So talk about splitting hairs — here is a statement from a company that is claimed by third parties to be the servicer of a “loan.” Note that the parties making the claim do NOT swear that PennyMac is servicing claims to administer, collect and enforce for them, but rather for some unknown creditor or some other entity that does NOT make such a claim. Think about that. Here is the quote:
PennyMac, who, as the loan servicer, is authorized to accept payments for your loan.
And here is the analysis of that statement:
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PennyMac IS authorized, although not by anyone who is legally entitled to act as grantor in such authorization.
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And it is authorized to accept payments — but it doesn’t. And nobody who does “accept” payments is working for PennyMac. PennyMac is not a FINTECH, Lockbox, or processing center for payments made by homeowners nor the recipient or processing centers for the money proceeds from foreclosure sales or sales of REO property.
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And notice that it says “accept” payments rather than “receive” payments. I can be authorized to accept your payment but unless I actually receive it my authorization, even if valid, is irrelevant and lacks foundation.
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And so if you make a payment and direct it to me at an address that is a mail processing center that sends the payments for processing at a lockbox or FINTECH company, the accounting for those receipts can only be performed by people who in their ordinary course of business actually collect and account for receipts.
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The “Payment History” proffered in the name of such a “servicer” for the payment is also irrelevant and lacks foundation. They’re merely producing a report generated by someone else.
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In addition, the Payment History proffered in court is not an acceptable or legally admissible substitute for the ledger showing the loan account receivable (see below).
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This Payment History from such a servicer is neither acceptable evidence or admissible evidence of payments nor of the balance of the loan account receivable owed to a specific creditor who paid value for the underlying obligation.
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The Payment History could only be admitted into evidence if there was live testimony from someone with personal knowledge of the ordinary course of business of the company that entered the data and reproduced the report — keeping in mind that this does not include the company named or claimed to be the “servicer.”
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But the failure to make such objections and challenges invariably results in admission of the report into evidence, which in turn, establishes the existence of the loan account receivable, the right of the servicer to account for the payment history, establish the default etc.
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PennyMac IS a “loan servicer” only because the regulations were meant to include anyone who participates in the administration, collection of enforcement of claims arising from alleged loan accounts. But if the loan accounts don’t exist, then they are not a loan servicer under any construction of the term.
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And notice they don’t actually say what would ordinarily be said by either the loan officer as a lender or the officer in charge of administration, collection or enforcement of a loan at a servicer who receives, processes accounts for and disburses funds to creditors, i.e.,
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“You have a loan account receivable arising from your transaction on the __ day of ___, 20__. XYZ has acquired all rights, title and interest to the underlying obligation. the legal debt, note and recorded mortgage.
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By law, you owe XYZ that money.
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We have been appointed to serve the interests of XYZ and empowered by XYZ to administer, collect and enforce the right to collect payments of interest and principal as provided by your promissory note and the recorded mortgage.
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A copy of that authorization, signed by an authorized officer of XYZ is attached or has already been provided to you.
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Attached is a copy of the XYZ ledger on which your loan account appears showing the balance, payments, and disbursements from inception to the present.”
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YOU WILL HEVER, EVER SEE SUCH A LETTER OR STATEMENT NOW — BUT THIS WORDING IS TAKEN FROM HUNDREDS OF EXEMPLARS DATING BACK TO THE EARLY 1990s AND EARLIER.
- Why don’t they say that — especially when they used to say it and that wording was literally invented by the financial industry? The answer is very simple., they don’t say because they can’t say it without exposing themselves to criminal and civil liability.
- But they can imply it or have their lawyers argue false factual and legal premises in court with immunity. What is the fix for this gigantic scam? It would be the government doing its job which after over 20 years is a lost cause.
- That means that homeowners need to invest their time, money, and energy into defeating these false foreclosure claims. And that generally means that groups of homeowners must come up with a way to finance the challenge for each individual homeowner.
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NOTE: It is unlikely that anyone without legal training will understand the legal significance of the points raised in this article. The obvious answer is to show it to your lawyer.
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 12 years or more.
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