ATTN: PENSION FUNDS: Where does the money go when the trusts “liquidate” the homes in REO?

Posted by L

Here are two interesting examples:

EXAMPLE ONE:

One is a $420K loan in Lee County, FL that went into foreclosure, Wells Fargo as Trustee for Option One Mortgage Loan Trust 2007-CP1.  The property went back to the trust at foreclosure auction.  Then the sale was reversed per request of the Plaintiff “Wells Fargo as Trustee”.  Apparently the trust was not notified of the reversal.  (Is there any way for these trusts to account for a reversed sale?)   Under the impression that the trust owned the home, it was then sold to a couple who is now mired in a legal nightmare.  They paid $154K cash for the home PLUS $80K in upgrades & repairs.  Story here & here.

I looked at the investor report where the sale was accounted for.  Where did the $154K go?   Has anyone seen this issue discussed or litigated?

Here is the section of the report dated Dec 27, 2010, where the cumulative realized loss is $437,885.98 (almost $18K MORE than the original balance of the loan).

 

Assignment of mortgage on this one was done by (LPS) Topeka Love…

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EXAMPLE TWO

Example number two is especially interesting since it comes from a loan that is in the tranche of a trust that is of the FHFA v BoA lawsuit.  It was supposed to be conveyed into Banc of America Funding Corp (BAF) 2005-SALT1F

THE FHFA v BoA LAWSUIT:
STALT 2005-1F 4A1 SunTrust Asset
Funding, LLC
BOA Funding BOA Securities
Group 4

ONE LOAN FROM GROUP 4 – EXAMPLE  Loan # 34829150

Originated 11/23/2005 for $162,4000 (supposedly at an 80% Loan to Value) on a Delray Beach , FL property.

It’s very confusing to figure out what happens to these loans.  The 2010 investor reports state that the loan went into foreclosure in April 2009, which is not true.  It went into foreclosure in Sept 2009  docket.  The trust, marking a “liquidation date” of 9/30/10, booked a “cumulative realized loss” on the Oct 2010 investor report of$150,819.43.   The property was not sold to a third buyer until March 2011 for $35K.  The foreclosure lawsuit was withdrawn in Feb 2011.  The property is now assessed by the country tax appraiser as worth $41K here.      Where did the $35K go?  How was the cumulative loss calculated?  To whom was the loan sold out of the trust in Sept 2010?   The mortgage has not been released or satisfied per the public records.

 

These are not isolated incidents…

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