WAREHOUSE LENDING SHUFFLE: DIGGING DEEPER INTO THE SCAM

ONE ON ONE WITH NEIL GARFIELD

DOUBLE DUTY

EDITOR’S NOTE: As part of the pattern of obfuscation and confusion, the securitizers intentionally create entire patterns of infrastructure that mimic the loan transaction — except with entirely different people or entities. Brian Davies dug up this Warehouse Lending agreement. It’s like picking a bank from which you will write checks. When you write a check on your account, the bank is not part of the deal that you are funding with that check. It is a conduit or facilitator. So here we are, with a BORROWER, SERVICER AND ORIGINATOR — none of which match up with the entities meeting that description in the loan transaction with the homeowner.

So there are two BORROWERS, two SERVICERS and two ORIGINATORS — all performing different tasks, all creating layers of confusion to enable the participants to claim plausible deniability. But how do you you REALLY deny something that happens 20 million times?

Now here comes the big question for investors. If they advanced money (called “selling forward” on Wall Street) for the purchase of a bond (same as a note), who was the payor and who was the payee? That is the essence of the question of identifying the real creditor, with standing. And it defines the essence of what documentation describes the payor? On the other end the same questions apply. Since the deal with the investor took place before the loan with the homeowner, the question of of the identity of the payor on the obligation due to investors must be answered first.

The payor to the investor is described in the documents setting up the securitization infrastructure. It includes many potential sources of revenue of channels of money for guarantees, cross collateralization, over-collateralization, guarantees and credit default swaps with insurance. AND it includes payments from a borrower who is NOT YET Identified. Thus the documentation does not describe a loan on a home between the owner of that home and the source of funds, it describes a transaction, part of which is being funded now, and part of which will be funded later whenever a borrower with a home shows up.

So now turn to the homeowner’s transaction which takes place without any disclosure of the above, contrary to the requirements of Federal and State law. The money comes from what is left of the investor’s money who advanced his funds for the purchase of the “bond” with multiple payors, one of which was not yet known. The payee is unknown and undisclosed. The fees generated from the transaction are undisclosed. AND the status of the people at the table is misrepresented. A note and mortgage (or deed of trust) is prepared introducing a totally new entity (that the banks call “bankruptcy-remote”) as the payee and the secured party, but which has no actual participation in the transaction except what is recited on paper.

Thus neither the investor nor the homeowner sees any paperwork that actually describes the transaction that they were induced to enter under obviously false pretenses. Neither of them has a fully documented transaction. And neither of them is the party to any instrument purporting to be security for the homeowner’s obligation because neither of them has signed or even seen the transaction that actually occurred. The paperwork is fatally defective in that it describes a transaction that did not occur while the real transaction goes without any paperwork at all.

The investor is owed money and the homeowner may owe money but neither one knows the other and neither is in privity with the other for contract purposes. In equity there might be a claim from the investor against the homeowner but the real claim, and the one the investors are pursuing is against the investment bank who duped them into purchasing a holographic image of a paper bag.

SUBMITTED BY BRIAN DAVIES

http://www.scribd.com/doc/48033689/Amended-and-Restated-Loan-Agreement-Lennar-Sept-26-2006-by-uamc-captial-llc

FOR THOSE INTERESTED IN THE WAREHOUSE LENDING SHUFFLE HERE IS A GOOD AGREEMENT.

BORROWER UAMC CAPITAL
ORIGINATOR UAMCC
SERVICER UAMC LLC

NOW THE TRANSFER TO THE BUYER FROM THE WAREHOUSE LINE OPTEUM FINANCIAL SEE NEXT POST–PURCHASE THE LOAN PACKAGE OF $13MM FROM UAMCC/UAMC AFTER THESE ORIGINATORS PURCHASED THE LOANS BACK FROM UAMC CAPITAL LLC. SEE THIS AGREEMENT AND COMPARE TO THE PAGE 3 AND 4 OF THE PURCHASE AGREEMENT.

NOW THE MERS AUDIT TRAIL SAYS INVESTOR UAMC LLC. THE GESTATIONAL WAREHOUSE BANK ONE. WELL BANK ONE IN 2004 BECAME JP MORGAN. THE AGREEMENT SAY TO WIRE TO AN UNKNOW ACCOUNT AT JP MORGAN THE PAYMENTS FOR THE $13MM LOANS. THE LETTER IS FROM RESIDENTIAL FUNDING CORP. THIS IS INTERTWINED INTO ANOTHER AGREEMENT CALLED A THIRD AMENDED AND RESTATED WAREHOUSE LINE.

THE LOAN THEREFORE GOES UAMCC—>>UAMC CAPITAL LLC [BORROWER FROM JP MORGAN]—>>BACK TO UAMC LLC TO SELL TO OPTEUM. THE SERVICER UAMC LLC WHO IS ALSO THE SERVICER TO THE HOMEOWNER IS ALSO THE TRUSTEE OF THE DEED OF TRUST. THE INSURANCE IS PMI BY THE SUBSIDIARY OF THE BUILDER LENNAR, THE HAZARD INSURANCE IS THE SUBSIDIARY OF THE BUILDER. ESCROW AND TITLE IS A SUBSIDIARY OF THE BUILDER. UAMC LLC IS A SUBSIDIARY OF THE BUILDER. UAMCC IS A SUBSIDIARY OF THE BUILDER AND UAMC LLC. 67% OF ALL LENNAR HOMES WERE STEERED TO USE THEIR PREFERRED LENDER UAMCC. THAT THE DISCOUNTS OF $20,000 IN UPGRADES ARE ONLY WITH THEIR PREFERRED LENDER. THAT THE BUILDER, LENDER AND ALL SALES STAFF HAD WEEKLY MEETINGS. DOES THIS SEEM TO BE A SPECIAL RELATIONSHIP. NOW THE BUILDER HAS A BUYING GROUP RIALTO CAPITAL WHICH JUST DID A PRIVATE PUBLIC DEAL WITH THE FDIC TO BUY LOANS. WOW, SEEMS LIKE ALOT OF OVERSIGHT.

Tags: borrower, originator, rialto, servicer, UAMC CAPITAL, UAMC LLC
Posted in bubble, Corruption, Eviction, securities fraud |