Correcting Misimpressions of Securitization: The Bill Gates Owes Me Syndrome

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

I’ve figured out that because I wasn’t clear in the way I said it, some people have been led astray. So let me state it clearly that the appearance of a loan on an internet site is neither proof nor even evidence and may not be a worthwhile guideline in determining the “ownership of the loan.” If someone files something with the SEC and claims that XYZ loan is in a pool of assets, that is merely a report that is supposed to be true but in 99% of cases, it is is my opinion that is NOT true. If the loan shows up on the Fannie Mae site that does not mean FNMA owns it, but it might mean they think they own it or they claim to own it. The law recognizes the difference between a self-serving claim like writing a letter confirming that Bill Gates owes you a billion dollars, versus actual evidence with proper signatures, authority and following the appropriate rules and provisions of contracts.

The documents you prepare to substantiate the fact that Bill Gates owes you a billion dollars may LOOK good, but if they are not signed by him or anyone on his behalf, based upon authority signed by him, they mean nothing except that there is a fraudulent attempt to convince someone that Bill Gates owes you a billion dollars. Under no circumstances will Bill Gates ever pay you that billion nor will anyone ask him to do so. And that is true even if you put your documents on the internet. The difference I am making here is the distinction between saying you are going to do something (the securitization documents) and actually doing it. Saying you will or you want to is not a legal act.

This is the case with the mortgage mess. The securitization structure was set up and everyone acted as if the the loans were actually being legally transferred, except they were not legally transferred and no effort was made to do so. In fact, no effort COULD be made because the only party that COULD have transferred rights to the note or mortgage was the party named on those instruments. And THAT party never loaned you any money, so the documents are void. Transferring void documents does not improve their quality.

So if the loan appears on the site of FNMA that doesn’t necessarily mean anything. That does not mean that the loan is actually owned by them, it is merely a report. In turn, nearly all loans processed through the GSE infrastructures were sold into the secondary markets and “securitized.” The question is what was securitized. It is becoming increasingly clear that since no actual documentation of any transfer actually was created, signed or delivered, that the legal ownership of the loan would be presumed to be in the name of the party of record (in the county title records) who is named as the mortgagee or beneficiary. However, since this was only the originating party in most instances, and was acting merely as a broker, the actual money came from another source to whom an obligation is owed. Therefore in my opinion, (you should check with a licensed attorney before making any decision or acting on anything in this email or any of our reports) the MOST likely unavoidable legal result would be that the mortgage encumbrance was incorrect and void at the time it was created, which in the law, we say void ab initio. That would be because it names the wrong party to whom money is owed. The net result according to the laws I know, is that the obligation exists, but it is (a) unsecured and (b) due to an unknown creditor (solely because the securitization parties refuse to provide the information).

While the securitization of loans is thought to mean that the actual loan documents were used as a the basis for parceling out risk in subsequent documents, thus creating mortgage backed securities whose value was enhanced because of the reduction of risk, this did not turn out to be the case. In truth the only actual legally recognizable events or process was that numerous parties were given access to cash flows to and from the investors, the borrowers, and the co-obligors and guarantors whose obligation induced the investors to believe that their investment was safe, but whose existence was hidden from the borrower and whose actual participation was obscured from the investors.

So where does that leave us? “Securitization” is nothing but a code word for access to money. It’s like MERS, which was a vehicle for hiding the real action. Access is not the same as ownership. Just because you can get in the car doesn’t mean you own it, even if you are in the driver’s seat and now and then. So why do title and securitization analyses? Because until there are more Judges that understand this than there are judges who don’t the burden is always going to be on you to disprove things that the other side SHOULD first be required to prove but isn’t.  Unless you and your attorney really understand this stuff, they will dance rings around you. You can’t be a securitization expert or a title expert. But you can walk into court with reports showing inconsistencies and breaks in the chain of title, authority and ownership and THEN maybe the judge will demand that the pretender lender, stop pretending and either put up or shut up. And the other reason you get the the COMBO analysis is so you can follow the probable path of the money in order to claim offset for reduction of the “loss.”

Posted in bubble, Corruption, Eviction, securities fraud |