“special servicing” fees

FROM A READER IN COLORADO ANSWERING “ANONYMOUS”

You raise a good point as to the servicer keep all the payments. As it has been proven in the two WAMU cases I have, the servicer(JPM not Chase Home Finance) is compelling the action under a bogus POA for the trustee. The trustee does not have control if the operation as the PSA has always shown the servicer was responsible for the foreclosure.

That however is the crux of the issue. The certificate holders put up money to gain an income stream although they thought they were backed by the notes which were never deposited. This scam was different than typical bank bond holder deals that were present before this mess started.

The servicer is in control of the “limited” replacement loans that need to go into the trust if one or two loans default but once the pool is shown to be failing the status is void and the default swap pays in to cover the “event”

I would say that the default swaps may have been multiple and created to cover multiple things. One swap may cover the income stream which is why the trusts still exist and the other covers the principle balance which under REMIC is not allowed to be placed back into the trust mid stream. This leaves the servicer and master servicer in control of it all.

The master servicer controls the REO and the Payout from the default swap covering the principle balance effectively holding the total balance of the top tier certificates and the REO valued at maybe 50%. Since they are prohibited from depositing the money back to allow the certificate holders to recoup their money under the IRS code they reinvest it most likely in buying the certificates that are valued at 5 cents on the dollar from the holders that got screwed.

This will lead to a huge windfall when they weather the storm with the tax payer money such as TALF which is so much more than the TARP money and effectively allows the banks to pledge the top level junk they hold for real time cash.

The trusts stay open as they are trying to bridge over the issue and play the inevitable boom bust history they have made us live in forever. The income stream comes from a separate swap that keeps the dividends paying but the value is shot to nothing making the bond holders want to sell and get out and the bank uses their money owed to buy them out and screw them another time.

The servicer is then charging “special servicing” fees at a huge rate while body dragging the homeowners intentionally inflicting emotional distress so they want to walk away. This helps break their spirit and helps eat up the payments that are coming in that they pocket since the dividends are paid from the other swap contract.

The servicer is the key as they have always and will always control everything and the homeowner gets intentionally abused and the investor has no clue. They want everyone to bailout and walk away from the houses and the investments because they have a plan to use that to make another round of huge bonuses. This is why they value the fraudulent loans at nothing because they are yet the real value of what is being laundered is the servicing rights and the collection of the REO.

Lender Processing Services was funded in 2008 by JP and BoA so that they could perpetuate the fraud of collecting zeroed out loans and now the big law firms that receive the f/c files are going public set to retain huge pools of mortgage notes and continue the game.

If anyone can say that this problem is happenstance and not premeditated racketeering at its most egregious I would say they are certainly fit to be judges or negative bloggers. The entire “foreclosure industry” was planned from the start in the late nineties and this is just part of the cycle they expect us to sit through. It is too well planned with the legislature passing all the little changes in law in preparation.

Conspiracy theory or real conspiracy coming to fruition? I know where I stand.

I created a coin phrase for this….compartmentalized fraud which goes well with plausible deniability and this cannot happen without a master mind that lays out the plan….who might that be?

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