No Default The Servicer is making the payments !!!

30 Apr

In the sercuritization game there are many co-obligors and you may not be in default after all. In the pooling agreement the servicer must agree to advance payment in the event of a missed payment by debtor.

Who is the obligor? Is there a default? Remember – this is financial engineering at its best. This is the American way to be creative and inventful. These guys are so good that homeowners can stop paying their loan and the creditors get paid anyway. They just forgot to tell the homeowners – and the courts. Some people call this forgetfulness fraud upon the court.

When they added the loans into the pool they attached numerous conditions to them. What might some of those conditions be? One of them is a condition for the servicer (making them an obligor). If the servicer doesn’t receive the homeowners payment, they MUST advance the payment (principal and interest) to keep the flow of revenue to the creditors (read this in the SEC filings). Don’t believe me? Think it can’t be proven? Read on …

The following is in regards to the IndyMac INDX 2005-AR7 trust …

Let’s look at the April 2010 loan level files. Look at the these specific fields (for loan #120600243):

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
523275.38 939.51 0 0 522335.87 939.51 2956.3 0.04625 2016.79 0.00375 163.52 0.0425 1853.27 0.000055 2.4 0 0 165.92 0.0424451 1850.87

Now look at the March 2010 loan level files. Look at these same specific fields (again for loan #120600243).

BEGINNING BALANCE SCHEDULED PRINCIPAL CURTAILMENTS PAYOFFS NEGATIVE AMORTIZATION ENDING BALANCE TOTAL PRINCIPAL SCHEDULED PAYMENT RELATED INDEX RATE NOTE RATE SCHEDULED INTEREST SERVICING FEE RATE SERVICING FEES NET RATE NET INTEREST TRUSTEE FEE RATE TRUSTEE FEES LPMI FEES OTHER FEES TOTAL FEES INVESTOR RATE TOTAL PTR INTEREST
524211.28 935.9 0 0 523275.38 935.9 2956.3 0.04625 2020.4 0.00375 163.82 0.0425 1856.58 0.000055 2.4 0 0 166.22 0.042445 1854.18

(Note the ending balance for March 2010 is 523275.38 – how come the balance is going DOWN?). On the March 2010 loan level files the servicer is also reporting the account is 90+ days delinquent. The homeowner is not and has not been making payments.

Beginning balance is 523,275.38 and ending balance is 522,335.87!!!

Scheduled Principal is 939.51 and the total principal is 939.51

523,275.38 – 939.51 = 522,335.87 (they show the principle has been reduced!)

Scheduled payment is 2956.30

Scheduled Interest is 2016.79 and net interest is 1853.27

939.51 + 2016.79 = 2956.30 (the scheduled payment)

Servicing fee = 163.52

2016.79 – 163.52 = 1853.27 (net interest)

Total PTR Interest is 1850.87 (Trustee fee is 2.40 so 1850.87 + 2.40 = 1853.27 which is the net interest)

The reason they have to ADVANCE the fees is because the fees are still paid and (apparently) come out of the interest portion of the payment.

This homeowner “might” owe the money to somebody, but not the creditor as the creditor has received the payment in full. Remember – this is a STATEMENT to the investors describing what they were PAID. The party foreclosing is not entitled to power of sale as they are not the creditor. The creditor has received all payments and the homeowner has not defaulted.

The method used seems to be inconsistent between deals. I checked for another homeowner in another IndyMac Trust (IndyMac RAST 2007-A5) and the homeowner had interest only payments (so the principal didn’t go down) however, the interest looks like it is being paid. For other homeowners in this deal they are using the “curtailment” field and the ending principal balance is RISING.

This is just the statement to the certifiateholders. You can BET the sub-servicer and the master servicer are keeping full accounting records that they are NOT reporting to the homeowner, the investors or the courts.

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2 Responses to “No Default The Servicer is making the payments !!!”

  1. MARIO KENNY April 30, 2010 at 8:11 am #

    This is why I send this letter to my trustee

    Name of Homeowner: your name
    Property Address:
    Loan #:
    Social Security #:
    OCC File #
    OTS File #
    HUD File #

    Dear Trustee,

    I am in receipt of Foreclosure CASE NO.: 000000000 dated insert date here .

    I hereby object to e Notice and request that you send a copy of this letter to your insurance carrier all other interested parties as described herein for the following reasons:

    1. There is no delinquency or default. The Lender has been paid in full plus a fee for standing in or an undisclosed third party lender that was not properly registered or regulated as a financial institution or lender at the time the transaction took place.

    2. The Lender as failed to state the name or address of the holder in due course, John Does 1 1000, being the holders of certificates of asset backed securities, which are backed by the security instrument (mortgage) on the subject residential property.

    3. The Lender does not own, possess or control the note or the mortgage, which has been satisfied in full. Demand is herewith made for satisfaction of mortgage to be filed in the appropriate county records.

    4. Your authority as Trustee has also been transferred to the Trustee of the pooled mortgages holder notes on various properties, real and personal, that were included in asset pooled that was eventually securitized and sold to investors, who along with others in the chain of securitization acquired rights and obligations t the note, mortgage, and stream of revenue eventually due to the investor.

    5. Because of the known presence of necessary and indispensable parties to any dispute that the true holders in due course might have against me, only a judicial proceeding in which all parties are included will provide a fair determination of the rights, obligation and title to the property, mortgage and note.

    6. The “loan closing” was in fact a scheme to trick me into issuing a negotiable instrument that was pre-sold to investors as an unregulated security. The parties and their fees were not revealed nor was the true APR disclosed, as it was inflated considerably by the intentional overstatement of the appraisal on the property.

    7. The title agent, which might well be the same as the trustee also has insurance for errors and missions and the title insurance company that issued the policy will have total liability for this fraudulent transaction, to the extent it had knowledge through its agents of the fraudulent scheme.

    The totality of the transaction violates numerous state and federal laws including, but not limited too, usury, truth in lending, deceptive business practices, administrative standards for the practice of professions, the fair credit reporting act, the fair debt collections practices act and other stated black letter laws.

    Therefore, please confirm the filing and recording of the satisfaction of mortgage, send the original note back to me (or tell me where it is), and confirm the retraction of the attempt to collect debt which is incorrectly stated, improperly computed, improperly obtained, and frequently produced and transmitted.

    IF THIS TRANSACTION IS OR WAS COVERED UNDER ERRORS AND OMISSIONS INSURANCE OR INDEMNIFICATION OR INVESTOR INSURANCE OR COLLATERAL GUARANTEES OR TRANCHE ASSURANCE IN A SECURITIZED TRANSACTION (SALE OF ASSET BACKED SECURITY WITH ONE OR MULTIPLE TRANCHES) THESE MUST BE DISCLOSED TO THE UNDERSIGNED your name AND A COPY OF THIS LETTER MUST BE SENT TO ALL PARTIES WHO HAVE ACTUAL OR POTENTIAL LIABILITY, INSURANCE OR RIGHTS OF INDEMNIFICATION.

    With kind regards,

    Your name
    http://www.mariokenny.wordpress.com

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