RE-REMIC: The Re-Securitization of Real Estate Mortgage Investment Conduits.

The Hidden Truth Behind Mortgage Bonds

Ever since the 2008 financial crisis, investors have slowly awakened to a harsh reality: the mortgage bonds in their portfolios are often worthless. Why? Because most were issued by nonexistent REMIC Trusts that were never activated by actual cash transactions.

Key Points:

• The Trusts never received investor funds, meaning they never acquired high-quality mortgages.
• Mortgages that were originated were fatally flawed in both underwriting and execution.
• Investors were left holding paper tied to empty shell trusts with no assets.

Enter the “Re-REMIC”

By late 2008, banks needed a way to pacify angry investors. Their solution? Re-REMIC — creating new “Trusts on paper” to issue new mortgage bonds in exchange for investors surrendering their worthless securities.

• The original REMIC disappears.
• Investors in the old trust become investors in a new fictional trust.
• No evidence exists that mortgages were ever legally transferred into the new entity.
• Critically, no cash changed hands in these deals, confirming that the original trusts were never funded.

This left borrowers fighting phantom trusts with no legal standing.

What This Means in Court

When foreclosure cases land in court, the narrative sounds surreal but is true:

• Trustees don’t own the loans and have no disbursements to any creditor.
• Mortgage Loan Schedules (MLS) are missing or fabricated after the fact.
• “Servicers” act as fronts, disguising the fact that no trust owns the loan.
• Foreclosures proceed not to benefit investors, but to allow the investment banks (masquerading as Master Servicers) to recover money from liquidation.

This explains why Trustees never sign off on modifications or settlements: they have nothing to do with the process. Everything is run through subservicers working for the investment banks.

Example: JPMorgan’s 2016 RE-REMIC

In 2016, JPMorgan launched a $485 million re-REMIC, JPMCC 2016-FLRR. Here’s what happened:

• It bundled senior notes from two prior JPMorgan deals (2016-FL8 and 2016-H2FL).
• Originally rated BBB-, the re-REMIC was repackaged so the senior tranche could receive a coveted AAA rating.
• Underlying loans: 36 commercial properties across 11 states.
• Property exposure: Office (43.8%), Lodging (34.5%), Retail (13.5%), Industrial (8.2%).
• Geographic concentration: Texas (22.4%), Virginia (14.1%), California (12.8%), Massachusetts (10.9%).

This financial engineering allowed downgraded securities to appear stronger on paper, giving banks better regulatory treatment — without fixing the underlying flaws.

Why This Matters for Homeowners

The RE-REMIC shell game creates a foreclosure battlefield where:

• There is no trust, no true creditor, and no loan account.
• Homeowners face legal actions by entities with no standing.
• Courts are misled by fabricated documents, late-created assignments, and robo-signed endorsements.

The reality: foreclosures continue not because there is an unpaid creditor, but because investment banks want to recover advances and fees—often from the very money belonging to investors.

Takeaway

If you are facing foreclosure, understand this:

• The “trust” named in your case may never have purchased or held your loan.
• Assignments, endorsements, and PSAs often hide the fact that no underlying obligation exists.
• Foreclosure defense is about exposing these gaps and forcing the claimant to prove ownership of the debt—something they cannot do.

📞 Need Help?
We provide litigation support for homeowners and attorneys navigating wrongful foreclosures. Call 844.583.5339 or submit a case statement online for a complimentary recommendation.

⚖️ Disclaimer: Foreclosure defense is not simple and there is no guarantee of results. But with preparation, you can expose the lack of standing and protect your home.

Posted in Servicer |