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Wells Fargo as Trustee, how does this work?

Discussion in 'Short Sale Outpost' started by ufkenmill, Jan 7, 2012.

  1. ufkenmill

    ufkenmill LoanSafe Member

    I have an 80/20 with AHMSI and I finally got the name of the owners of our loans today but don't work in the finance or mortgage industry and have a question.

    The owner of our 80 is:

    Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2007-5, Asset Backed Certificates, Series 2007-5.

    The owner of our 20 is:

    Wells Fargo Bank, N.A., as Trustee for Soundview Home Loan Trust, 2007-OPT1, Asset Backed Certificates, Series 2007-OPT1.

    I know Option One went bankrupt but I haven't been able to find much on Soundview.

    For the purposes of negotiating a short sale, can we considr Wells Fargo to be the "owner" and would they be the one to negotiate the short sale?

    Thanks for any help!
  2. Cat Damiano

    Cat Damiano Mortgage Wars

    The short sale process would still need to be done through AHMSI and the second lien servicer would need to agree to accept any amount left after the first has been paid as their payment to release the lien, in order for the short sale to be completed.
  3. ufkenmill

    ufkenmill LoanSafe Member

    Thanks for the reply Cat. Both loans are serviced by AHMSI and both were originated by Option One. Who will be the entity that actually decides whether or not we can do a short sale or modify our loans? Is it AHMSI the servicer, Wells Fargo the trustee or somebody who runs the "soundview home loan trust."

    I'm new to figuring this stuff out so please forgive my ignorance on the subject.

    thanks again for your help..
  4. Cat Damiano

    Cat Damiano Mortgage Wars

    AHMSI as the servicer would be giving the approval on a shortsale. Given that both loans are serviced by AHMSI, that may make the process go a bit more smoothly.
  5. ufkenmill

    ufkenmill LoanSafe Member

    ok, one more question. Since OOMC is out of business but Wells Fargo is the trustee for the securitized mortgages, does Wells Fargo need to also approve it?

    thanks again!
  6. Cat Damiano

    Cat Damiano Mortgage Wars

    Most pooling and servicing agreements have verbiage agreed upon between the servicer and the investor allowing the servicer to make these types of decisions as long as it is in the best interest of the investor.
  7. ufkenmill

    ufkenmill LoanSafe Member

    who actually owns all of option one's mortgage loans now since they're bankrupt? I know AHMSI bought alot of their old stuff right.

    thanks cat!
  8. Cat Damiano

    Cat Damiano Mortgage Wars

    Actually, AHMSI wouldn't have bought any of the loans as they are just a servicer. They were most likely pooled and sold as mortgage backed securities which are simply shares of a home loan sold to investors. A bank lends a borrower the money to buy a house and collects monthly payments on the loan. This loan and a number of others, perhaps hundreds are sold to a larger bank that packages the loans together into a mortgage-backed security. The larger bank then issues shares of this security, called tranches, to investors who buy them and ultimately collect the dividends in the form of the monthly mortgage payments. These tranches can be further repackaged and sold again as other securities, called collateralized debt obligations (CDOs).
  9. ufkenmill

    ufkenmill LoanSafe Member

    I know this is like mortgages 101 but I have a follow-up question if you don't mind. So Option One gave us the loan, sold the loan to investors in the form of a mortgage-backed security (in our case: Wells Fargo Bank, N.A., as Trustee for Option One Mortgage Loan Trust 2007-5, Asset Backed Certificates, Series 2007-5) of which the security consists of probably hundreds of loans which are technically owned by potentially 1000's of anonymous "investors" correct? So is this why there's no specific loan "owner" for us to negotiate with and why AHMSI as the servicer gives the approvals to loan mods and short sales? I've seen other posters state that they were turned down for a loan mod or short sale and the reason given was "the investor won't allow it" or some form of this. Is it possible for us to obtain the agreement between the servicer and the pool investors so we know what exactly the investors will alow in terms of modifying loans or short sales?

    thanks again for all the great info!!
  10. ufkenmill

    ufkenmill LoanSafe Member

    actually a search of secinfo.com revealed this exhibit here:
    SEC Info - Option One Mortgage Loan Trust 2007-5 - 8-K - For 4/27/07 - EX-4.1

    which is the agreement between option one and wells fargo. I'm just getting into this now but hopefully I can find more info. Helps me understand how this whole process works..
  11. ufkenmill

    ufkenmill LoanSafe Member

    I found this here in regards to the agreement between OOMC and Wells Fargo as trustee:

    "Notwithstanding anything in this Agreement to the contrary, the Servicer may not make any future advances with respect to a Mortgage Loan (except as provided in Section 4.04) and the Servicer shall not (i) permit any modification with respect to any Mortgage Loan that would change the Mortgage Rate, reduce or increase the Principal Balance (except for reductions resulting from actual payments of principal) or change the final maturity date on such Mortgage Loan (unless, as provided in Section 3.07, the Mortgagor is in default with respect to the Mortgage Loan or such default is, in the judgment of the Servicer, reasonably foreseeable) or (ii) permit any modification, waiver or amendment of any term of any Mortgage Loan that would both (A) effect an exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or Treasury regulations promulgated thereunder) and (B) cause any REMIC created hereunder to fail to qualify as a REMIC under the Code or the imposition of any tax on “prohibited transactions” or “contributions after the startup date” under the REMIC Provisions."


    So they can't modify your loan in any way unless you are in DEFAULT. They can modify if they determine default is reasonably foreseeable but what is their definition of that???

    Also:

    "the NIMS Insurer’s prior written consent shall be required for any modification, waiver or amendment if the aggregate number of outstanding Mortgage Loans which have been modified, waived or amended exceeds 5% of the number of Mortgage Loans
    as of the Cut-off Date. The Servicer’s analysis supporting any forbearance and the conclusion that any forbearance meets the standards of Section 3.01 and the Loss Mitigation Procedures shall be reflected in writing in the Mortgage File."

    Is it correct to assume that 1) you must be in default (or close to it with an undefined version of reasonably foreseeable event) and 2) they need permission from the NIMS insurer (whatever that is)?
    Last edited: Jan 8, 2012
  12. Cat Damiano

    Cat Damiano Mortgage Wars

    Dissecting the language in a PSA that is the size of War and Peace is not my forte. They are put in place between the investor and the servicer so that the servicer can handle the mortgage servicing. When an investor isn't participating in a modification program, the servicer is already made aware of that through the PSA.

    Here is where you can look and see if you can find the PSA, Good Luck!

    Full Text Search
    Last edited: Jan 8, 2012
  13. ufkenmill

    ufkenmill LoanSafe Member

    I think I answered all of my own questions (with your help)....thanks Cat!

    It's hard for homeowners to grasp the fact that while it's emotional for us (homeowners in general) to request modifications, attempt short sales - and get turned down - for the banks it's all black and white with very little gray area and absolutely no emotions.

    So now I think I've got our plan ready - no emotion and play hardball, keeping in mind they're somewhat tied by these PSA's but that term "reasonably foreseeable" is almost a loophole. The definition of "reasonably foreseeable" could easily be differnt between two different people. Unless I find it defined, I'll assume that a short sale or modification CAN be approved without actually being late on a payment (contrary to what others have said on this board). I'm sure it doesn't happen often, but within the confines of the PSA, it's allowed.

    thanks again!!!
  14. Cat Damiano

    Cat Damiano Mortgage Wars

    No problem, I am glad I was able to help. Please keep us posted on how it works out with whichever route you decide.

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