WHY THEY WON'T HELP UNLESS YOU ARE DELINQUENT

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

The question has been asked by so many readers that I figured I would give them my answer on the subject in an article.

The first reason why the pretender lenders won’t help you unless you are delinquent or in default on your payments is pure math: the longer you pay the carrying charges on the house, the longer you pay the interest rate that is over- market, and the longer you are paying to amortize a loan whose principal is far over fair market value, the less time the pretender lender must incur costs and the longer they can stretch out the mortgage mess. Each day they are making more money on the mortgage mess. why stop it?

The second reason the pretender lenders won’t help you unless you are delinquent or in default is that it would require them to justify downgrading a performing mortgage that is held on their books at a much higher level (the original principal due). Of course the loans shouldn’t actually be on their books to begin with, and they are probably not there if you take a close look. What you’ll find are liabilities and assets that were conjured out of thin air in the form of exotic derivatives including synthetic collateralized debt obligations.

And the third reason the pretender lenders won’t help you unless you are delinquent or in default is that it would be a tacit admission that the original “math” used in the origination of the loan, was wrong, at best. In fact, it is quite easy to upscale the reasoning that there is no way they couldn’t have known that the loans they were claiming to be part of a fictitious securitization structure were intentionally misstated through inflation of the appraised value, and skipping all the industry standards for underwriting a loan — standards that are meant to assure the high probability that the loan will be repaid. This admission would clearly be used against them by investors who suing the investment banks in greater and greater numbers and borrowers who so far have not sued the investment banks but limited their lawsuits to the loan originators, aggregators, servicers and of course MERS.

And the reason the government won’t consider helping you unless you are delinquent or in default, is that the decision-makers have accepted the axiom from Wall Street that you don’t deserve it. According to their way of thinking, you signed up for a loan that about which you have regrets. That’s called “buyer’s remorse” and there is, for the most part, no political or judicial doctrine by which buyer’s remorse can be converted into a remedy. The axiom from Wall Street that is taken as self-evidently true is that you misbehaved — you bought a bigger house than you could afford and agreed to terms that you could not afford to pay. Of course what is missing from this “axiom” is that it is wrong. And THAT is why the lawyers in court are concentrating on two things when they represent the pretender lenders — getting the Judge to go head down into the paperwork instead of looking at the facts, and advancing the presumption that the original closing was properly documented.

Thus the issues of whether the documents were properly TRANSFERRED distracts attention from the original transaction. Close examination of the documents signed at “closing” will most often reveal two counter-intuitive issues — first that the actual transaction was between the borrower and an undisclosed lender with terms, fees, conditions and restrictions that were not disclosed in the required pre-closing documents and which were never documented at all at the Closing,” and second, that the documents that were produced and signed at the “closing” refer to a transaction that never took place. The fact that the Borrower accepted the benefits of the funding of a loan gives rise to an obligation or liability, to be sure. But that mere fact that a liability exists does not constitute a substitute for the documentation required by law, or the recording and registration requirements imposed by the State and County. AND the mere existence of documentation with the name of the borrower on it is no substitute for documents contain ALL the required data describing the actual transaction that took place.

In plain language the documents do not track the cash transaction and the cash transaction does not conform to the documents.

So the final answer to the question is that by limiting their “efforts” (false as they may be) to modifications and settlements of non-performing loans, they eliminate scrutiny of the other 80% of loans (performing loans) whose validity and enforceability are at best questionable and at worst actionable for compensatory and punitive damages. And THAT in turns leads to the fundamental question of whether the pretender lender actually has any authority to settle. Of course they don’t. Neither they nor any party they purport to represent was ever the lender or buyer of the loan.

Posted in bubble, Corruption, Eviction, securities fraud |