Open Letter to Jay Bray, CEO, President and Chairman of the Board of Nationstar Mortgage, LLC

Dear Mr. Bray,

On July 1, 2013 your company, Nationstar Mortgage, LLC took over the servicing of our home loan. Our loan was originated in 2005 by a local company that was working for Countrywide Home Loans and, as with so many mortgages at the time, there was fraud in the origination of the loan when someone forged the signature on the loan application and did other sleight of hand tricks to qualify us for a loan for which we did not actually qualify. Countrywide was the original servicer of our loan.

Bank of America purchased Countrywide in 2008 and took over servicing of the loan until selling the servicing rights for the loan to Nationstar in 2013. While we had some problems and complaints with how Bank of America serviced our loan, those problems now seem inconsequential when compared to what we have experienced with your company. Since taking over the servicing of our loan Nationstar has committed at least 23 violations of mortgage servicing laws, including not sending monthly statements on 16 separate occasions. Bank of America never failed to send us a monthly mortgage statement. I cannot say Bank of America violated any mortgages servicing laws, but with Nationstar the violations are coming at a rate that defies common sense.

Below is a list of the mortgage servicing violations committed by Nationstar since taking over the servicing of our loan on July 1, 2013:

Failure to send monthly mortgage statements

12 C.F.R. § 1026.41 requires the servicer to provide monthly mortgage statements. The only exception is for a borrower in bankruptcy; we have never filed for bankruptcy. Nationstar did not send mortgage statements to us in the following 16 months:

• August 2013
• September 2013
• November 2014
• December 2014
• January 2015
• August 2015
• September 2015
• October 2015
• November 2015
• December 2015
• January 2016
• February 2016
• March 2016
• April 2016
• July 2016
• August 2016 

Failure to send initial rate change disclosures

12 C.F.R. § 1026.20(d) requires the servicer to provide disclosures regarding changes in interest rate and monthly payment 210 to 240 days prior to the first change in interest rate. Our first change date was July 1, 2015 and the disclosures should have been provided between November 3 and December 3, 2014. We did not receive the required disclosures.

Failure to send subsequent rate change disclosures

12 C.F.R. § 1026.20(c) requires the servicer to provide disclosures regarding subsequent changes in interest rate and monthly payment 60 to 120 days before the change. The second change was set for July 1, 2016 and no disclosures were provided.

Failure to respond adequately to a Qualified Written Request

12 U.S.C. § 2605(e), part of the Real Estate Settlement Procedures Act (RESPA) allows a borrower to submit a Qualified Written Request (QWR) to their servicer requesting documents and information pertaining to the servicing of their loan. We submitted a QWR on January 10, 2014. The January 17, 2014 response from Nationstar was a boilerplate response that did not specifically address the issues raised in the QWR, including failure to provide a copy of the Note as requested, thereby violating the law. Nationstar is well aware of its responsibilities under RESPA given the recent ruling in the case of Renfroe v. Nationstar Mortg., LLC (11^th Cir. 2016) 822 F.3d 1241 wherein the court found the exact type of response we received can be the basis for a cause of action in litigation.

Failure to respond adequately, or at all, to Notices of Error

Another provision of RESPA contained in 12 U.S.C. § 2605(e) allows borrowers the right to submit a Notice of Error (NOE) identifying apparent errors committed by the servicer. Over the last two years we have sent Nationstar three NOE’s. The response to the first did not address the errors identified in the letter, and the other two NOE’s did not receive a response at all, despite the legal requirement that Nationstar respond.

Failure to provide a true and correct copy of the Note

California Civil Code § 2943(b)(1) requires a servicer to provide a borrower a copy of the mortgage Note including “any modifications thereto.” After making multiple requests to Nationstar for a copy of the Note consistent with the requirements of the law, Nationstar refuses to produce a copy. The only copy provided by Nationstar is a copy of a copy that Placer Title made immediately after it was signed. We have never received a copy of the wet-ink Note that includes assignments/endorsements/transfers that would be found on a copy of the Note “with any modifications thereto.” On February 18, 2016, Nationstar Vice President Marisa Barker stated that she could not say with certainty who owns our mortgage, only that “our records indicate” that a securitized trust, SARM 2005-15, owns the Note. Barker also said she thinks Wells Fargo, the trustee of the securitized trust might have the original Note, but she was not sure. As I am sure you know the only way to definitively determine the owner of a Note is to inspect the original and see who it has been assigned to. 

Failure to provide consistent information regarding the loan

Nationstar has committed multiple violations of California’s Rosenthal Fair Debt Collection Practices Act (Rosenthal Act). Examples of Rosenthal Act violations by Nationstar include providing statements in May and June 2016 with contradictory interest rates and monthly payments. The May 2016 statement shows an interest rate of 3.000% and a monthly payment of $1925.05 through 07/01/2017. The June Statement shows an interest rate of 3.500% and a monthly payment of $1517.23 through 07/01/2017.

Our Attempts to Resolve Problems

Over the past three years, besides contacting Nationstar directly regarding all of these violations, we have filed eight complaints with the Consumer Financial Protection Bureau (CFPB), and three complaints with the California Department of Business Oversight (DBO). In general Nationstar’s responses to our complaints have ignored the issues raised or been incomplete and/or evasive. One example of this is the May 13, 2015 letter Nationstar sent in response to our May 2, 2105 CFPB complaint. Nationstar’s letter, signed by Chris Pereira, states, “[w]e have conducted an investigation and it was determined the error asserted within your correspondence did not occur on the account.” Two days later on May 15, 2015 Nationstar sent a letter signed by Chandler Williams responding to a DBO complaint. “We have conducted an investigation and determined the errors asserted within your correspondence regarding the request for information about the monthly statements occurred.” Both the CFPB and DBO complaints concerned the same conduct, not sending monthly statements and not providing the disclosures prior to the first change in interest rate and monthly payment on the loan. Nationstar’s answers are clearly contradictory.

As a result of Nationstar’s numerous violations of the law and unresponsiveness to our inquiries and concerns we were left no choice and commenced litigation against Nationstar in July 2015. Currently no one at Nationstar will discuss our situation because of the litigation, meaning Nationstar is not responding to questions that must be answered in order to fulfill their mortgage servicing obligations. Multiple times Nationstar employees have made promises to respond to inquiries, and still we wait. One example of the many failures to respond was the promise by Nationstar Vice President Marisa Barker to consult with the litigation department about our request for a copy of the Note and get back to us with an answer. We have been waiting since February 18, 2016. The last contact we had with Nationstar  was on September 27, 2016 when I spoke with Christopher. He refused to discuss anything about our account because of the litigation and said to call the attorney defending Nationstar in our case, but he then promised to have your litigation department respond. We are still waiting. Unfortunately the lawyer and his law firm have also failed to respond to requests for information. As an example on March 30, 2016 we sent a lengthy letter to Jason M. Richardson the attorney at Severson and Werson in San Francisco handling the matter but received no response. On June 7, 2016 I had a phone conversation with Mr. Richardson again asking for a copy of the Note consistent with the requirements of California law. Mr. Richardson promised to pass the request along to Nationstar and get back with a response. We are still waiting. In a more recent conversation when we asked Mr. Richardson for a copy of the Note consistent with the requirements of California law he stated, “it’s just not done.”

Who is the Note Holder?

One of the most troubling parts of our conflict with Nationstar concerns the identity of the current Note Holder. Despite the fact that California Civil Code section 2943(b)(1) requires you provide us a copy of the Note, Nationstar has refused to comply with the law. The table below shows all of the conflicting information we have received over the years concerning the identity of the Note Holder:

Date of Identification                   Identified Note Holder             Documents or Party [Disclosure Date] (if different)      or Investor                                Disclosing Identity

May 12, 2005	Najarian Loans	Note and Deed of Trust at signing of documents
May 18, 2005 [May 14, 2013]	Najarian Loans	MERS Milestones
May 31, 2005 [May 14, 2013]	Countrywide / Bank of America, N.A.	MERS Milestones
July 2, 2005 [May 14, 2013]	Lehman Brothers Holdings	MERS Milestones
December 10, 2009	Aurora MSF Lehman	BAC Home Loans Servicing
June 15, 2011	Aurora MSF Lehman	Letter from BAC Home Loans Servicing
August 17, 2011	Aurora MSF Lehman	Letter from Bank of America, N.A.
September 11, 2011	Lehman Brothers Holdings	MERS Online
September 20, 2011	Aurora Bank	Letter from Bank of America, N.A.
September 29, 2011	Aurora MSF Lehman	Bank of America, N.A. Letter
October 7, 2011	Wells Fargo Bank, N.A.	Bank of America, N.A. Letter
March 22, 2012	Wells Fargo Bank as Trustee for SARM 2005-15	Wells Fargo, Bank of America, and MERS
July 31, 2012	Wells Fargo Bank, N.A.	Bank of America, N.A. Letter
September 12, 2012 [May 14, 2013]	Wells Fargo as Trustee	MERS Milestones
January 17, 2014	Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Minnesota	Nationstar Letter
February 20, 2014	Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Minnesota	Nationstar Letter
August 11, 2015	Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Maryland	Nationstar Letter
February 26, 2016	Wells Fargo Bank as Trustee for SARM 2005-15. Address is in Maryland	Nationstar Letter

Nationstar Vice President Marisa Barker said no transfers are done on paper, only electronic transfers through MERS. This is not the case, but if it were true, then the MERS Milestones prove that the SARM 2005-15 does not own the Note.

We were provided a copy of the MERS Milestones for the Note in May 2013, so the information is possibly incomplete. Regardless, there is a clear conflict over the identity of the current Note Holder for the following reason: the Prospectus for the SARM 2005-15 Trust designates the depositor into the SARM 2005-15 Trust as Structured Asset Securities Corporation. Per trust law, information provided by Najarian, and the Prospectus for the SARM 2005-15 Trust, the Note must have the following chain of title/assignments in order to be securitized and placed in the Trust:

(1)       Najarian Loans, Inc. (Original lender and agent for Countrywide)

(2)       Countrywide Home Loans, Inc. (now Bank of America, N.A.)

(3)       Lehman Brothers Holdings, Inc.  (Sponsor and Seller)

(4)       Structured Asset Securities Corporation (Depositor)

(5)       Wells Fargo Bank as Trustee for SARM 2005-15

The chain of title for the Note according to the MERS Milestones is:

(1)       May 18, 2005:  Najarian Loans, Inc.

(2)       May 31, 2005:  Countrywide Home Loans, Inc.

(3)       July 2, 2005:    Lehman Brothers Holdings, Inc.

(4)       September 12, 2012:  Wells Fargo as Trustee

The Closing Date for the SARM 2005-15 was June 30, 2005, and according to law and the SARM 2005-15 Prospectus, assets had to be placed in the SARM 2005-15 no more than 90 days after the Closing Date in order for the asset to have favorable tax status. The Note could have been placed in the SARM 2005-15 at any time, but after Lehman Brothers declared bankruptcy in 2008, if Lehman still owned the Note, as the MERS Milestones assert, sale of the Note to the SARM 2005-15 would have been controlled by the bankruptcy court. We have never received any notification that the loan was involved in the Lehman Brothers bankruptcy. Outside of the MERS Milestones we have never received any communication indicating Lehman Brothers was involved in any way with our loan.

To date there are no recorded documents in Alameda County disclosing an assignment of our Deed of Trust from Najarian to another Note Holder. If the Note was transferred to Wells Fargo as Trustee in 2012 when the SARM 2005-15 Trust is alleged to have become the Note Holder, we did not receive the notice required by federal law (15 U.S.C. § 1641(g)). Bank of America sending us a letter in July 2012 stating that Wells Fargo Bank, N.A. was the Note Holder, not Wells Fargo as Trustee further muddies the waters. The Note could have been transferred to another Note Holder since 2012 but we have not received notice of a transfer from a new investor that federal law requires. The chain of title in the MERS Milestones for the Note does not show the requisite transfer to the Depositor, Structured Asset Securities Corporation, before being placed in the Trust. If this break in the chain of title is accurate, the Trust cannot be the Note Holder. The Prospectus for the SARM 2005-15 requires that along with the Note endorsed to Wells Fargo as Trustee or in blank, each step in the securitization of the Note would be evidenced by Mortgage Loan Purchase Agreements with accompanying Mortgage Loan Schedules identifying each loan that was a part of each purchase agreement. The current record concerning ownership of the loan could be a mistake because the MERS system was not updated in a timely fashion. But because the Note is a negotiable instrument, the only way of determining the current Note Holder is to produce a copy of the original blue-ink version of the Note with any assignments/endorsements/allonges or other evidence of transfer to the current Note Holder.

Nationstar Cost Us $89,000 and a  HAMP Modification

In August 2015 we applied to Keep Your Home California (KYHC) for principal reduction funds (PRP). As you know the KYHC program is part of the federal program financed with Hardest Hit Funds (HHF) from the Troubled Asset Relief Program (TARP) that is administered by the Treasury Department. We applied for the KYHC PRP funds because my wife became disabled as a result of rare auto-immune disease, microscopic polyangiitis, in 2013 and is no longer able to work.. In late October 2015 we were provided $89,000 in KYHC PRP funds. We signed a Deed of Trust (DOT) with the California Housing Finance Agency Mortgage Assistance Corporation (CalHFA MAC) in October 2015 that provided the money would be provided to Nationstar to reduce the principal on our loan and we would not have to pay interest on the KYHC PRP loan.

Part of the KYHC process is a requirement that the borrower sign a “recast” of their existing loan. The recast document memorializes the amount of the new payment the borrower will be paying after the application of the KYHC PRP funds. After signing the KYHC loan papers in October, KYHC provided Nationstar with the $89,000 and on November 6, 2015 the funds were applied to our account. In November 2015 Nationstar sent us a letter with a proposed recast agreement. On November 30, 2015 we sent Nationstar a letter detailing multiple errors and problems with the recast agreement. Nationstar sent the identical recast agreement again in late December 2015 and we sent a second letter explaining the problems. A third copy of the identical recast agreement was sent to us by Nationstar In February 2016 with a letter from Eric Rittmueller stating ” Your original Recast document was not able to be processed. This is not a denial letter, your recast request is still valid and can be processed. Please return either a copy of the Recast Agreement that you already signed and had notarized, or re-execute the Agreement included in the package (it is the same document). You may use the return UPS label and envelop (sic) included.” Because none of our concerns about the recast agreement had been addressed, we sent your company a third letter detailing the problems with the document on February 15, 2016.

On February 18, 2016 I received a phone call from Marisa Barker, who is apparently Nationstar’s Community Outreach Vice President. Ms. Barker declared that Nationstar no longer requires a signature for a recast agreement. Further she stated that signing the recast agreement is not a requirement of KYHC and that Nationstar was adhering to the guidance from Treasury and KYHC. She said she would email us a document with this information. We never received an email. We never signed the recast agreement because of Ms. Barker’s assurances that our signature was not required and that all would be well.

Based upon the representations of Ms. Barker and account information available to us online showing the principal had been reduced we were confident our $89,000 from KYHC was secure in our account and we could move forward. Applying for the KYHC PRP funds was to reduce the principal on our loan and then, after applying those funds to the account, we would apply for a Home Affordable Modification Program (HAMP) modification to our reduced principal loan. This was an approach that had been recommended to us by attorneys with Housing and Economic Rights Advocates (HERA) who counsel and work with individuals trying to stay in their homes.

In August of this year we submitted our HAMP application to Nationstar. In a letter dated September 15, 2016 Nationstar informed us that we had been approved for a HAMP modification of our mortgage. The information regarding the monthly payment for the HAMP Trial Payment Plan suggests that the HAMP modification was based upon a calculation that included the $89,000 of KYHC PRP being applied to our account. We have not been able to confirm this or get answers ti sine addutuibak qyestuibs we had with the HAMP Trial Plan because neither Nationstar or your attorney will communicate with us about what happened. On September 16, 2016 Nationstar returned the $89,000 to KYHC without providing us notice or an explanation. Because we had significant unanswered questions regarding the HAMP mod we could not submit the first trial payment and the offer has been rescinded.

After consulting with attorneys at HERA we believe the following occurred. Federal programs prohibit accessing two federal mortgage relief programs simultaneously. Because we had not signed a recast agreement, under federal rules the KYHC process was considered incomplete, and therefore when we applied for the HAMP modification, it appeared we were applying for two federal programs simultaneously. We received no warning from anyone anywhere alerting us to this possibility. Marisa Barker, as a Vice President of  Nationstar who works with these issues on a daily basis should know how the system works, but her representation that we did not need to sign a recast was incorrect. The reconveyance of our CalHFA MAC loan was recorded in Alameda County on October 27, 2016.

We have been told by KYHC that we can reapply for the PRP funds. The problem is that that process takes two to three months, and the HAMP program expires on December 31, 2016. As of this date we do not have enough time to reapply to KYHC, get the paperwork and approvals in place, and be able to reapply for a HAMP modification before the expiration of the program. Therefore, our attempts to work with Nationstar to make our mortgage payments affordable so we can stay in our home have been thwarted due to our reliance on statements made by a Vice President of your company and Nationstar’s overall unwillingness to communicate with us regarding the status of our account in a responsive and meaningful manner.

The Customer is Always Right, Right?

In a December 7, 2015 article in the National Mortgage News you are quoted saying, “Our view is the customer is always right and that’s what we’re preaching. We want to treat these customers in the best way possible. I don’t want to ever take the attitude that the customer is wrong. A lot of time the customer just needs to be better educated.”[1] Mr. Bray, I believe you need some educating. Nationstar’s customer service is wretched and beyond any morally reasonable standard. If the customer is always right why haven’t you made changes in the three years we have been “serviced” by Nationstar. No amount of complaints to government agencies, or letters and complaints to your company have resulted in any change in your incompetent and illegal practices.

Prove to us that the “customer is always right” by actually responding to our inquiries and the issues we raise and providing the information we request. Then produce a copy of the original Note identifying the current holder as required by California law. A true and correct copy of  the Note is the only way to positively prove the identity of the Note Holder. Until we receive the copy of the Note you have not provided the verification of the debt that was promised in a number of letters we received from Nationstar. Since there exists doubt as to who actually owns the Note then it follows that there is doubt as to whether Nationstar even has standing to service our loan.Assuming you do, please follow all of the laws that apply to the servicing of our loan. That alone would be an improvement over the current situation. Nationstar has willfully failed to follow the law, and repeatedly refused to communicate with us about our loan. The contracts involved in this matter require Nationstar to follow all applicable mortgage servicing laws. We wrote Nationstar in April 2015 informing you that you had breached the contracts, the Note and the Deed of Trust. If the breaches had ended at that point and there had been a good faith effort to do the right thing we could accept it. But instead Nationstar appears to have doubled down on mortgage servicing violations.

I look forward to your response.

Sincerely yours,

Ralph Kanz

[1] http://www.nationalmortgagenews.com/news/servicing/nationstar-ceo-vows-to-put-service-back-in-mortgage-servicing-1067216-1.html

(I am not an attorney. Nothing in this post should be construed as legal advice of any kind. If you are having problems similar to ours, please consult a legal professional.)