Michael Olenick: How Servicers Lie to Mortgage Investors About Losses
By Michael Olenick, creator of FindtheFraud, a crowd sourced foreclosure document review system (still in alpha). You can follow him on Twitter at @michael_olenick or read his blog, Seeing Through Data
A post last week reviewed a botched foreclosure for a mortgage loan in Ace Securities Home Equity Loan Trust 2007-HE4 dismissed with prejudice, meaning that the foreclosure cannot be refilled; a total loss for investors. Next, we reviewed why the trust has not yet recorded the loss despite the six month old verdict.
As an experiment, I gave my six year-old daughter four quarters. She just learned how to add coins so this pleased her. Then I told her I would take some number of quarters back, and asked her how many I should take. Her first response was one – smart kid – then she changed her mind to two, because we’d each have two and that’s the most “fair.” Having mastered the notion of loss mitigation and fairness, and because it’s not nice to torture six year-old children with experiments in economics, I allowed her to keep all four.
When presented with a similar question – whether to take a partial loss via a short-sale or principal reduction, or whether to take a larger loss through foreclosure – the servicers of ACE2007-HE4 repeatedly opt for the larger losses. While the dismissal with prejudice for the Guerrero house is an unusual, the enormous write-off it comes with through failure to mitigate a breach – to keep overall damages as low as possible – is common. When we look more closely at the trust, we see the servicer again and again, either through self-dealing or laziness, taking actions that increase losses to investors. And this occurs even though the contract that created the securitization, a pooling and servicing agreement, requires the servicer to service the loans in the best interest of the investors.
Rest here…
~
Does any one have info on the chapter 11 that GMAC and its many companies have filed? How is it affecting your foreclosure? Did you know that they, the servicers/banks are listed as the debtors and NOT the creditors? That it is the homeowners that are listed as the creditors on their balance sheets etc? And can participate in the bankruptcy? This they dont want you to know!!!!
it does absolutely nothing to call them on anything! it isn’t a matter of not wanting to try too hold them accountable, it is a matter of they hold all of the cards! the Government protects all with the exception of the homeowners/investors the banks are paid back and still we hear how much this is costing everyone! This is all old news! SOS nothing changes! only a few winners, two whistle blowers, one on robo signing and two on appraisals! the homeowners just have lost it all, a few lucky ones that still have a job have been able too move on! many not so fortunate
lies is all they tell says:
June 11, 2012 at 5:45 PM
well of course Faith, have to keep us down and keep them growing. aslong as they continue to own congress they will continue to keep contributing. think of this tidbit i learned researching my foreclosure. wells fargo states fnm is my investor who is in government recievorship right? i read in a ILLINOis bankeer association meeting that fnm never assigns mortgages. not even before fore closure. we can go over a few possibilites.
when the mortgages are sold to an investor the original promissory note becomes null and void it is no longer a negotiable instrument. it become non-negotiable instrument. now think about it if they assign a note of a null and void note it is fraud on the court right? but how can they fraud themselves???? strange thought. now take wells fargo, chase, BOA, they file assignments not when they should before the trust closes if it is even in a trust but a few days before foreclosure or even after the foreclosure is filed. they dont care at least 90% of the homeowners think the bank still owns their mortgage and walk away or try to negotiate a modification. lied to told to default, denied a modification and foreclosed on by the dual track. i wonder if there is back door agreement with fnm and fdnc that when the back receives the CDS insurance and sell the home they get a %???? athought any way you have to think
PLEASE CORRECT ME I AM WRONG
PLEASE HOW DO WE GET THIS OUT TO THE PUBLIC EVERYONE IS AT RISK
They took us and the investors no change of pace SSDD and will continue to do so because we the people allow them to.When ALL people stand up to fight this then it will change.Till then ,not happening.Everyone has to be on the same page to bring this about.Not all people want to be involved with this.Enough said.
It should bequite obvious way the wanyt to foreclose over other options. If you have securitized the loans numerous times to may different parties, it would be very difficult to have to make all those parties whole when you con is discovered. So as in the movie, “The Producers”, you want to make the venture fail and tell everyone it wasn’t your fault. You foreclose. No one asks any question because the loan went bad. You collect from the government, default swaps, sale of the property, you name it, and no one is the wiser. Perfect ponzi of all times, until people get wise and call them on it. It only works when you control the courts and the government regulators, which so far seems to be the case.