Does not represent a default Since I entered the fray as the actual attorney for clients, we are getting

down to the nitty gritty. Judges are surprised to learn that the foreclosure case in front of them was filed despite the payments actually received by the alleged creditor through third parties. In other words the case in front of them does not actually present a default from the creditors point of view even tough the borrower stopped paying. The primary payment we are focusing on today is servicer advances which come in different flavors non stop, limited and none. !ost loans "#$%& are sub'ect to claims of securiti(ation regardless of what the current servicer or trustee is telling you. )nd most of those "my guess is around *+% #,%& come with third party obligors, which is why there is so much confusion. -esides servicer advances, the agents for the trust beneficiaries at the investment ban. who sold them the bonds received on behalf of the bond holders, insurance payments and other funds from other contracts designed to limit the ris. associated with the terms of the bond repayment of interest and principal. /hen you do the math, you can easily see how the 0lender1 could be overpaid by a multiple that averages 2 + times, even while the borrower is being pursued for yet another payment or else losing a home. The dirty little secret, the mystery behind these payments is that under common law and statutory law there are potential causes of action against the borrower for such payments, but the actual creditor on the loan has been fully satisfied. /orse yet, those third parties have waived subrogation or any right of action against the borrower to prevent multiple parties from suing the same defendant on the same debt. The insurers are mad as hell. -ut the servicers are curiously silent possibly because they are not really paying the servicer advances which are instead coming from the pool of funds held by the investment ban.er from the original investment of the trust beneficiaries and the receipt of insurance, credit default swaps, guarantors and even sales to the 3ederal 4eserve. The lender "Trust beneficiaries& have agreed to lend money on the basis of interest only payments at a particular rate that rarely coincides with any of the loans alleged to be in the pool. Since they were sold the bonds first before the loan was made "see 0selling forward1&, you can assume fairly safely that the actual lender is the trust or trust beneficiaries, regardless of what was put on the loan documents which is why I say that none of the loan documents are valid enforceable documents and why the investors have sued the real culprits "investment ban.s& stating the e5act same thing. In one case I have currently pending in Dade 6ounty, 3lorida, 7S -an. is putting itself through a ringer because servicer advances have been paid in full to the creditor that they ac.nowledge is the creditor. The Judge instantly recogni(ed that this defeats the allegation of default, if the creditor has received and accepted payment. The attorney for 7S -an. allegedly as trustee for the trust beneficiaries is pursuing a strategy of getting the assignment of rents enforced. The statutory re8uirement is that there be a written demand for rents, which nobody ever made. )nd it turns out that the Trustee was unwilling to go on record demanding assignment of rents because the beneficiaries were paid in full e5actly as set forth in the prospectus and pooling and servicing agreement. ) call to the servicer confirmed they were not interested in the rents, but curiously, despite 9S) restrictions to the contrary, the new 0Trustee1 7S -):; is pursuing the foreclosure. The Judge, who wants more proof of the advances which we are only too happy to provide, instantly recogni(ed that if the trust beneficiaries were receiving their e5pected payment, then there can be no default on the principal, which is prere8uisite to -<T= foreclosure and the assignment of rents. In this case there were +> payments received and accepted by the trust beneficiaries after the alleged borrower default. /e were able to get this information through drilling down to loan level accounting in our title and securiti(ation reports. If there is money owed it is not owed to the plaintiff in foreclosure and it is not secured by a mortgage. see http?@@www.livingliesstore.com

/e have since done the reports on other properties owned by the same client and found out that the same pattern holds true. In the one case we have already argued, more than A*,,,,, has been received by the trust beneficiaries from servicer non stop advances. 9ayment is the ultimate defense for an action to recover money. The fun part comes when the Judge starts as.ing why these payments were not disclosed by the attorney or his client. There are other sources of third party payments from co obligors at the inception of the loan. The mystery comes from the fact that the homeowner who signs loan papers has no idea, because it was never disclosed to him@her@them that the lender is not the payee on the note, not the mortgagee on the mortgage, not the beneficiary on the trust deed, but rather the trust beneficiaries who own bonds issued from the 4B!I6 trust "which as I have already reported was never actually funded and never actually received title to the loan&. In other words, the lender has agreed to one set of terms that were never disclosed to the borrower in violation of the truth in lending act, and the borrower has agreed to an entirely different deal which means that there is no 0meeting of the minds.1 -oth the lender and borrower wanted a completed contract that would be enforceable and where title was clear, but neither of them got it. The solution is to get rid of the servicer and get rid of the investment ban.er, get an accounting of all funds, repay the investors and wor. out a reasonable deal with borrowers, most of whom would be willing to sign a mortgage that was enforceable based upon economic reality.