Another Strategy to Own Your Loan: Allocation of Third Party Payments to Your Loan Account

I’m told by some industry insiders that you can buy a piece of our loan for pennies on the dollar, much the same as NPR did when they wanted to track the money and documents through the securitization structure. That’s a good goal because it will give you “inside information” on what the pretender lenders SAY happened to your loan.

But it doesn’t give you the real facts and events because the paperwork was prepared, executed and delivered long before the loans were originated. If a Judge thinks that you are nit-picking and that the issues you raise are issues between creditors, it is because he mistakenly presumes that the transaction started with the origination of the loan. In fact, the transaction commenced BEFORE the origination of the loan with the execution of the securitization documents, without which nobody would have any loans and nobody would have made any money.

By re-orienting the Judge to the point that the documentation for the origination of the loan was WITHIN THE CONTEXT, CONDITIONS AND PROVISIONS OF THE SECURITIZATION DOCUMENTS, you will (a) be telling the truth and (b) bringing the case closer to a result that are seeking — that without the pretender lender PROVING its case in a judicial proceeding, the election of non-judicial sale is unavailable.

One way to have the goods before your opposition has them is to buy, through a broker, a mortgage backed security that is based on a pool of assets and tranches, one of which is your own loan.

As an MBS owner you have every right to demand information about the rest of the owners and the status of the pool. One of the dirty little secrets is that a lot of pools have been closed out and dissolved which means that the party claiming to be the “trustee” for the SPV pool is claiming powers to represent an entity that no longer exists with investors who no longer are holders of MBS.

You can even ask whether any of the parties in the securitization chain or their agents, servants, employees, underwriters, affiliates ever received third party payments on “toxic” mortgages or mortgage backed securities or pools of assets in which a high percentage consists of loans that are non-performing, or on the representation that the receiver (usually the investment banking house or some subsidiary or affiliate).

As a holder of the mortgage backed securities you ask why the distribution reports did not include an allocation third party insurance, counterpart y or Federal money to your pool of assets and why the there was no allocation to individual loans in that pool. You can ask why they did not allocate those third party payments to the loans that were non-performing, which might include yours.

You can also ask whether such allocation to the pool and then to the individual loans in the pool and then to the nonperforming loans, has been applied to the obligation owed to the you as an investor. You should ask whether these third party payments are applied to the balance owed to you as an MBS owner, or whether it should be applied to payments that have been reduced or missed. And finally you should ask whether the third party payments would, if properly applied, make your payments, as an MBS owner, current or if they would still be behind. If behind, then how much behind and where did the rest of the money go? If ahead, then there is no longer any default to you as MBS owner.

Remember that the answer you are going to get (after stone-walling) is going to be a total of all such payments, since they never made any allocation. So your central question is how much did they get in third party payments and when. It is then up to you to decide on the proper with the help of an accountant familiar with generally accepted accounting principles.

You the  take the report of your accountant, your expert, and your forensic analyst and attach it to a pleading in which you “intervene” as the “real creditor” and state that the loan (a) was never in default because the MBS holders got their money that was due including a profit and/or (b) that the default was not in the amount as represented and that you, as creditor, would like to work out an arrangements with the debtor (you) in which you will (a) disclose the identity of the other creditors (b) disclose the true balance of the obligation after the above allocation (c) remove the predatory aspects of the loan, including the loss from appraisal fraud and (d) arrive at a thirty year fixed payment starting thirty days after the second closing at market rates for top tier debtors on the newly disclosed principal balance reduced by all relevant factors.

It’s all about transparency, truth ,justice and the American way.

Tags: accountant, allocation to the pool, appraisal fraud, default, expert, forensic analyst, generally accepted accounting principles, individual loans in the pool, MBS holders, SECURITIZATION DOCUMENTS, third party payments, true balance of the obligation
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