Homeowners need to understand that they are investors, not borrowers.

The Fiction of “Prior Lender” Payments

In nearly all cases, the money supposedly paid to a “prior lender” during refinancing—or even purchase money mortgages—is entirely or mostly fictional. This is true so long as the same underlying investment bank is behind both the buyer and seller, or both the new lender and the old lender.

When Real Money Changes Hands

There are exceptions.

• If the seller walks away with equity, actual money is produced at closing.

• If refinancing results in cash back to the homeowner, that money is also real.

For example, if a seller nets $50,000 at closing, they receive that amount regardless of its source. Similarly, if a homeowner receives $50,000, that’s what they walk away with—unaware they’ve been pulled into a hidden scheme selling unregulated securities.

Every Closing Creates a New Securitization Chain

Here’s the critical piece: each new “closing” starts a fresh securitization chain. If an investment bank sells securities worth $12 for every $1 reported as paid in closings, then:

• One purchase money mortgage + three refinances = $48 generated per $1 reported.

• The reports of “payments” themselves are fictional, often including funds never actually paid.

In this scheme, a $200,000 mortgage becomes the foundation for a $10 million Wall Street play.

How the Money Moved

This system fueled massive Wall Street bonuses, turning hourly workers into overnight millionaires, and pushing trillions into the hands of investment banks. The banks spread that money across the globe—and they’re still sitting on it.

What Homeowners Should Have Received

If homeowners were treated like Wall Street insiders, they’d be paid an “introductory fee”. That means:

• A $200,000 mortgage would entitle the homeowner to $200,000 up front.

• All they would need to provide is their consent to issue virtual notes and mortgages—treated as if they were real.

The Unfair Reality

What burns is the fact that these players often reclaim money they paid to homeowners—without recognizing the homeowners’ unwitting role in these undisclosed, irreversible transactions. Courts should be reforming these deals to reflect the economic realities. Yet, investment banks refuse to share, and courts remain influenced by mortgage “instructions.”

Are the Courts Corrupt?

Not exactly. Courts start with bias, but they can be swayed. That’s why so many cases have been won by persistent homeowners and attorneys who challenge the system. The problem isn’t pure corruption—it’s misguided assumptions and systemic pressure.

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Tags: refromation of mortgage transactions
Posted in discovery, expert witness, Modification, securities fraud |