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CHART SHOWING ACCOUNTING ISSUES FOR SECURITIZED LOAN

CHART SHOWING ACCOUNTING ISSUES FOR SECURITIZED LOAN

COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary

SEE CHART OF WACHOVIA SECURITIZATION TRACKING THE MONEY FLOW

I don’t think I published this before. Our very own Dan Edstrom, senior securitization analyst, is the one who did it. Amazing work. This gives you an idea of what he can do for you if you want to drill down deeper into the accounting issues — that is where the truth comes spilling out about whether the obligation still exists, whether the pool ever existed, and whether the money is being paid by other parties or whether the obligation was paid off by other parties.

see LOAN LEVEL ACCOUNTING AND REPORT

This is an accurate rendition of the accounting issues raised by securitization, the addition of co-obligors before and after the closing with the borrower, payments advanced with and without rights of subrogation, and credits due to the investor-lender.

The advantage of this chart is that it shows at a glance the myriad of factual issues raised by the mere fact that the parties intended to construe the loan as securitized and it provides a blueprint for how they were handling the money whether the loan actually moved from the originator up the securitization chain or not. The primary point here being that in nearly all cases except those that went far into litigation, the loan did not move, but the money DID move and it followed this path.

Thus the chart supports your demand for discovery from multiple parties to determine how much of the obligation is actually due, whether any part of it is truly in default as construed by the actual creditor, and to whom the money is owed.

This not only relates to common issues of standing, real party in interests and estoppel information for payoff in a modification or settlement, but also the issue of who can actually submit a credit bid in an auction, even if the the auction was legally the result of a bona fide foreclosure or use of a power of sale in non-judicial states.

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3 thoughts on “CHART SHOWING ACCOUNTING ISSUES FOR SECURITIZED LOAN”

  3. ANONYMOUS

    Interesting chart. Could be wrong but didn’t Wachovia settle allegations of money laundering??

    Also, how Trusts were intended to be set up – and the flow — are now history. None of the trusts performed as intended — they are now broken apart with many remnant pieces held by the US government. And, with collection rights sold off to distressed debt buyers/hedge funds.

    It is ironic that courts are stuck in time on how trusts should have operated — and not on the torn apart pieces and removal of non-performing loan receivables. In fact – the trusts are not operating at all.

    Not only were loans not conveyed to the trusts, but also – even after false conveyance – loans were repurchased. We do not KNOW which loans were repurchased. And, we do not know who currently owns collection rights – or, shall we say, — will actually collect the property funds.

    Focus in courts is on the “original” creditor — if there ever was one — and not on the current creditor – who is profiting by foreclosures.

    Concealment of the real party in interest is a long time practice used by debt collection attorneys.

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