Banking Expert Opines on Violation of Deed of Trust

This case involved a bank that allegedly made misrepresentations to a client concerning the Home Affordable Modification Program process. The Plaintiffs had plans to withdraw funds from one of their 401k plans for a”hardship” advance to pay off some debt, so their payments would be lower when the HAMP went through. The plaintiff’s employer requested a letter from the bank explaining their situation, as the employer’s requirement to disburse hardship funds. The plaintiffs requested this letter many times, but it never came. In the meantime, the plaintiffs made several large payments to pay down their debt which were not accounted for. While the above was going on, the bank instituted foreclosure, all the while other bank employees were promising HAMP. Additionally, the foreclosure was not performed per their deed of trust. There was not a correct address in the notice, and the plaintiffs never received a reinstatement letter, required by the deed of trust.

Question(s) For Expert Witness

1. Are you familiar with the HAMP process? 2. Do you have knowledge of "dual tracking"? 3. What is your experience with and understanding of pooling and service agreements?

Expert Witness Response E-013958

I am highly qualified to assist. As VP of Investments at a large insurance company, I completed deep due diligence of the 2009 US mortgage servicing industry as we considered buying portfolios of under-performing mortgage loans and investing in third-party servicing organizations. As recently as 2012, I was provided the opportunity to examine these assets again and various third-party servicing groups as part of an overall wealth building strategy for several high net-worth individuals. I have read through the material matters of the HAMP program and have a good understanding of both its written guidelines and the "spirit" of its intentions. It appears that the loan servicing group was acting independently from the bank's HAMP or origination groups. It's also entirely possible that the servicing group could have been outsourced to an independent third-party whose role is governed by the PSA and is not part of the HAMP process (thus the creation of "dual-tracking"). Thus while the bank, as the client-facing originator of the loan, was attempting to provide service to its customers, it did in fact, not own or service the loans in question. In this case, the details are important. Correspondence between the plaintiff, the originating bank and the servicing agent are essential to prove liability of the originating bank or servicing group. This will have to be weighed against the state law at the time regarding the usage of "dual-tracking" as a method for lenders to attain proper security on their collateral.