ALL THIS IS DISCUSSED IN MY SEMINAR IN CHANDLER THIS THURSDAY 7/26 AT 9:00 AM.
SIGN UP NOW FOR SEMINAR IN CHANDLER, AZ — THERE IS HOPE
If you are not interested in keeping the house the options are
(a) simply walking away from it after you have spent a few months (or years) rent free,
(b) a short-sale in which banks are sometimes paying some serious money to avoid litigation,
(c) modification but there are two kinds. The first is the one the bank steers people into which merely puts off the inevitable foreclosure and where you waive all your defenses, of which there are many more than you might think. The second is a HAMP or similar modification which can be forced in litigation because the truth is they are not considering the modification offer and certainly not transmitting it to the investor lender who bought a bogus mortgage bond. So a well reasoned well documented modification proposal should be followed by a motion or lawsuit stating that they violated the HAMP statute by not considering it and that you can prove it — by showing that your proposal produces a far better result for the investor than the impending foreclosure. Our experience shows that when you demand to see what the “servicer” used as a standards or what the investor used as standards to consider the modification proposal the case settles on the terms or close to the terms proposed by the borrower, because they have no formula or even a record of who considered the proposal, much less any analysis showing a reasonable basis for rejecting the borrower’s offer.
(d) Wrongful foreclosure lawsuit for damages: This is favored by many lawyers especially for those who no longer want to live in the home. It is a lawsuit for money damages only and includes the possibility of punitive damages. Some awards have been in the millions of dollars.
If you DO want to keep the house you must follow the rules as to when to object, when to seek a Temporary restraining Order etc. As I explain thoroughly, it is far better to DENY AND DISCOVER that to make allegations where the burden is on you to prove facts that are exclusively known by the other side.
This is particularly effective after a bankruptcy where one party gets the automatic stay lifted and another party forecloses. That is as close to open and shut as we get. The Judges\’s order usually includes a finding that the party who moves for relief from stay is the owner of the loan. So the second party to actually foreclose, without getting a court order lifting stay for them to foreclose is in deep doo-doo. They can’t say it doesn’t matter because there has already been a finding of fact that the the first one to come to court alleged that they were the owner of the loan and the court entered the order on that basis. The second one is a stranger to the transaction, against which compensatory, punitive, exemplary damages are awardable and there is one developing case law showing that it is possible to get an award for emotional distress. The action is a cause of action called wrongful foreclosure and it is recognized in all states in common law and in many states as statutory law.
Be patient and make them commit to what their proffer is tot he court so they can’t turn it around alter saying they made a mistake. Wells Fargo, US Bank and BOA are among the banks fined millions for misrepresenting their true status in the loan chain and thus misrepresenting the status of the loan.
Whether you are seeking damages for a home lost or trying to prevent the home from being lost, do not fall into the trap of following the documents. All evidence points to the fact that the documents from beginning to end were fabricated and were not the result of ANY financial transaction, even with you when the loan was funded.
There were two loan closings when you closed — one which you knew about where a “naked nominee”with no money, no authority and nothing to do with the transaction rented their name to Wall Street to play the part of the lender and named on a note as the lender and named on the mortgage as the lender protected by the collateral of the house. But you never had a financial transaction with THAT lender. And the closing agent should have informed you of the fact that there were two closings occurring. But they didn’t.
You thought there was due diligence and confirmation of the appraisal when it was just the reverse. The appraiser was told if they didn’t come back with an appraisal at least $20k higher than the contract price or refi price then they would never work again.
So the first closing had documents but no transaction. The second closing was a transaction but was not documented where the investor lender and borrower agreed to terms. There was no note, so that is why the battle cry of those defending these bogus foreclosures is DENY and DISCOVER.
Most lawyers and realtors don’t understand or even want to understand the securitization scheme of Wall Street. They just want to use tired old procedures and defenses to justify their fee rather than win their case. The fact is that in many if not most cases, the servicer was paying the creditor your monthly payment whether you paid it or not, thus reducing the creditor’s claim against you making the notice of default and notice of sale invalid.
The second major issue is that, as the San Francisco study and many others like it across the country discovered, was that the creditor who submitted a “credit bid” at auction had no right to order the auction much less submit a credit bid lieu of cash.
While the attempts to “get a free house” are ascribed to homeowners, the real culprits are the banks and servicers who are seeking a free house by making it appear as though they are legitimate “lenders” or that they purchased the loan, and then they show the assignment. But if in discovery you ask to see the transaction where they paid for that assignment and if you ask to see the trail of money where your loan was funded, you will find that nothing in the documents that were fabricated, forged, robo-signed etc. is true. There was o transaction and the actual creditor has received payments that were not recorded and may well have settled and moved on to another investment vehicle.
If you are getting the feeling that the banks claimed losses to get bailout and insurance money when they had actually used money of investors (often without the investors knowing there were ANY investments in mortgages) then you are right. The banks lost nothing on loan defaults and the bailout was a sham. And the odds are overwhelming in your favor that the part of the obligation that was intended to be secured with the collateral of the home was in fact never secured and therefore not subject to foreclosure.
Before taking any action on anyone’s opinion in this column make absolutely certain you consult with an attorney who is fully conversant with the current mortgage and foreclosure climate. It is far different than it was ten years ago.
103 thoughts on “What To Do When Confronted With Foreclosure?”
Finding legL represntatiib and fairness is impossible. Why is this even happening and why can’t so many of us do anything about it?
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Mike, on July 28, 2012 at 1:38 pm said:
I dont see lawyers getting any results that help the homeowner. For two years all I see is alot of talk talk talk on the blogs, but where are the real results. Its annoying to see blog postings everyday but no one being helped.
Mike, right on – I’m for anything that works. Thats all. Write me for some other info not yet making it into court. registerclaims@live.com
I dont see lawyers getting any results that help the homeowner. For two years all I see is alot of talk talk talk on the blogs, but where are the real results. Its annoying to see blog postings everyday but no one being helped.
You should focus and highlight groups like Occupy Bernal in San Francisco, at least they are keeping families in their homes.
Why dont you google some of the work they are doing and encourage others to use this as a model to start other groups in their communities, people coming together, in their communities, protesting local bank branches, raising their voices, getting results, then at least you will be giving some people hope. There are probably over a hundred pending foreclosures in every neighborhood in this country right now, these people coule come together right now, and start getting results.
Tired of seeing blog posts but no news of anyone being helped.
Occupy Bernal started, people came together, and people remained in their homes, avoided foreclosure by protesting the auctions sites, protesting the banks business’s, raising their voices, sending hundreds of emails and phone calls the bank executives and when they did they got results, “squeaky wheel gets the grease”, and the amazing thing is, out of Occupy Bernal, Occupy Noe was formed, copied the same actions and Occupy Bernal, and what do you know, just last week, the Musni family is still in their home, another foreclosure was postponed, a loan modification given and this elderly couple are still in their home.
We are working on a cast now, the Lee family’s case, was transferred to PNC bank in the process, payments were sent back to Mrs. Lee, PNC then started foreclosure and want to evict her next week, think they are going to get Mrs Lee’s home! Think again! We will stop that one too. Look what happened when Wells Fargo tried to take back Ross Rhodes home recently, again google it. San Francisco neighborhoods are coming together, started with Occupy Bernal, then Occupy Noe was born, and last week Occupy Noe saved the Musni home, and with new groups forming, we are getting results
Thats Action! Those are results!
Google it!
Any reporters out there want a good story on foreclosure and what neighborhoods are doing about it, take a look at what we are doing in San Francisco.
@DC
As long as were off topic
“Two years ago, in January 2010, Zero Hedge wrote “This Is The Government: Your Legal Right To Redeem Your Money Market Account Has Been Denied” which became one of our most read stories of the year. The reason? Perhaps something to do with an implicit attempt at capital controls by the government on one of the primary forms of cash aggregation available: $2.7 trillion in US money market funds.
Yet new regulations proposed by the administration, and specifically by the ever-incompetent Securities and Exchange Commission, seek to pull one of these three core pillars from the foundation of the entire money market industry, by changing the primary assumptions of the key Money Market Rule 2a-7. A key proposal in the overhaul of money market regulation suggests that money market fund managers will have the option to “suspend redemptions to allow for the orderly liquidation of fund assets.” You read that right: this does not refer to the charter of procyclical, leveraged, risk-ridden, transsexual (allegedly) portfolio manager-infested hedge funds like SAC, Citadel, Glenview or even Bridgewater (which in light of ADIA’s latest batch of problems, may well be wishing this was in fact the case), but the heart of heretofore assumed safest and most liquid of investment options: Money Market funds, which account for nearly 40% of all investment company assets. The next time there is a market crash, and you try to withdraw what you thought was “absolutely” safe money, a back office person will get back to you saying, “Sorry – your money is now frozen. Bank runs have become illegal.” This is precisely the regulation now proposed by the administration. In essence, the entire US capital market is now a hedge fund, where even presumably the safest investment tranche can be locked out from within your control when the ubiquitous “extraordinary circumstances” arise. The second the game of constant offer-lifting ends, and money markets are exposed for the ponzi investment proxies they are, courtesy of their massive holdings of Treasury Bills, Reverse Repos, Commercial Paper, Agency Paper, CD, finance company MTNs and, of course, other money markets, and you decide to take your money out, well – sorry, you are out of luck. It’s the law.”
It seems to me that if you can’t hold it in your hands and defend it with a gun, its not really yours.
@PATRICK
“A key proposal in the overhaul of money market regulation suggests that money market fund managers will have the option to “suspend redemptions to allow for the orderly liquidation of fund assets.”
Yes I read that proposal —as part of the effort to batton down the hatches in the face of ever increasing risk to the financial syestem globally. As I see it the problem stems from the magnification of risk of sovereign failures in Eurpe at least for now caused by the explosion in derivative betting. Casino gambling. I do not think Sandy Weill and two of his fellow original Citi directors who engineered the aggregation of investment house betting with straight up boring low margin betting would have come forward with acknowledgments of the error in their ways absent a very real threat.
Nor would the FDIC be proposing that there be advance notice and waiting periods and other restrictions on the fund withdrawals /redemtions absent real risk. That scares me. It should scare anybody with a retirement account.
As I read that propsal—or saw excerpts on CNBC etc, I ruminated on the implications as you are doing. One really does not appreciate the enormity of the impact unless, you are not yet eligible for social security and are unemployed–thus you are living via distributions from your IRA or other brokerage accounts.
I thought to myself–does this mean I am unable to withdraw from money market funds invested to obtain some return beyond the paltry amount placed with an FDIC insured bank–is this to insure that I and others place our “cash” in deposits rather than money market accounts invested in corporations’ commercial paper? Am I safer in a money market account which is diversified in corporate paper of many companies–or piled into one or more FDIC insured deposits in big banks–the main alternative in a an active IRA or brokerage account. Would not this rule dry up funds available to private companies through direct issuance of commercial paper? Would this not force me to make deposits with TBTF banks and similarly force the US companies to go borrow from the banks the same money that they used to get by going to the commercial paper market?
The European financial system is already set up this way. European companies as I understand it–lacking personal knowledge—-do not issue paper but must go to their banks. My conclusion is that the rule would compel TBTFs to become intermediaries in financing activities that currently involve retail investors and private companies. Does this not increase systemic risk—-? Then I look at Royal Bank of Scotland ! Even without liquidity or balance sheet problems RBS is simply unable to function in its basic role as a plain vanilla bank. It has been unable to process companies’ payrolls, lend money–or allow cash withdrawals but for EMERENCY amounts for a month. ETC-.Think of the impact on corporate cash flows—of international trade–of issuance and settlement of letters of credit, etc. My guess is that the only aspect of RBS operations functioning seemlessly is the foreclosure division–but thats just cynical speculation.
Is it better for us to put even more reliance on the functionality of US bank-speculators that are twins to RBS?
Purportedly RBS CEO was an investment babker enamored of the high returns that the casino operators obtained and lost interest in the boring old bank–It was seen in the most literal sense as a mere cash cow to obtain deposits and central bank low interest funds–and take those sources of funds and use them to place potential high return bets via derivatives. The IT function of simple day-to day boring bank operations was allowed to slide into obsolesence.
it was aggravated by aggregation of deposit taking failed banks–with cobbled together IT systems.
This also describes the TBTF banks. JPM has book capital of $222 billion–making it a comparative giant in the financial sector. But at the time of disclosure of the problems with the London “Whale” [a casino term] this entity had $62 TRILLION in gross derivative [gamblig ]exposure. It would seem apparent to me if not to Jamie Dimon that it is highly unlikely that the European Union currenct union might break up and trigger large amounts of those derivatives–in unforseeable ways–from unfioreseeable sources. $222 BILLION pales in comparison to the implications of widespread substantial activity in a portfolio of $62 TRILLION. Its hard for me to imagina any reasonable person arguing this seriously. Especially inthe wake of the Whale.
Should the US govt force every saver and every company to make this bank a defacto partner.?
Thie foregoing speaks to systemic risk—and the apparent inability of US officials to break from the lemming-like rush to transfer power to the TBTFs—–
But back to a micro-view, the question also popped into my mind –What does this mean about day-to-day decisions that a small investor makes to buy and sell stocks through a brokerage/IRA account? As most captive small investors realize there is a “core” account in their investment portfolio. For many years that was a selected commercial paper money market fund. $1.00/share. Its not supposed to lose money–just make small interest income while it sat there waiting for Dr Schmedlock to decide whether to but bigpharma stock or Exxon—or the hot pick of the day—FACEBOOK. When the good doctor sells the stock –after several days in limbo–the proceeds reappear in the money market core account. Ready to reinvest.
So what happens to the moneynmarket core account if one must give advance notice or otherwise face limitations on access? If it is restricted will this not make it tough to buy stocks? will that not push down the stockmarket? So for example leats say the stock market takes an 800 point dive like it did when nancy Pelosi screwed up the bailout deal by being a complete amateur politician in 2008? Giving her the benefit of the doubt that it was not intended. ????
Dr Scmedlock likely would find that a good entry point—–and start selling out of the money-market core account and buy stocks–thereby arresting the fall. Is the good doctor now to be locked into his core account and unable to buy–are buy opportunities thus restricted to unregulated offshore hedge funds???
Is this good policy? Would this not contribute to the wealth of those offshore untaxed pirates? Is this a level playing field–or is an effort to “fix” the field.
However, the investment brokers such as Fidelity have provided a new alternative in the recent year–as of a year ago not all had–eg Schwab. Today atr Fidelity at least your core can be selected to be one or more TBTF banks as a deposit. This was attractive because the money market core account was only subject to SIPC insurance–now depleted by Madoff and MF Global—-wheras the bank core is subject to FDIC insurance. Thus if there is a meltdown and Fidelity pulls a MF Global-like transfer of customer funds to countless
offshore hedge funds to cover bets—you still someday have a chance to get the bank deposited amount back—also even if the bank goes down at the same time or prior to Fidelity, you get a check from FDIC [subject to the limits]. Now to be sure–this is not going to be fast enough for you to go by groceries–or make the next few years’ house payments–but at least your estate can get something back someday. Notably it has taken 4 years for Madoffs victims to get the most recent check—-and if somebody like JPM or Fidelity goes down–it will take a lot longer–if it does not break the govt entirely.
So iv come full circle and get back to your point—how do I make sure I can buy groceries and make house payments when the TBTFs fail? And/or the “emergency” is declared? One real world example is Greece. You dont need to worry about not being able to pay for prescriptions at your drugstore–because the shelves are bare. The Pharmas quit shipping when they dont get paid–I suspect bananas from the Caribean and other fruits and vegtables will be in short supply too. Oil–fuel—all commodities.
I dont want to touch the issue about money at home and guns—somebody always has a bigger gun–and less to risk. The uncertainties that I have touched upon should give pause–and im no expert–im sure iv just scratched the surface. A fellow said to me recently in respect of the question of how to deal with the TBTFs —“we need to put regulations in place about risky trading and jail some of the guys that do the trading and teach them a lesson”
My retort was: “You cannot scare a twenty-something into following complex rules that are murky at best—that is equivalent to handling out assault rifles to 5 year olds and telling them you will spank them if they do something wrong”
My thought is that the answer is that made by a real expert sandy Weill —take the guns away.
@usedkarguy
No, i haven’t but i will, thank you, it has to wait till the morning, my spouse has threaten divorce if I don’t stop obsessing…
vegas, did you look in Maiden Lane 1? then off to the RESCAP filing.
@ALL
Geithner moves to eliminate community bank insurance program
“”Obviously ICBA was less than pleased with the secretary’s response to the question. What really infuriates me is that Treasury doesn’t bat an eye to dole out billions of taxpayer dollars to too-big-to-fail firms,” Fine said. “But when it comes to thousands of Main Street community banks who would pay for the program themselves, not one dime of taxpayer dollars, Treasury gives them the back of the hand.”
The Federal Deposit Insurance Corp., which guarantees checking deposits over $250,000 in noninterest bearing transaction accounts, and assesses banks to pay for the program, has not expressed a view on whether an extension is appropriate.
@dcb
Since all of these scandals have been making headlines, I haven’t seen the term “deadbeat homeowner” once, hopefully this term finally gets put to rest….but it is nice to see handcuffs coming up more regularly.
@dcb
it’s a first, no 2nd.
And the NV case is still going as far as I know, most recent press:
http://www.vegasinc.com/news/2012/jun/27/firm-named-nevada-robosigning-cases-countersues-ma/
witness dead—why nevada not prosecuting lorainne brown?
@dcb
i don’t know why they prosecute or don’t prosecute, unfortunately the ag doesn’t ask my opinion, but will talk to my lawyer, he talks to her office. thanks for the bony info, can’t get a loan schedule, cwalt 2005-66 pops up under freddie t-066, also no loan schedule, supposedly 4080 loans in the trust. i’m looking at bony site and “my trust” is part of the cwrmbssettlement. it was assigned after the proposed settlement. so much fun just trying to find out who is owed and how much, can’t get a straight answer or accounting. thanks for info.
i figured it would be—–bny apparentl wants distance from all this stuff–its coe business is as trstee for muni offerings and its bad to be screwing govt pensioers ergo increasing muni liabilities for underfunded pensions and also acting as trustee for investors in muni bonds that will not get paid because of pensioner liabilities—seems kind of circular doesnt it—–im wondering how as trustee for muni investors bny gets a big payoff out of muni defaults—probably next scandal on the horizon
@dcb
notary on nod is one of lps criminally charged by nv ag
the 1st or 2nd
i thought they were dropping that case after the star witness died suddenly–was there ever any exolanation?
@dcb
thank you, originator not in bk, trust is a cwalt
trust is a cwalt
?????
@dcb
yes, sorry, the trust is called cwalt inc, alternative loan trust pass through mortgages certificates series 2005-66
Bank of New York as Trustee for the Certificateholders CWALT, Inc. Alternative Loan Trust 2005-66 Mortgage Pass-Through Certificates, Series 2005-66
who was note payee –_______who is servicer——BOA?
@dcb
yes boa servicer, yes bony, i’ll look at papers to answer those questions. And will definitely look at bony stuff. thanks so much
your info should be under that trust on bny global trust records–at least were XMAS 2011–but tey were pretty pissed when i downloaded the files—–posted disclaimers etc—probably cant get there anymore
try though—BOA may help they are turning on each other—–one banks employees will tell you things about the others–ask boa about bny—u may be surpised–boa should answer your questions–bny should answer your questions as to ho the servicer is—i had a strange experience—bny told me it was boa —then i called boa and they disagreed –so back to bny and then they said another—–leads me to believe there were two line items for my acct–one in trust a one in trust b–good stuff to know unless you are afraid og multiple claims where they cant turn up the original note thru one trust–maybe the other has it?
I think they will drop the cases–they got the money and will make noise until election then drop it
As i keep saying the govts dont care about actually prosecting either fraud on investors or borrowers—–they realy dont—–as long as Obama thinks hes the banking industry fairy god mother and gheithner is sel appointed guardian of banks globally —-and bernanke thinks hes the tooth fairy—-holder and geithner looking at the help wanted pages—no action—-banks are just immune—and there may be some rationale there but why the non-bank collection agencies and their street thugs??????
Did you look up that trust to see if the loan schedule was filed? BNY is not too thrilled about fiduciary responsibility—–BNY Global Trust has records of BNY trust assets——-there are loans there that were liquidated 2-3 years ago–sometime multiple times—but its the trustee for most muni issues–and has only been sued by a few AGs for FOREX cheating of govt teachers and police and firemen pensions—so im sure everythinhg is on the up and up there–im sure those notes werent sold twice or anything
just be sure you get the verfied original back eventually and a surety if you settle—no promises from the trust or trustees—like grabbing smoke
@dcb
In our case the trustee for trust filed nod prior to recorded assignment to trust. Then the first recorded assignment to trust (6yrs after loan and trust cutoff date) then nod was rescinded and then another assignment was recorded to same trust.
i’m not quite certain what stage i am in at this point, but today i do not have nod filed against house.
thank you, i hope that is clearer.
@LV
I had same sequence except they just barreled thru with the foreclosure complaint with the original assignment sined by a convicted transvestite forger on behalf of mers—-july 2009—–when i made a fuss about the transvestite forger DOCX employee to their board etc—and they put it in their annual report at LPS—soon after the filed a motion to enforece settlement . “what settlement ” i said when i looked at the doc caption—in reading the motion which was under seal——it was a purported verbal agreement reached by my lawyer and opposing counsel whereby my atty allegedly agreed that i would convey a deed to the trust in exchange for…..well thats where the verbal agreement got fuzzy—–apparently as far as the servicer was concernd it didnt matter much what if anything i got—what was important is they got the deed and possession asap—oh and all in secret…..that was pretty important…..of course i never agreed to any of that BS and a verbal agreement is not enforeceable –statute of frauds—subornation of perjury–they subponoed my atty to testify on their behalf—these guys will give you a really wild ride if you are dealing with a private label type—–looked the world to me like syndicate attorney in chg—new jersey license –operating out of florida
FBI wont do anything until my body turns up riddled with holes
at any rate—-you need to challenge the fact of the trust—–a non-existent entity the assignee? a nonexistent entity presumably the noteholder——sure your facts same–was the original payee on the note bankrupt at time of assignment? you need to challenge all those things—–who knows whether they can release the note? if cant release note then cant release mortgage—gotta have note to have the nmortgage—-the mortgage has no separate existence from the note—authority of attys to reptesent the non-existent thing is 1st point to raise
not legal advice just–wild speculation???? get an atty and point em at the defiunct trust and tell em to pretend oits a fake corp–that will help them fit it in the right niches—its tough for defense attys—dice loaded against them
@dcd, patrick
“setup of the purported trust was substantially defective—eg no mortgage loan schedule filed as required —no mortgages conveyed to it -in thegiven time-frames—then the creature is not a legal trust with special privileges and immunities but is instead a default business association.”
How could a homeowner use this to their advantage? not in foreclosure, thank you in advance.
@LAS VEGAS
“How could a homeowner use this to their advantage? not in foreclosure,”
Would you restate the question—im not sure i understand? How to use this feature otherwise than in foreclosure? Meaning before foreclosure occurs? At what stage?
@DC
Excellent. Generousity appreciated.
@DC
“The bank that is the trustee was not part of the agreement–just the trust–and the trust is not registered to do business nor have assets or employees in your jurisdiction.”
So any secondary agreement with the trustee on behalf of the trust entered into after the debt is securitized may not be enforceable in the borrower’s jurisdiction because the actual counter party lacks the capacity to be sued in that jurisdiction and the hapless borrower, operating in an asymmetric information environment, is duped into giving up rights under UCC.
I can see that point however the other side of the coin would be that the actual counter party to the borrower’s debt can’t sue the borrower or have the trustee sue on its behalf if it also lacks capacity to be sued in the borrower’s jurisdiction.
So a trust’s lack of capacity to sue or be sued in the borrower’s jurisdiction, different from lack of standing, could be used as an affirmative defense to foreclosure of a securitized debt, no?
the other side of the coin would be that the actual counter party to the borrower’s debt can’t sue the borrower or have the trustee sue on its behalf if it also lacks capacity to be sued in the borrower’s jurisdiction
You would think—–however a national bank is not required–nor does state have poer to force them to register etc——so you may have a bank asserting a claim without the same sort of rules aplied as you might expect—but beyond that the states grant immunity to trustees acting in that capacity–so the trustee can sue in foreclosure but not be sued–the trust is not registered to do business—-
the weakness to the assymetry is if the foreclosure plaintiff is actually not a trustee nor trust——-thus if the setup of the purported trust was substantially defective—eg no mortgage loan schedule filed as required —no mortgages conveyed to it -in thegiven time-frames—then the creature is not a legal trust with special privileges and immunities but is instead a default business association. Under state law an unicorporated business association is a common law joint venture with an operator similar to a general partner –that would be the trustee bank and/or the collection agency—–the investors are de facto passive joint venture participants but cant be reached because they are either passive and/or have no nexus——its a tangle –the object is to get at the active operator
Under IRS reg 301, 7701 the joint venture is a business associatoion taxed as a corporation—thats why the banks wanted the REMIC rules to apply–there is little doublt about the status of the failed trust under federal IRS law—-if they did not meet SEC representations –did not file the loan schedule as reqired to give a trust a corpus—and existence–then no REMIC REIT or any special status—-default is corporation taxation absent partnership or LLC check the box
But the average business atty and litigator does not comprehend large joint ventures–cant imagine them to exist. In fact every oil/gas”unitized pool” is a large joint venture that has to very carefully set up the articles to avoid double taxation as a taxable association.
If you want to see the law on these look at joint ventures in texas law
A trust is a special creature which gets special treatment and when people ignore the formailities of creaton and peration they cant claim the immunities. People just are not attacking the factual question of the trust—just because the network atty uses the word defense attys just buy in and say oh sure im going to give you the benefit of the doubt–because i dont know what you are if you are not a trust—this is a combined standing/capacity issue.
Never waive facts bsed on what the opposition pleadings say–this one is particularly tricky because the allegation is encapsulated in the caption—-have you ever seen the trust issue pleaded as a fact? —or the capacity of the trustee pleaded as a fact?
im an old oil/gas tax atty—these things were supercritical to us. they affected liability for fedand state taxes–txs gross receitps taxes etc—–as well as liability issues
sure the investor attys have not flogged this because they aren sure where it leaves their clients—unfortunately most of the foreclosure law is eminating from investor lawsuits and being picjed up by forecosure attys——–and at this point what foreclosure atty wants to admit he waived the most simple claim snuck by him on boatloads of cases–that the entity suing had neither standing nor capacity–he just gave them a pass because trustthere was an SEC filing made thatr called the thing a trust–never getting onto the question–did the purported trust do what it was supposed to do to be a trust–and you wont see it come up until they start demanding immunity if you come up with a claim that exceeds the value of the house–or is after the house is gone
in effect even if by some strange quirk you have some control over the house after the trust takes title, hen you have an issue about who is passing title–imagine if 20% of the trusts were not trusts but something else—what happens to the title out? is it valid —if i run around saying im dave company and the title is in the name of dave co. and i never filed any corporate papers–can dave co make deeds out in its name—is that a hole or at least a weakspot in the chan
if not why do they always have representations that you are duly authorized to do business in that name and do the act you are doing?
If they made an allegation that XYZ is a delaware truste duly organized an acting in that capacity–the wasy lawyers plead –they would deny it–and then it would become a factual question and the claomant would have to show some proof sooner or later
by doing it as they are it is accidentally waived
i recently had opposing counsel attempt to do a name change in a re-trial conference–from a corporation to an LLC—seemingly a simple thing–except
@DC
So rights are fixed in any tangible medium of expression (the financial instrument) and a rival instrument cannot duplicate or supersede those rights. Has revised article 9 allowed for exclusive rights to be split apart from the tangible instrument and assigned separate and apart from eachother? In other words, has revised article 9 allowed for the creation of intangible derivatives that can be sold in secondary markets?
If yes, can derivative rights of a tangible financial instrument be assigned to a trust and become a fixed trust asset? And in that way, can the trustee take limited rights derived from a financial instrument for the benefit of investors? Lastly, is this a back door way for a note owner to tender the intrinsic value of the note without actually transferring the tangible instrument to a successor?
Offtopic–but a little something nagging at UK——RBS Royal Bank of Scotland went hog wild building up its investment banking ops aka casino in mid 2000s—–bailed but so bad that govt still has 85% prefered—–so the bank spent no money in like 10 yrs on the old fashioned bank part other than taking deposits and borrowing from Central Banks to go to the track with—-result is that banking functions largely collapsed a month ago and continue to malfunction—–company payrolls lost between company and workers–checks dont clear—and here is the thing to focus on—you cannot go and withdraw cash beyond emergency small amts—so i dont know how people buy food even if tey go to work every day—which reminds me a bit of soviet union in 1989. My guess is the foreclosure process has speeded up.Would be interesting factoid to know?
http://www.bbc.co.uk/news/business-18575932
This is what joinder of bookie operations and banking-loanshark accomplishes—this is the end result–no hypotheticals–no guesses–this is it.
@PATRICK
That constitutes a long list of very complex questions to state the obvious. I believe it goes beyond UCC and basically gets into the realm of what can imaginations dream up. With respect to the back door stuff—I would hazard to guess that if we sat down with specific facts and spcific objectives, we could design a set of contractual terms that would accomplish the stated objectives. This is made a whole lot easier if we can go do this on the beach in the Cayman Islands etc—-ie forum shop to avoid legal limitations that might be imposed by state or federal law–or any developed country law.
i practiced a fair amt of offshore finance stuff——i spent months and over years availed my client of the opportunities afforded by treaties between developed countries and loophols left in LDCs. Shopping for tax havens —etcetc
Taking a deduction for insurance payments in the UK to a bermuda affiliate, then loan the money to a caymani finance co—which then lends it back to the UK sub—and that allows more deductions in future for interest pmts —–eg—-its not always an exercise in futility to take money from one pocket and place it in another.
Now what I just described should be taken to heart for two concepts: the risks of territorial income taxation [as was UK] and espoused by Romney etc
The 2nd is the extraordinary riskiness of having large capital pools controlled out of offshore locations but doing business in the US.
I think it is safe to say we could do pretty much whatever you wanted in your examples if we can operate in that pirate-like environment. The main thing we need is the lets say “host” country [im thinking in terms of parasites and hosts upon which they feed] to actually enforce the terms of our offshore contracts—–that they will enforce deals that are intrinsically illegal if made in the host jurisdiction —but not illegal if made outside—but it does me no good to make a deal with you —legally enforceable in panama but which is not enforced in iowa–if that is where the subject matter of the deeal is.–eg a house to be siezed.
So sure we can make bets based on what is going on with a plain vanilla securitized UCC conformed promissory note. Under insurance law you have to possess some economic interest in something—performance of contract or life policy—–but that does not apply when you are talking about swaps CDS——-or other derivatives—any more than we have an interest in a racehorse —no its just plain slot machine gambling–using real world events as triggering mechansims.
The trick is to find a host to our parasitic activities that can be confused into thinking we are legitimate—that a bet is insurance for example.
So if i follow your train—-what you want is a system whereby we contract that the mbs holder waives his right to collect of a mortgage note —and turns over that right to collect to somebody who say possesses a contract with me ——such that if some other event happens the contract right transfer is triggered. I do not see any reason why i could not create such a contract—excet for the ability to enforce. The UCC and foreclosure rules—-etc have a design that is supposed to strike a fair balancebetween the public interests including the basically helpless consumer—vs the ability of unscrupuous players to set up contracts to do virtually anything. So the issue is whether the unseen contract is enforceable as a legal contract in the jurisdiction where its execution is sought to be enforced and whether its in the public interest–actually two sides of the same coin. If a couple crooks sit down to cut a deal involving an obligation you owe and they of course only address their own concerns–and deviate substantially from the well worn path of the UCC—their interests to be sure will be covered but you may end up owing both of them if they do not provide for the UCC sanctioned releases etc. Thus it is very dangerous to enter into a settlement contract that may waive your rights to the basic UCC rights and leave you at the tender mercies of the crooks
and that is where we are today. In order to get relief from a deficiency–you enter into a settlement agreement to give a DIL and promise silence etc—but you may be committing suicidein so doing–because neither the contract itself nor the execution can be expected to incorporate any sense of good faith bargaining nor fair dealing. the settlement may on its face be a deception in that te other party may never have intended to carry out any of the promises—but if they get the DIL and can pass it off to a bona fide purchaser then they are free ti breach the terms and you have little recourse but to sue for breach at which poit they will argue that the “trustee” is immune from liability under your state law—the bank that is the trusteewas not part of the agreement–just the trust–and the trust is not registered to do business nor have assets or employees in your jurisdiction –so even if they admot the deal was breached, you may habve no real remedy
This is what the Consumer Protection group should be focusing on today—people are being defrauded of the value of notes every day by hundreds if not thousands—the houses are gone but the debts remain
@dcb
“…the basic trust law requires the filing of a Schedule of trusts assets—if they are not listed–there is no trust—-this has huge implications–who sues you in foreclosure–who takes title to the houses —nonexistent trusts”
Exactly. In my case—which I’m sure is also for millions of others—my docs say:
United General Title Insurance was original Trustee.
MERS was original beneficiary (as nominee for now defunct IndyMac…OneWest was the entity taking my payments).
Deutsche (as Trustee of the MBS) is present beneficiary.
new Trustee under Deed Of Trust is Aztec Foreclosure Corp.
On the Trustee’s Deed Upon Sale it says that Aztec Grants and Conveys title and interest (to the real estate investor who bought it).
The Trustee’s deed Upon Sale says “Lawyer’s Title” on the top…(written in scrawled handwriting.) I guess that’s the title co?
I think tnharry said—basic trust law says you can’t be the Trustee of the MBS AND the beneficiary…but—like you say, if the trust is non-existent—which it is—then the debt collector/servicer is the entity taking title…at least they are the ones keeping the money from the “sale”.
Grrrr.
@CARIE
The trust stuff was a charade at best even in the beginning–to get debt off big bank balance sheets then the idea was hijacked by private labels–iv looked at real bank originations and they followed the rules cause they did not want the debt and mortgages put on their sheets—but the fly by nites did not bother because they knew they were going to engahge in predatory everything and so only would last 3-4 years–before the irs auditors got to them–those are most likely to have unfiled trusts and basically the trusts are just names used to intimidate you and to try to procure state law immunity typically afforded trustees ——if you set up a counterclaim–they will come back at you with thetrustee immunity statutes—but in many cases its bogus—but dependends if they tried to comply
You have an acute understanding of things and sometimes convolute subject matter … that’s all. You say waterfall …that economic goodwill that all. Of course they tranche but the waterfall at 10 times the earnings is a separate high risk and uncalled for abusiveness subject practices .
It’s all about what Barclays was busted doing. Cornering the cost of LIBOR ahhh I don’t think so.
This was all about cornering the short term commercial paper market and rolling 30 year mortgages written at 10 yr IO into good will and taking the basis or financing used to wire each loan and converting it into 30, 60 and 90 day commercial paper.
You’re woefully wrong to surrender here. Get off this site and get on to some more esoteric counting sites and see what’s happening to homeowners. By the IASB’s own admission – this is capitation by a government that is punishing the title holder for Borrowering its tile and squandering the mortgage away to a bad market timing event.
If they took mortgages and treated it like a sausage factory, nothing went to waste.
There are no mods …not without refunding the loan first
That finds title sequentially convoluted and exceptionally complex under the existing accounting framework and regulatory banking scheme.
ID_accounting@yahoo.com
“see what’s happening to homeowners”
thats an interesting concept—-i think i have a fair idea about what is happening to homeowners, and pensioners as well—-im really much more interested in what happens to the collection agency and servicers at this point— rather prosecute —thats the one aspect of law in my 35 yrs i havent quite gotten to
but the spanish 10 yr hit 7.7 % today—and italy 6.7 —-rising geometrically—-which means tomorrow absent massive intervention they will break 8 and 7——–5 trillion to deal with—–and i cant see how us fed reserve can do much about it—sure it can hold the marjket up arbitrarily but the blue chip oils have disconnected from the spot price 1st time iv ever seen –in just the last few days—looks to me like everybody is battening down the hatches
yeah maybe there iis a site that is talking about what the rates will be tomorrow—i see no drop in futures tonite and i cannot understand it–i do not know of a day that even looks near this bleak since last november before ecb dumped 2 trillion onto the water–and is bought 6 months—the hedge funds made the call this weekend past—-and they have been dumping since sunday nite in asia—are you from china or korea?
The REIT structure is the trust you talking about. This massive tax shelter occurred for reporting purposes.
Banking and non banking affiliates conveyances and transfers into investors paid in capital held in the indentures corpus.
Then the depositors pledge of what I consider a wire alternative for far greater consideration – AAa Aa rated trust certificates and the pledge of securities to accrete bond construction
These reverse purchase and sale methods for mortgages calculate the normal performance of a mortgage in reverse. So it primarily is was and is again a forward looking investment that ripened with age.
Theses deals could not sustain any significant prepayment speed. Arguments are the deal model was based on a FV that relied on a robust condition . . .
and Mers Corp to delete and substitute in the new for old . . . as if this scheme could survive scrutiny as a never ending warehouse line. (which it was of course) .
For , “…there are two ways to be fooled. One is to believe what isn’t true; the other is to refuse to believe what is true.”
― Søren Kierkegaard
but the 3-5 yr cliffs forced prepmt–the investment bankers knew that there was a lot of front end loading going to occur–the arm loans as well as the trst structures were obviously designed to fail on the private lables and they sure look cookie cutter boiler pate to me
the moodys reports on the nasty private labels showed a fast decline—-the rest of what you have written i understand and toalay agree for what thats worth—frankly though—like schneidermans crew—-we are talking about how the titanic got holed and academically discussing the legth of the gash—when in fact the ship is about ready to break in half
The cash flows paid by the homeowner pursuant to the terms of the promissory note supposedly go to the servicer thence to the indenture trustee in the aggregate.
** not true; no servicing in a de recognition deal structure
hence to the indenture trustee in the aggregate.
** You mean recognition triggered by prepayment trigger – right , of course
The MBS electronic “notes” constitute a completely separate set of obligations with varying priorities and maturities —created pursuant to and described by the indenture —––but the indenture creates priorities for the senior classes that pull cash flow away from the initially dedicated groups——a waterfall effect.
** A senior sub structure is kind of “moot” relative to a conversation for economic goodwill
that allowed the securitizers /investment bankers to confuse mbs buyers—the crappy arms etc were stuffed in the group 1 mortgage loans and failed aap—and class III etc MBS [typically domestic pension trusts] ceased receiving cash pmts—their receipts were reallocated to the class I seniors –typically far eastern investors.
** you talking about the obligors ability to make debt service against assets held as escrow accounts. There is no servicing in a divestiture of assets deal structure.
$100,000 mortgage
10% Coupon
$10,000 annual
10 Yrs Interest Only (ARM is Moot)
Payoff demand -Yr 5 150,000
Requirement:
Mers Corp to Substitute and delete
Yr 6 – Yr 10 Term to roll over the 5 Yr bond
This is why dependency on robust condition is synonymous to a Ponzi
ID_Accounting@yahoo.com
If you get this right, I swear, there are no counter-argument to overcome the false claims brought in a forelosure
Only an attorney can provide you legal advice . Consult an attorney before making any decisions concerning our property rights. This is for informational purposes only.
DC
You have your hash and mash mixed up here . We are talking ABS and the second note ….not mortgage backed securities investors .
@NOMODS
I looked at the string and reached two conclusions
1) I posted too damn much on notes and securitizations when we are on precipice of global financial collapse looking at spanish and italian 10 yr bonds and
2) I have no idea what you are talking about at any point—my ignorance–im sorry
Patrick – you familiar with copyright laws…..
Part “A” a tax payer coporation formed as a REIT and funds loans through party “B” an FDIC Member Bank. Party “B transfers to Party “C” under article 9 as possession is perfection. Party “C” is a LLC and TRS who Sells to “D” the securities registrant as outlined in the Mortgage Loan Assumption Agreement.
If anything to hold as a claim…and if Soliman were wrong, which he is not…how did “C” SELL the loans that are held in ownership Party A” . and possession by “B” under the law fo bailment?
NG Said . The first offer to modify is the one the bank steers people into which merely puts off the inevitable foreclosure and where you waive all your defenses, of which there are many more than you might think.
According to M. Soliman , its according to GAAP ASC 320 and old FAS 140 for divestiture of assets . This is to trigger the right of redemption for a negative pledge of an asset as collateral for a 5 yr bond that is offered in pledged to a foreign national bank (Duetsche Bank HSBC etc) and yes, is of no real value as a modicifation.
NG never says Why, why are they doing what they do!
ID_Accounting@yahoo.com
typically the transactions are spelled out in the securitization docs in order to APPEAR to conform to the offbaance sheet rules in the FASB and IRC REMIC –ie trusts that are not treated as taxable business associations under IRC reg 301-7701
But it was simialr to witches waiving magic wands—–actually the lemnder swept up the closing docs and dumped em in a warehouse—-the various trustees in mame only and do not even accept responsibility as fiduciaries now
see:,a BNY global trust site disclaimer on thei site in Feb 2012:
“IN NO EVENT WILL WE [Bank of New York Mellon Corporation] BE LIABLE FOR ANY DAMAGES, LOSSES OR EXPENSES, [of investors] INCLUDING WITHOUT LIMITATION, DIRECT OR INDIRECT, SPECIAL, INCIDENTAL, PUNITIVE OR CONSEQUENTIAL DAMAGES, ARISING IN CONNECTION WITH THIS WEBSITE, THE USE HEREOF OR RELIANCE ON ANY INFORMATION CONTAINED HEREIN, EVEN IF WE KNEW OF THE POSSIBILITY OF SUCH DAMAGES, LOSSES OR EXPENSES.” [Insertions added.]
@ DC
“a debt obligation is a financial asset—–to the owner—it is an obligation to the maker of the note–the obligor.”
A debt obligation is a financial asset to the owner under what financial instrument?
I was asking if two competing financial assets (lets call them financial instruments) can confer contractual cash flow rights to a receivable of the same debt obligation.at the same time.
If the answer is no then in the context of debt securitization, have mortgage backed securities investors purchased contractual control of the lender’s cash flow rights or does the payee of the note retain contractual control of that right?
It is my understanding security investors don’t receive distributions based upon payments made to the ultimate note payee but rather directly own and control the lender’s contractual right to the cash flow derived from the loan obligor’s periodic payments.
Asked another way, what financial instrument represents, evidences, and confers the lender’s contractual cash flow rights and privilages to the loan obligor’s periodic payments when the mortgage debt becomes securitized?
@PATRICK
” I was asking if two competing financial assets (lets call them financial instruments) can confer contractual cash flow rights to a receivable of the same debt obligation.at the same time”
This is sort of a law school type question. or one of those brain teaser questions—-Through the use of the term “competing” and “same debt obigation” but two instruments— i guess you are trying to get an unreserved “no”——but im struggling trying to make sense
is it possible to have exactly the same rights to a note—–yes–if they are issued at different times with result being a struggle for priority. Eg Company A has a receivable for 100 from B for sale of widget x—-A sells the receivable to C by a transfer of ownership of all benefits and burdens of ownership evidendenced by a written description of sale which is made on a Saturday of a 3 day weekend when A knows B is out of town—–A is not subject to any duty to repurchase the receivable under any circumstances—this is a sale to C but C does not make a filing under UCC with Sec State and nobody communicates anything to B.
A on Sunday executes an assignment of the same receivable to D as security for a loan
Or if you like A uses exacltly the same form to sell the receibale to D except that this contract has an addendum that requires A to repurchase the receibable if it is uncollectible by D. [D had an atty and B did not]
does this fit?
—2
I was asking if two competing financial assets (lets call them financial instruments) can confer contractual cash flow rights to a receivable of the same debt obligation.at the same time
Maybe I missed the “same time” condition in the earlier answer: So how about if A sells b the basic receibale balance–and sells to D any interest that accrues?
in the context of debt securitization, have mortgage backed securities investors purchased contractual control of the lender’s cash flow rights or does the payee of the note retain contractual control of that right?”
Assume that the MBS investors are beneficiaries of a trust. The loan originator-ie nominal lender/payee on the homeowner promissory note supposedly transfers its interest in the note to the trustee for the benefit of the MBS investors. Typically the payee tranfers the interest in the note to a trust grantor aka depositor. The depoistor transfers the note to the indenture trustee. As a negotiable instrument the note is supposed to be indorsed at each of these steps however it can be indorsed in blank by the payee and later the trustee is inserted in an indrsement —seemingly even after the payee is bankrupt. this does not seem appropriate –the authority to make the indorsement seems questionable—-but iv seen this practice and the attys for the collector ignore the rules with impunity
“what financial instrument represents, evidences, and confers the lender’s contractual cash flow rights and privilages to the loan obligor’s periodic payments when the mortgage debt becomes securitized?” The homeowner promissory note.
@PAT
” It is my understanding security investors don’t receive distributions based upon payments made to the ultimate note payee but rather directly own and control the lender’s contractual right to the cash flow derived from the loan obligor’s periodic payments”
I dont think so. The cash flows paid by the homeowner pursuant to the terms of the promissory note supposedly go to the servicer thence to the indenture trustee in the aggregate. The MBS electonic “notes” constitute a completely separate set of obligations with varying priorities and maturities —created pursuant to and described by the indenture —–eg there are Group 1 mortgage notes which generate cah flows dedicated to Class I MBS “notes” —the groups of mortgage notes and classes of MBS notes can be analaogized to a ladder. On day one–Group 1 pays Class I———–but the indenture creates priorities for the senior classes that pull cash flow away from the initially dedicated groups——a waterfall effect. that allowed the securitizers /investment bankers to confuse mbs buyers—the crappy arms etc were stuffed in the group 1 mortgage loans and failed aap—and class III etc MBS [typically domestic pension trusts] ceased receiving cash pmts—their receipts were reallocated to the class I seniors –typically far eastern investors
Yes carrie, even Mark Terbeek only wanted to get us a modification and looked at us like dead beats and all we want is our property rights and make the banksters accountable for the fraud upon us and the investors
The note is accrued in a forward manner over 10 years as to prepayment speed. The deed is converted to a zero coupon bond. The bond is a negative pledge. Here are the two notes. The Neg Pledge is made to a foreign national bank. If you discount a bond at 10% for 10 years that yields a 10 % coupon. MSoliman told you people this for four years and you kick his testimony to the curb. So go on ..NG …keep on guessing.
could you amplify on this–i can understand what you are getting to–i dont know soliman
THIS MAKES SENSE….BUT
@bijaya
What happened to you is what I saw coming—and that’s why I didn’t do it.
California is hell for homeowners.
If it all comes down to the judges “whims”—and they DON’T CARE about us.
to all:
lots of good information here but a little confusing.
Carrie BK 7 discharges all debt 13 is the reorganization and actionable.
in CA i am trying one more time to file to protect my property right stolen by a false credit purchase and now sale by them to another after declaring them unsecured in BK7 and filing homestead papers in the BK7, they still won a UD action and evicted us with false documents (judge said he will use presumptive evidence and their sworn testimony and was not going to rule as required by 764.010) for non rental payment or lessor payment, ha
any ideas
any lawyers ready to help, can not find a one willing to fight
pledged to a trust is one thing, kicked out and sold to junk debt buyer is another…
thanks for that concise description, David.
send me your e-mail I’ll send you my case info.
usedkarguy@yahoo.com
cutting through the fog on August 7th, Eastern District WI
I plan on having that alleged Note tested very soon. Trying to cover all the bases. Thank you for that.
DCB…. Very well explained! What would be the potential threat for a homeowner whose note was not registered electronically or manually with the SEC but whose mortgage was assigned to MERS? Isn’t it a requirement that the note be registered with the SEC before it can be securitized?
It is more than SEC rule——the SEC rules require that a mortgage loan schedule be filed ——-yes—and the indenture and PSA will also represent that the schedules are in fact filed as eg EXHIBIT A OR B—-but when you look for that exhibit there is nothing there byt the header
“EXHIBIT A : Mortgage Loan Schedule” then blank where there should be 17,000 lines of print—-see American Home Mortgage 2004-4 for example—-
the docs also represent the same filing in the Delaware Sec State UCC financing statements—-you get the filing and it also refers to EXHIBIT A OR B “Available on Request” [of whom?]
The IRC REMIC requirements manadate the lists also
the basic trust law requires the filing of a Schedule of trusts assets—if they are not listed–there is no trust—-this has huge implications–who sues you in foreclosure–who takes title to the houses —nonexistent trusts
When I was first served with the complaint, I did in fact pull the sec filings for the trust, prior to discovery and have loan schedule. I won’t post the outcome, but three years later, Plaintiff is not relying on assignment of mortgage any longer to the trust (fabricated) but is now claiming to hold a negotiable note. (of which there are issues regarding the alleged negotiable note/of a bankrupt originator).
How can the court continue to let these fraudsters get away with making claims and causes in pleading and then switch their plan of attack at summary judgment where they were denied and trial is scheduled???
@MARY
Re Note
I wouldnt get too hung up on negotiability issue–its hard enuff getting courts to understand securitization and UCC.
Thequestion is whether it is possible for a bankrupt entity’s agent to indorse a negotiable note after the bankruptcy filing. Seems that at least the agent lost authority under any POA at time of bankruptcy filing and the BK trustee would have to adopt that agency as a continuing power so that would be on a the BK record somewhere—needle in haystack for you to prove its not there–always hard to prove the negative—in bk its terrible—-who can testify its not there?
but as bad—do not assume that any paper the present is in fact the “original” and it absolutely must be–and at the end of the day you must have it in your hands—you cant rely on the trustee promise—they start backpeddling on promises as soon as they get the house
you have to assume they are absolutely willing to commit perjury =—–they will have excuses–the atty will say “i dint know” and the person who made the representation will be long gone–and in a foreign jurisdiction–triustees are usually immune from suit -its important whether it is a trust or not because of the immunity
Patrick: Are you trying to ask : If the note was claimed to be securitized, how can they be claimed to be a negotiable instrument/bearer paper (since Plaintiff fails to prove it is in a securitized trust).
@MARY?PATRICK
“Patrick: Are you trying to ask : If the note was claimed to be securitized, how can they be claimed to be a negotiable instrument/bearer paper (since Plaintiff fails to prove it is in a securitized trust).”
If that is the question–and its easy to understand the confusion-[-it was intended to confuse and has worked well for several years that way]—-assume you get a batch of notes naming the originatr as the payee [pretend they are checks] —and the payee is the sponsor of the securitization process [simple case] —-the payee employee stamps “pay to bearer” and/or simply stamps the payees name on the note by X VP of payee—[seems like usually this is done by illegible named persons acting in uncertain authority] —-keep thinking how you would indorse a check—
then you the originators indorsing VP hands the stack of indorsed in blank notes along with the rst of the original loan file closing docs to the supposed trustee/custodian to for the trust documents for that party to verify that the note is actually there—actally signed by the homeowner maker etc—–then that custodial trustee certifies to the indenture trustee that all is good——-the trust has received the loan file and note and it matches the mortgage loan schedule
if you spend a few weeks poring through the securitization docs you will see that is what was supposed to happen
however in fact—-seemingly that did not hapen for the private labels like American Home mortgage group–option one etc etc
instead apparently the files were shipped to the originators warehouse—and nothing but lists of data were communicated to the trustees from the originators–and the trustees allowed the originators to self-certify that they had done everything per the securitization documents—maybe with an actual letter delegating authority to do this on behalf of the bank trustees
when the loan files were received at the warehouse–they were bar coded–ie the docs were stamped–the note was stamped with a barcode that was used to keep track of what trust the note was allocated to—-a note that has no barcode probably was sold a couple times and the warehouse-operator originator did not want to assign it to one or another of the double dipped trusts—
this was the heart of the fraud on the investor pension funds—if the note was bar coded —-if the note was listed on a mortgage schedule filed with SEC and Delaware UCC—then it would be a lot more likely that somebody might discover the loan was on 2 or 3 or more lists—the bar code would have limited flexibility to commit fraud on investors
a collateral effect is that the homeowner in such instances cannot go pull up the SEC online and check to see if the trust that is suing for foreclosure actually had the loan on its mortgage loan schedule—-the investor fraud has the side benefit for servicers/debt collectors to sieze a house for one trust based an the naked claim “I ABC trust am holder of this note” —and then later come along 3-6 yrs later and tell the hapless homeowner ” I XYZ trust am the holder of the note” —and demand payment—
the only defense on the 2nd go-around here is if the hapless homeowner can pull out the verified ORIGINAL NOTE marked paid in full by trust ABC properly appointed agent—–and waive it
at the 2nd claimant—
if the 1st claimant trust is really reluctant to be involved in the foreclosure–and all you ever see is servicer signed docs–there is probably a good reason–not administrative–but probably the trus did not have exclusive claim to that note which was probably sold 2-3 times
i do not know of case law that attempts to unscramble a fraud such as this–i suspect these cases will arise in a couple years as soon as the original siezed property action has had a resale to a sucker that thinks shes getting the property clean—-the 2nd claim on the maker years later can then proceed and the 2nd trust/servicer can press siezure of the original homeowners IRA—–insurance policy–whatever is left—maybe even slap the buyer of the home with a claim to squeeze some loot——these 2nd line collectors will be worse than the 1st ones—-
they will even try to reinstate debts discharged in bankruptcy—this all seems grossly unfair and it is –but this is what frauders do for a living—and what govt regulators were supposed to stop—-when they allowed securities offerings to proceeds without mortgage loan schedules filed with SEC —they allowed this to happen–they allowed this future mess to occur–and the regulators dont see it as a problem because —well—if you cant pay your debt you are a deadbeat and should file bankruptcy and then you dont have to worry about multiple old claims—
@ALL
Postscript to my preceeding post
The failure to file mortgage loan schedules as part of the required public-view SEC securities filings for the securitized trusts constitutes the basic systemic failure by govt that allowed the investor fraud to occur in two ways: the investor could not excercise due diligence to see if te loans on the properties at the listed address were realistc—–and the investors could not double check to determine if the same loan was sold to multiple trusts by a single servicer-originator [private label] —-down the road this enables multiple debt collectors to pursue homeowners on the sama note by relying on loopholes in the UCC —–
The SEC had a rule in place that REQUIRED securitizers to make electronic filings of these lists—and made express waivers for the benefit of the fly-by-nites–so they could separately file “manually” paper lists—huge files that were to be scanned by SEC —–easily observable by their size on edgar—
But SEC after giving the waivers–either intentionally or negligently did not follow up to see if the manual filings were actually made as represented in the SEC filings multiple times
as late as 2009 SEC was attempting to conceal/cover up this issue by removing all manually filed lists from its edgar database——-thus you now cant go determine if a manual list is filed or not without a FOIA—-by my surveys–before SEC actively covered up its role in this insidious activity, about 60% of the worst private lable securities had unfiled loan schedules
the intitial mistake –or corrupt activity was bad enough —but the cover-up is inexcusable——-along with some of those private lable frauders—there should be some SEC staff questioned—and assets reviewd for bribes
@ DC
So two competing financial assets can confer cash flow rights to the same debt obligation? Which one is it? The note or the securities issued to investors? I was under the impression that the investors directly controlled the rights to the loan’s cash flow, not dividends paid out by a note owner.
@ PATRICK
I honestly have no idea what your question is. Please restate with a hypothetical or some manner to claify?
An owner of a note is entitled to payments of “interest” –not dividends
dividends are paid on common and preferred stock–equity
a debt obligation is a financial asset—–to the owner—it is an obligation to the maker of the note–the obligor
@enraged
our first payment went into suspense account.
@ dcb
thanks for the explanation, my spouse asked me a question:
what are the offset damages to homeowner? we are trying to figure out what the heck we are fighting for.
@LV—I cant say i recall what you are thanking me for—-and i cant guess what you are fighting for—-if you are in possession of a house–a few months more possession unless you are trying to modify—–but from what iv seen the mod stuff is touted far and wide for a few months bed=fore election—then disappears asap after—and this time worse—Romney would reinstitute debtors prison even if he has to ask fed to print the money to pay mits contributors to build and operate it–and obama wont much care at all if he wins re-election—hell immediately begin work on his post retirement speaking engagement materials—while he still has govt paid speach writers—-that will be supplemented by several books–with ghost writers—-
Romney will probably do a sale/leaseback of the Whitehouse—and just sell the capitol bldg to a chinese tourist attraction operating company— $20 bucks per head for a tour—with genuine imitation made in china lifelike action figures —filling the chambers and actually sitting in the nice offices
Either obama or romney can just send congress home permanently and tell em from now on they can just go to fundraisers and county fairs —run for reelction full time without the need of those unpleasant trips to DC —there are only 12 that even pretend to vote now anyway—–they can do hearings by 3D projection images—just so we can keep a couple TV channels with Washington Today stuff for the old folks like me that like to pretend occasionally that Congress is still there
they really need to quit shooting those images of the guy up front and the one at the podium—–and panning the empty chambers—it ruins the illusion
But meanwhile in a courtroom near you ….
The production of the note by the plaintiff gives rise to the presumption that it has not been paid and that it has economic value on the books of the note holder.
Discounted note = selling note receivables prior to maturity. Each month a receivable matures and payment is due and owing.
A discounted note is non negotiable. Don’t let the blank endorsement fool you.
The receivables were sold without recourse prior to maturity whereby the seller derecognized (removed) the receivables (the liability) from its balance sheet ledger when its payments rights expired.
The purchaser recognized the receivables as a distinct asset and measured them at fair value. (later assigned into a pool of like kind assets for securitization)
Balance sheet 101 Assets = liabilities
And so the discounted note equals zero on the balance sheet when the corresponding liability was removed (receivables sold) and has no economic value on the books. You can’t own zero and zero can’t be transferred to a successor.
A lien attaches to the note only so long as it retains economic value on the books of account. A paid off note is not subject to the lien and a satisfaction of mortgage should be recorded. Likewise, a discounted note, where the receivables were sold, is treated the same way on the books as if it were paid in full by the note maker. In both instances, it is worth zero.
A seller of note receivables can’t own the note. It is an impossible bookkeeping feat. But, the seller can agree to collect the receivables on behalf of the ultimate purchaser for a nominal fee and retain possession of the worthless note for convenience.
Lender = note owner
Isn’t it the lender whose required to give notice of acceleration? How on earth can a worthless note be accelerated?
@PATRICK
Are you intentionally trying to confuse people or are you simply that confused yourself. you mention 101 acctg—what exactly is your background: foundation to make these comments. Or rather are they a series of questions?
There is a financing device used by a great many real businesses. it is called selling receivables. If company A makes a hundred widgets and sells them to company B for a payment of $100 payable in 60 days—and this is a recurring orde ie 100 widgets/month ———–then company A has about $200 tied up indefinitely —and must figure out how to get the “negative float ” back to pay for the materials and labor to make the widgets
Thus in addition to inventory financing, which is a bit less secure to banks than an actual earned IOU——comany A sells the receivable to BANK X [assuming the CEO of Bank X can be pulled away from the casino long enough to do normal bank business—-thats really what banks are supposed to be doing] —-Company B may not be aware that the receivable was sold by A——B really doesnt care—he makes the payments as required to A which immediately pays it over to X
there is nothing odd about this–it has been going on since at least 1980——it is shown on a UCC filing—–the receivables certainly have value—-and if B does not pay–then A sues in his name for the joint acct of A and X —because usually A guarantees the collection one way or another
There were two loan closings when you closed — one which you knew about where a “naked nominee”with no money, no authority and nothing to do with the transaction rented their name to Wall Street to play the part of the lender and named on a note as the lender and named on the mortgage as the lender protected by the collateral of the house.
@MASTER>>>>
Just out of curiousity what time zone are you in?
From Dr. David E. Martin, Founder and Chairman of M.CAM Financial. Criminal investigations and guilty pleas, in addition to fines and fees. It has been ongoing behind the scene. It will not stop there.
http://futureshapers.ning.com/profiles/blogs/bernanke-v-paul-title-bout-pay-per-view?xg_source=activity
This past week we have seen an expansion of unfathomable crimes being ‘uncovered’ long after their effects have wrought great damage on the General Public. While I have, for years been commenting on the massive abuses in the municipal bond market – abuses which undermine every pension investor in the United States and many around the world – the U.S. Department of Justice has succeeded in getting 13 guilty pleas from muni riggers at Bank of America, JPMorgan, UBS, Wells Fargo, and General Electric resulting in a reported $700 million in restitution and penalties. And now, this week the Justice Department announced an indictment for wire fraud and conspiring to defraud the United States against Bank of America’s municipal derivatives desk former executive Phillip D. Murphy who allegedly played a key role in rigging the price of funds for things like building schools and roads.
It’s starting… Coming really, really soon, at a theater near you.
Prosecutors, Regulators Close to Making Libor Arrests
Exclusive: Prosecutors, regulators close to making Libor arrests
REUTERS http://goo.gl/tgLs1
By Matthew Goldstein and Jennifer Ablan and Philipp Halstrick
Sun Jul 22, 2012 12:18pm EDT
(Reuters) – U.S. prosecutors and European regulators are close to arresting individual traders and charging them with colluding to manipulate global benchmark interest rates, according to people familiar with a sweeping investigation into the rate-rigging scandal.
Federal prosecutors in Washington, D.C., have recently contacted lawyers representing some of the individuals under suspicion to notify them that criminal charges and arrests could be imminent, said two of those sources who asked not to be identified because the investigation is ongoing.
Defense lawyers, some of whom represent individuals under suspicion, said prosecutors have indicated they plan to begin making arrests and filing criminal charges in the next few weeks. In long-running financial investigations it is not uncommon for prosecutors to contact defense lawyers for individuals before filing charges to offer them a chance to cooperate or take a plea, these lawyer said.
The prospect of charges and arrests of individuals means that prosecutors are getting a fuller picture of how traders at major banks allegedly sought to influence the London Interbank Offered Rate, or Libor, and other global rates that underpin hundreds of trillions of dollars in assets. The criminal charges would come alongside efforts by regulators to punish major banks with fines, and could show that the alleged activity was not rampant in the banks.
“The individual criminal charges have no impact on the regulatory moves against the banks,” said a European source familiar with the matter. “But banks are hoping that at least regulators will see that the scandal was mainly due to individual misbehavior of a gang of traders.”
In Europe, financial regulators are focusing on a ring of traders from several European banks who allegedly sought to rig benchmark interest rates such as Libor, said the European source familiar with the investigation in Europe.
The source, who did not want to be identified because the investigation is ongoing, said regulators are checking through emails among a group of traders and believe they are now close to piecing together a picture of how they allegedly conspired to make money by manipulating the rates. The rates are set daily based on an average of estimates supplied by a panel of banks.
“More than a handful of traders at different banks are involved,” said the source familiar with the investigation by European regulators.
There are also probes in Europe concerning Euribor, the Euro Interbank Offered Rate.
It is not clear what individuals and banks federal prosecutors are most focused on. A top U.S. Department of Justice lawyer overseeing the investigation did not respond to a request for a comment.
Reuters previously reported that more than a dozen current and former employees of several large banks are under investigation, including Barclays Plc, UBS and Citigroup, and have hired defense lawyers over the past year as a federal grand jury in Washington, D.C., continues to gather evidence.
The activity in the Libor investigation, which has been going on for three years, has quickened since Barclays agreed last month to pay $453 million in fines and penalties to settle allegations with regulators and prosecutors that some of its employees tried to manipulate key interest rates from 2005 through 2009.
Barclays, which signed a non-prosecution agreement with U.S. prosecutors, is the first major bank to reach a settlement in the investigation, which also is looking at the activities of employees at HSBC, Deutsche Bank and other major banks.
The Barclays settlement sparked outrage and a series of public hearings in Britain, after which Barclays Chief Executive Bob Diamond announced his resignation from the big British bank.
The revelations have raised questions about the integrity of Libor, which is used as benchmark in setting prices for loans, mortgages and derivative contracts.
Adding to concerns are documents released by the New York Federal Reserve Bank this month that show bank regulators in the United States and England had some knowledge that bankers were submitting misleading Libor bids during the 2008 financial crisis to make their financial institutions appear stronger than they really were.
Among other details, the Fed documents included the transcript of an April 2008 phone call between a Barclays trader in New York and Fed official Fabiola Ravazzolo, in which the unidentified trader said: “So, we know that we’re not posting um, an honest LIBOR.”
The source familiar with the regulatory investigation in Europe said two traders who have been suspended from Deutsche Bank were among those being investigated. A Deutsche Bank spokesman declined to comment.
The Financial Times reported on Wednesday that regulators we’re looking at suspected communication among four traders who had worked at Barclays, Credit Agricole, HSBC and Deutsche Bank.
Credit Agricole said it had not been accused of any wrongdoing related to the attempted manipulation of Libor by Barclays, but had responded to requests for information for various authorities related to the matter.
Beyond regulatory penalties and criminal charges, banks face a growing number of civil lawsuits from cities, companies and financial institutions claiming they were harmed by rate manipulation. Morgan Stanley recently estimated that the 11 global banks linked to the Libor scandal may face $14 billion in regulatory and legal settlement costs through 2014.
In the United States, the regulatory investigation is being led by the Commodity Futures Trading Commission, which has made the Libor probe one of its top priorities.
(Reporting by Matthew Goldstein and Jennifer Ablan in New York and Philipp Halstrick in Frankfurt, with additional reporting by Emily Flitter in New York and Aruna Viswanatha in Washington, D.C.; Editing by Alwyn Scott and Maureen Bavdek)
@ Carie the whenthe loan is refinanced out of a trust (let’ssay for convenience purposes) to another series. The loan is in fact paid off and there is insurance purchased to offset any lost cash flow by the swap provider. This can be done because the notes are never conveyedin the orignalform to the Trust.
What do you guys think the pooling bank (SPE) does?
You should take a closer look at the GSE’s – to get a better understanding of what they do and what they sell. First of all, subprime had less to do with the GSE’s then you allege. Subprime was a result of programs,underwriting guidlines and the fact that many potential borrowers could not obtain loans under GSE guidelines (ever), one of the primary reasons was the borrower did not, could not or would not provide income for tax reporting purposes and they could not obtain loans based on verified income documentation.
Because the (Glass Steagal) banks had access to a (fixed LIBOR) cheap funding source that the GSE’s did not – the prviate pools were putting FNM and FRE out of the business. There were many points in time when you could obtain ARM financing on Alt A or Sub-prime loans cheaper than prime (agency qualified) loans.
FNM and FRE would have been out of business by 2005,and that is why they lobbied congress to change their underwriting guidelines, so they could also buy the cash flow from porrly underwritten unqualified loans.
Right now, there are many cases where FHFA is the Plaintiff and has sued the originator (actual originator), not fetch bank. The reason being, the GSE tranches were allegedto have a higher quality of loan, and in fact the triple AAA rating was not achieved by the actual loans, it was achieved through credit enhancement (swaps /mononline at pool level.
Since you have invested quite a bit of time i am going to set you on the right path. Simply look at the collection account, and how the loans get to that tranche and the residual interest account.
Or, avoid any additional work and go ask Jamie Dimon one question.
If all the loans were conveyed to the trustee within 90 days of the pool closing, why does the seller bank get residuals and why would they have to raise loan loss reserves on the reporting balance sheet if they no longer held any interest?
Taking the homes is not the tricky part for the N.A.s, it is getting them while still maintaining the REMIC exemption.
Which will end with the homework phrase of the week, “Implicit recourse”. Good luck guys and remember: the real modifications to the terms of the note and / or mortgage are achieved through litigation.
Finally, Neil has homed in on one thing every homeowner should assert as an affirmative defense. Violation of the Dodd /Frank and the use of meaningless discount rates used for no other purpose than to allow the GSE and HAMP participants to push a HAMP Backup on unknowing homeowners.
Here is some food for thought, and i know this from an “insider perspective” – every homeowner is charged a higher rate at inception (not origination) to insure the loan for default, they just don’t tell you. You paid for the insurance through a higher rate and you are not seeing the benefit of the insurance.
The Judges are now asking to see results for the NPV analyis.
Push the Dodd / Frank, it is a great defense!
@nancy drewe
This one’s for you.
BY HUBBLE SMITH
LAS VEGAS REVIEW-JOURNAL
Posted: Jul. 22, 2012 | 2:15 a.m.
Fledgling investors fighting foreclosure in Las Vegas
‘If Randy Ghezzi had it to do all over again, he would have paid the capital gains tax on the sale of some inheritance property, instead of investing the money in a Las Vegas office building through a 1031 exchange. Ghezzi now has about $550,000 tied up in the medical office building at 2716 N. Tenaya Way, near Mountainview Medical Center, that’s facing foreclosure.”
http://www.lvrj.com/business/fledgling-investors-fighting-foreclosure-in-las-vegas-163325586.html
@enraged
I asked because someone I know in NY state has an idea to sell their legal interest, they are talking about doing a contract of sale (current homeowner) with the new buyer. I don’t know if you can “sell” a legal interest. desperate times call for desperate measures
Nora. all this cabal stuff will never be public.
Thanks Martha—go girl.
pfffft! They tried to collect on my note, AFTER bankruptcy discharge.
First Appraisal Fraud, and Fraudulent Inducement. Then fifty grand in payments later, I tried to get a loan mod. Got unbelievable run around and conflicting statements, started investigating; discovered it all. Usury Interest. Bogus late fees that weren’t late. Demanded that the loan be rescinded for fraud under Equitable Tolling clause of TILA, they refused. Demanded validation of the debt, they refused. I informed them that they were in administrative default and that I demanded validation of debt or else quit their claim. They did neither. I stopped sending $ down the rabbit hole. Now I’m going to get it back.
DCB.. Very Well said! Kudos.
Carie.. Hey, just thanks for another sane head being on here, not calling others LIARS!, and for helping fight the complete fraud upon ALL OF US! and Not taking it lying down!
“The goal of the collector/servicer is to drive you to file bankruptcy so they can chase all your assets to satisfy the note.”
YES!! That’s why in BIG BOLD wording after every correspondence—no matter what it is—they shout about “automatic stay” and “bankruptcy”—they WANT you to file SO BAD. Glad I didn’t.
@AUTHOR
Above you stated the following as a optional response to a foreclosure action:
“(a): simply walking away from it after you have spent a few months (or years) rent free”
I offer a comment on the pluses and minuses:
To the upside, you get a few months in which you avoid paying either rent or loan payments.
The ORIGINAL NOTE will haunt you. The NOTE is the center of the controversy–the house is legally secondary o the note. The NOTE follows you to your next residence, bedroom and automoblie—your checking account, your job, your security clearances if military or other government worker. Unless you are headed directly to the bankruptcy court for a complete discharge of liability –not CHAPT 7–, the NOTE will haunt you for years to come. Issues will pop out–the numbers and names must be captured and documented. Collection practices, liens, the collection agency participation in your payroll takehome pay after deduction of the liability to the collector/servicer.
The goal of the collector/servicer is to drive you to file bankruptcy so they can chase all your assets to satisfy the note–and if you are employed to force you to pay them a portion of your pay in a workout rather than actual bankruptcy discharge of indebtedness. If you have income the colector will have the near-absolute right to seize a large portion of your pay under a chapt 7 workout plan. If you have no assets, no income, no expectation of income, the collector siezes your income based on that note and that intial court filing unless a similar determination is made in a fed bankruptcy court that deals with the note in that context. Businesses are able to more easily discharge debt on notes.
How does the NOTE affect you–what is the mehanical process?
You continue to accrue interest liabilty on the original note, until it is absolutely discharged by order of the court. The other party may provide by settlement agreements the terms of satisfaction and surrender of the NOTE as to the party who makes the claim. If it is the wrong note-owner that makes the complaint-claim against you, if it is the wrong claimant –a mistake or intentional theft by deception, and the thief oacquires and resells your home–you are still liable for the ORIGINAL NOTE balance plus interest and late fees–including the time in possession of the interloper. The actual holder of the real ORIGINAL NOTE can himself come out of the financial chaos and demand that you pay him. That person may have little or no proper information because he lacked a legal assignment of the right to collect on that note. The note must be presented and marked satisfied paid in full with ORIGINAL or verifiable copies ontained by the homeowner.
The homeowner must have an adequate accounting of the actual original note balances calculated and accrued for all periods. What amount are they going to report to the collection agency and/or the bankruptcy court, the IRS, the credit bureau?
The calculations and numbers used are often wrong–exagerated. No government agency will help you to unscrambel it. If you are too poor, too old, too sick, too stressed by pysocholical manipulation to ask these questions–you default and everything the other party choses to say–you tacitly waive gross errors At a minimum. the claim is exagerated by the LIBOR rate theft recently discovered.The interest calcultated against the account itself for the lifetime of the loan may be higher than the homeowner who made the note is liable. Explanation can run the gamut as a result of errors, ommissions, or intentionally deceptive
If the homeowner takes no action at all, he will be liable for the balance claimed in the complaint on the “ORGINAL” promsissory note. Any person that is not protected by complete discharge in bankrruptcy should not admit the amount claimed ansent long and careful consideration and a thorough review of the terms of the note and facts of the deal.
There should be no assuption that any party that was involved in preparing, arranging or brokering the loan was acting in good faith or fair dealing. These are implicite elements of the lending transaction. The homeowner should assume that these covenants have been breached–and there are offsetting damages and an unenforceable NOTE.
cash back=KICKBACK
$1.00 $500.00 or $5,000
And KC,
Come to think… banks are crying to get more customers opening a bank account. I have a shoebox full of Chase offers. Last years, they were willing to give people $100 to open an account in their banks. Nowadays, it’s $250. Is it the same idea? I haven’t really looked into it since i closed everything but you make me wonder… I thought it was just a gimmick to hook people. Still, $250 is an expensive gimmick!
@KC,
I never did get any cash back. Somehow, I want to say “Thank God!” because something tells me it wasn’t a good thing but I have no idea why… What is your understanding?
@Carie, refinance and cash outs …. 5% of borrowers brought cash to the table to fund the refi, 94% were cash-out and 1% were zero balance on the HUD. The Majority of all borrowers were refinancing for a lower intrest rate and not for cash out. As a matter of fact most borrowers never knew they were recieving cash back, they were quite surprised to find out they were getting an extra $100.00-$500.00 back on the HUD @ signing. Why do you suppose the broker/lender gave them cash back when they never requested any cash back?
Subprime refinance was GSE’s (Fannie/Freddie) rejects. And, subprime was in great demand because of the higher interest rate it paid to security investors. Security investors, however, are not the creditor — they are not the creditor for prime debt, not the creditor for subprime, not the creditor for GSE loans. They are, in fact, never the creditor. And, they do not fund any loans. They fund the BANKs — who are the “investors” in the debt. If you were ever to name security investors for TILA violations, or request rescission, you would be immediately tossed out of court. This is NOT the way the market works — no matter how Neil tries to slice and dice it to “make-it” work. It does not work, will not work in court, and counterproductive to foreclosure defense. Neil has never quite understood the distinction between security investors and investors. Ask him to define this in terms of Freddie/Fannie. Freddie/Fannie is the INVESTOR, security investors invest in Freddie/Fannie pass-throughs. They are NOT the same. And, niether Freddie/Fannie, as investor, or security investors in Fannie/Freddie pass-throughs — are the lender/creditor under federal law.
I also agree with Neil that the financial transaction occurred with a different party than stated at origination. But, Neil has the “trail of money” wrong. Subprime refinances were created by reporting default to the GSEs, prior to refinance, to make sure the GSE could not “invest” in the refinance. Banks wanted themselves to be the “investor.” . GSEs charge off the falsely reported debt, servicer or mortgagee collects insurance and pays GSE –and, simultaneously, purchases rights to the (false) default debt. And, the mortgagee “modifies” the default debt by calling it a refinance. Borrower remains in default with GSE.
NO funding is necessary, unless borrower requests “cash-out.” These (false) default debts were, perhaps, modified several times. No problem for debt buyer “investor” — because, if borrowers did not pay the high rates — foreclosure was the option. Default is default to courts, they just do not know that the loan was a (false) default before actual default.
Now, ask if prior loan was paid off — to a specified trust — at the time of the last so-called refinance. Do you think that the loan was not securitized prior to last refinance?? They were. What about the security investors to the prior trust — before refinance? Nothing prior is validly paid off. And, that is the money trail that you are missing. Why was prior loan not paid off?? It did not have to be — refinance was only modification of the false default debt.
The wire transfer are meaningless, except that we can sometimes use them to help show that loans were table funded. Was money actually transferred by the stated wire transfer?? Maybe, but that money was paid right back to the party who is “modifying” the loan by the claimed refinance. In other words, payoff of prior loan is directed right back to the party that owns the collection rights. There is never a payoff of anything.
There is no “trading” of ownership of the “loan” (although some debt buyers may “swap” collection rights). There is a “trading”/transfer of servicing rights.
Also, I do not dispute that banks were beneficiaries of payouts. First, the banks were the investors to default debt/collection rights, they were the ones that purchased the collection rights from the GSEs. Prospectus may not outline that the “loans” were first sold to an affiliate of the security underwriter (some do), but is clear by the conversion of the so-called loans to certificates in a trust, that they are sold to the security underwriters. These security underwriters, actually their parent corp., were the “investors.” The subprime lending corporations (now all gone) worked for these “investment/commercial” banks. Banks could operate as both investor and lender by repeal of Glass Steagall (which, by the way, many are calling for return to). Second, once the certificates were allocated to tranches, and sold to the the “investment/commercial” banks, the banks kept the upper tranches for themselves, and pawned off subordinate tranches to other “investors” — most often, another bank. Lower tranches may have been sold to other entities. But, the bigger effect upon the public, was the Collateralized Debt Obligations (CDOs) that were derived from organizing multiple trusts, multiple certificates, and multiple tranches — into a CDO. A SYNTHETIC derivatives that leveraged the fake loans — over and over.
Credit default swaps are often executed with cash and without transfer of collection rights. The banks do this privately, to parties not divulged publicly or to the borrower. That is, if they can dispose of collection rights. For a long time, market was shut down. But, thanks to government assistance (ha-ha), it has been greatly been revived.
@Mike,
Have you contacted Mandelman Matters to get a referral? Have you contacted the law schools in your area? Nowadays, most of them have foreclosure defense departments.
Blah blah blah
What good is your advice when there are o attorneys that will represent the homeowner
Im in san francisco any attorneys that will represent homeowners here. good Luck
@KC,
That’s awfully sweet of you. I agree that, for most people, it came as a horrible shock to see how far servicers were willing to go. I simply started documenting as things went on. i even wrote a few rants on some blog on internet when my payments were lost. I updated as the AG was getting involved, as BBB was intervening, as servicer wrote: “Oops! We made a mistake! Sooo sorry about that!”. I ranted about the letters I sent and the lack of response. in the end, it is all part of my evidence as to the duration of the ordeal. So, it’s all good!
The way I see it now, they can have the house. I don’t care. What I want the money.
@Enraged, I am truley sorry you and so many other families whose loans were wrongfully defaulted on have to endure this. Our best estimate is 4 out of 10 loans defaulted by the servicers, were indeed current. They did this All for the profit of fees and ins payoffs, and what they did to cover it up was just down right dispicable … its the worst kind of greed there is. I truley pray your family and all the other familes get the justice they deserve.
Las vegas,
What do you mean? The damages were suffered by the homeowner. The lost payments, unfair enrichment, statutory damages and emotional damages were suffered by the homeowner. The house is there. It doesn’t suffer anything. Even if the house is left vacant for months on end and ends up torn down by the bank, who suffered?
“…do not fall into the trap of following the documents”. That’s why spending incredible amounts of time harping on securitization is such a waste of time. The only thing that matters is where the money came from. Follow the money and nothing else. Let them prove where they got the money from and that it was specifically connected to your house. It the loan was assigned and conveyed and what not, the servicer will have the hardest time. Especially when the assignment states “Assignment for the nominal amount of $10.00”.
People who successfully fight lenders follow the money: theirs. They can show they made their payments, they can show those were deducted from their bank account. They can show that, regardless, they started getting fees after fees assessed to their account, they can show the existence of “suspense accounts” no one understands, they can show unjust enrichment, they can show the fees assessed are not even listed on the back of their statements (hence undisclosed). It is not up to the homeowner to investigate what the lender did with his money. It is up to the homeowner to investigate first that he made his payments, then ask questions and THEN stop paying when he doesn’t get the answers he needs.
Anything short of that is a recipe for failure.
“Before taking any action on anyone’s opinion in this column make absolutely certain you consult with an attorney who is fully conversant with the current mortgage and foreclosure climate. It is far different than it was ten years ago.” No brainer.
Thank you Neil. Okay, the loan was just part of their scheme, cool. They over appraised properties to create the bubble and now they under appraise to deflate the bubble.
Question: Do damages attach to the property or to the property owner?
Thank You Neil! Good Advice! That “Due on Sale” clause is really taking a “Bite” out of Crime. Sorry banker, no sale .. no payday. Sincerley… Freddie, Fannie,Ginny & Taxpayer.