The Law Office of Carol A. Molloy

EDITOR’S COMMENT: While I commend the reporting and the acts by Judges, lawyers and government officials, they still don’t “get it.” The presumption is that the homeowner owes the money that the servicer says is due. That is a lie. Thus the assertion that the homeowner is in default is also a lie and so is the amount claimed as due in principal. They continue to ignore that this was NOT a transaction between the borrower and the loan originator. It was a transaction between the homeowner and a remote undisclosed lender who had no connection with the loan originator.

In between the these two real parties in interest were multiple players who assumed liabilities they never intended to pay and who assert claims to which they are entitled to nothing. Dozens of terms, conditions, parties and counterparties were added to the transaction between the homeowner and the investor. To cover their tracks these parties did pay some of the time and in some cases paid everything due to the lender, thus extinguishing the original transaction and maybe giving rise to a new obligation — but in most cases they waived subrogation and do not have any new asset or obligation in exchange for what they paid. They did this because they were being paid ridiculously high fees to look the other way.

These payments are presently allocated to NOT the lenders’ accounts (for the investor lawsuits), not allocated to the obligation owed to the lender, and not allocated to the individual borrower accounts claimed by the creditor’s agent to have justified the sale of mortgage backed bonds. Without crediting the borrower with payments made through loss mitigation contracts, the claim of default and “you owe the money” are false. It is simply not true that “the borrowers owe the money.” They only owe, if anything, the amount of money due, less any offsetting claims they have as affirmative defenses and counterclaims. And the amount due starts with a much lower amount than the amount claimed by servicers because of the receipt by the lender (not the servicer) of loss mitigation payments.