Can I Borrow Your Appraisal, Mortgage Broker, Real Estate, Title Agent License?

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

Coupled with the obvious improper relationship between lawyers and Wall Street, is the prior history of having done essentially the same thing in the creation of the loans. People who had licenses to practice their profession threw caution to the winds in exchange for large profits and fees. Keep in mind, lawyers, as you read this, that most of these people have errors and omissions policies. Also keep in mind, as Beth Findsen as pointed out in her excellent analysis, that the final issues of the battle may well be defined by the laws governing principal and agent. If these companies end up defined (by their own pleading, or by the proof) as agents for the securitization parties, you have some deep pockets leading straight to the doors of the mega-banks.

• Appraisers received copies of the contract and were given the target value that was required for the deal to be approved. Failure to comply meant they never would see another deal. Compliance meant higher fees. This writer has personally seen the fee schedule from Chevy Chase Bank in which the schedule of payments is increased with the value of the house.

• Mortgage Brokers received higher fees and undisclosed yield spread premiums for steering borrowers into bad loans. These evolved into mortgage brokerage mills that were morphed into “loan originators.” They had no money to lend of course, but that didn’t matter. The money was wired in from a remote source. Thus the originator named on the note signed by borrower was not the party that advanced any money. The mortgagee or beneficiary under the mortgage or deed of trust was not the party who advanced any money. The whole thing was a lie to keep the borrower from knowing the identity of his creditor. The borrowers literally did not know who they were dealing with nor the extra terms that were being added as the receivable was “sold” to unsuspecting investors who didn’t know what was going on at ground level.

• Real Estate Brokers, knowing that the appraisals were at least suspect and that the loan deals were problematic, as well as knowing that the loans were not being funded by the party at the closing table, looked the other way to receive a much high volume of fees than anything they ever saw in their lives.

• Title Agents, knowing that the parties were not properly disclosed in the closing documents, nevertheless issued policies and acted as closing agents. As title agents, they knew that the act of non-disclosure and misleading statements on the closing paper would create an immediate title cloud and might cause a fatal defect in the title chain. Many probably knew that the homeowner would not realize all these things and that when it came time for the obvious foreclosure on a loan that any 10 year old understood could never be repaid, borrowers would most likely walk away.

It all amounts to renting the license of local people so that a third party, who is neither registered to do business in the state nor licensed to perform these functions could control the transaction and call the shots as to how the deal was done and documented.

Posted in bubble, Corruption, Eviction, securities fraud |