The borrower loan amount was the note for $586,300.00 The amount on deposit with creditor was lenders 29,315.00. Lender requested an advance of  $556,985.00

The transaction is called a warehouse line for funding purposes. It generally is closed within 180 days of the HUD I settlement date. In the case below it is closed on 6/30/2016 the date of the foreclosure filing.


On 6/30/2016 the amount due creditor is 618,005.81. The shortfall due form a now defunct and bankrupt lender is 31,705.81.

Add the balance due 31,705.81 and lender collateral , the note for $586,300 that was cancelled instead of ever having been old. And here you see why SPS statements show compensating balances for interest bearing account of -618,005.81 and outstanding balance of 31,705.81 and 586,300.00 equal to $618.005.81.

These two SPS balances offset one another and equal a value of zero meaning 0.00 basis in assets held for foreclosure sale.

26 CFR 1.751-1 – Unrealized receivables and inventory items.

As one can see here ….the scheduled foreclosure is going down for zero .  Section 751(b) applies whether or not the distribution is in liquidation of the conversion of assets and liabilities ….. the basis of any potential gain described in paragraph (c)(4) of this section is zero.

Next we look at the rest of the above chart and show why the lender canceled out the amount owed with cash on deposit. That case is valued at over $2.350 million  from back dating 37 years offset by reverse selling the same amount over 48 years.

The net adjusted years accelerated here are  11.02 that jives with the date of the foreclosure. In other words from womb to tomb are 11.02 days from HUD I settlement to foreclosures sale.

This is cause to cite the foreclosure was known the date the loan was originated.

[Expert witness providing testimony and affidavit in wrongful foreclosure cases for antecedent debt of debt of another. Not an attorney and not for  establishing rights or a legal opinion]


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