTED TRUST AT ALL!  The court accepts the validity of the trust without proof despite state requirements for a trust to conduct business in the state and be registered.

In order to gain traction you should depose:

  • The Complaint Verifier
  • Certification of Possession of Note Witness
  • Affidavit in Support of Summary Judgment Signers
  • Asset Manager/Trustee/Master Servicer of a Plaintiff Named Trust

Depose the corporate witnesses for trial and subpoena dues tecum the “policy and procedure” manuals, loan transfer histories and any deposition they intend to rely on.  Anticipate heavy resistance but remember if they don’t turn over the necessary documents those claims must be excluded from testimony.

Southern California attorney Charles Marshall advises homeowners to remember that in judicial foreclosure states where typically the borrower is the defendant, counterclaims or cross-complaints can sometimes be used to bring the legal pleading approach described.

In order to prevail in discovery, motions to compel discovery, summary judgment and at trial, you will need an attorney who can litigate like a mad dog and who is not afraid to become a Country Club pariah.  At the end of the day this is about verbal and evidential combat.

This article and the radio show are for educational purposes only and are not legal advice.

Charles Marshall, Esq.

Law Office of Charles T. Marshall

415 Laurel St., #405

San Diego, CA 92101

cmarshall@marshallestatelaw.com

Phone 619.807.2628

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