LITIGATION SUPPORTOur forensic loan audit will enhance the ability of Attorneys seeking to obtain mortgage relief for their clients. Faced with a report that exposes violations, many lenders will choose to modify the borrower's loan, rather than the alternatives of foreclosure, litigation and possible federal fines. Under such circumstances, loan modification is the most economical choice.Unlike most other auditing firms we don’t limit our work to TILA and RESPA violations because in order to achieve the best possible outcome for your client you must arrive at the battlefield armed with every weapon available under the sun and with guns drawn ready for combat. Although the TILA’s right of rescission is one of the most powerful tools when defending a foreclosure suit in a judicial state, since most borrowers are unable to tender the principal amount as required by this statute, ability to rescind under the TILA is extremely rare and improbable. We examine evidence relating to each event surrounding the transaction such as the marketing material sent to borrower, initial interview with loan officer, preliminary federal and state disclosures, broker fee agreement disclosing YSP, appraisal report and the final settlement in addition to evaluating borrowers ability to repay the loan in light of industry practices and accepted guidelines. Over reaching mortgage transactions can at times be challenged under state unfair and deceptive acts and practices (UDAP) law. Broker misconduct and yield spread premium, without proper disclosure, may violate a UDAP statute. Transactions with lenders and/or brokers who are not licensed, but should be, may be void. It may be a UDAP violation for a lender to do business with an unlicensed broker. Most UDAP statutes provide for some combination of actual damages, statutory damages, multiple damages, attorney fees and costs, and some states, punitive damages. Under HUD’s two part test, even if disclosed, we may still be able to challenge the YSP paid to broker outside of closing, which resulted in a higher rate for the borrower. Post Closing Securitization/Standing AuditWe carefully examine all documents including the Note, Mortgage/DOT, Mortgage/DOT Assignment, Note Endorsement/Allonge, Notice of Default and the Pooling and Servicing Agreement to determine the identity of all parties involved in the chain of securitization and their respective interests in the Note and Mortgage.Once settlement occurs the Note and Mortgage are normally transferred to a document custodian (e.g. Wells Fargo), while numerous book entries record their movement through the securitization chain which normally begins with the Originator (e.g. Mason Mortgage) who then sells them to an Aggregator (e.g. Countrywide Home Loans) who then sells them with a thousand other loans to a Depositor (e.g. Asset Securities Inc.) who then deposits them with a Trustee (e.g Wells Fargo) for the benefit of the Securitization Trust (e.g Asset Securities Trust IV– 2003-988/03174) which issues securities backed with the pool of mortgages (MBS). The trustee also selects a Servicer (e.g Countrywide Home Loans) to collect borrower payments and process foreclosures/short sales on behalf of the investors who own the MBS. When there is a default and in order to effectuate foreclosure, the Servicer asks the document custodian for the collateral file that pursuant to the PSA should contain the original Note indorsed by the Originator (e.g. Mason Mortgage), usually in blank thereby converting it in to a bearer instrument, and the Mortgage/DOT with an executed assignment either already recorded or in recordable form. Usually this is where everything can fall apart for the secured party attempting to foreclose and where the best defense opportunities may be uncovered by a skilled examiner. Below are some of the questions we ask when examining the mortgage file: 1. Was the execution of the Mortgage/DOT by the borrower properly witnessed and acknowledged? 2. Was the Note legally negotiated and formally transferred from the Originator to the Aggregator, from the Aggregator to the Depositor and from the Depositor to the Trustee? 3. Was the Note indorsed by an authorized agent of its holder before each transfer? 4. Is the endorsement evidenced by an Allonge while there is room for an Indorsement on the original Note? 5. Was the Note negotiated to its current holder prior to the date of default? 6. Did the Mortgage travel with the Note through the chain of securitization? 7. Is the Mortgage held by MERS? 8. Has the Mortgage assignment been properly recorded? 9. Was the Mortgage and Note assigned to the Trustee by MERS? 10. Was MERS authorized or allowed to assign the Mortgage? 11. Who signed the assignment on behalf of MERS? Fore a more detailed analysis of various foreclosure defense strategies see this post. Give us a call at 1-800-564-2764 for more details on how we can help you prepare for battle. |
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