Maher Soliman and Steve Kop have hit the nail on the head. The only grey area that needs to be explored is the same cinfused mess that started this. The SPE is a conduit by definitition. It is a REMIC. That means it does NOT own the mortgages and notes and it does not own the mortgage backed securities. But the strategy you are seeking to employ would have an interesting outcome: in all probability it would either go by default in your favor or they would come out and say that the REMIC/SPV/SPE doesn’t hold anything and that you have no right to a receiver over the assets of the investors. I still like the strategy. You just have to realize that you will met with more obfuscation.
A registrant is anyone offering to sell stock privately or shelve. Depending on the situation the registrant can be forced to place its structured investment (Pass through Trust) platform and Special Purpose Entity (SPE) it manages, into receivership after the credit market problems have slashed the value of the SPE and trust assets in half. Receivership is a type of corporate bankruptcy in which a receiver is appointed by bankruptcy courts or creditors to run the company.
The responsibility of the receiver is to recoup as much of the unpaid loans as possible. Being in receivership is not an enviable situation for a company. Oftentimes, receivers find that the best way to pay back loans is to liquidate the company’s assets, which effectively puts the company out of business.
The investment banking capital partner can bail out the trust with additional capital if seeking to fight this move by the creditors.
I contend that the rules and definition for an impaired asset under GAAP and FASB criterion should have collapsed the value of the assets way prior to this proposed triggering “enforcement event”. Under the rules governing the registrant, a receiver would then have to be called in.
The action will be a severe embarrassment for the bank and parent or “parties” that no doubt had 18 months to address the problems with what will be the first of hopefully many asset backed mortgage trusts headed into receivership.
These Enron disciples take an absolutely ignorant approach slicing the assets up between investors, while planning on taking (who knows what), something in the billions for itself for its own equity stake. The receiver’s job is to realize the best value possible, which is usually achieved by selling assets. However, the management can open discussions with a receiver, once appointed, to discuss alternative arrangements to provide liquidity”.
Receiver is a person appointed by a bankruptcy court or secured creditor to run a company for a short period of time in a manner that will ensure as much debt is paid back to creditors as possible. The main purpose of a receiver is to use a company’s assets in a way that will most effectively pay back creditors. Depending on where a receiver is appointed, there are numerous restrictions on how he or she runs a business. For instance, in many jurisdictions a receiver can run a company only for 14 days.
In turn, a receiver’s main function is often to:
Liquidate all available assets.
When a receiver is appointed, the company is said to be “in receivership.” We don’t know for sure the degree of retained interest the Federal Savings Banks maintain in the assets I believe they house. The transfer of the beneficial interest is all a subsequent event with MERS hanging out there as a nominated beneficiary waiting to take directions.
Pundits who acknowledge that selling the assets where there are few buyers, would not realize the best value possible are missing something. You the consumer who is due a modification or short sale based on the same inclination . . . of value agrees.
Understand the undertaking to press a registrant and platform into receivership…I have. Foreclosure are primary limited to SISA or SIVA assets only. If more than one asset is behaving in such a way (delinquency) month in and month out then classify the asset as impaired. Classify them under all as toxic waste by products of traditional acceptance and lending practices.
Dispose of the waste in their entirety as a group of assets sharing common characteristics. I assure you the receiver will find reasons supporting derecognition and for classifying asset impairment not properly reserved and now must be written down. According to GAAP all long term assets are subject to constant review when circumstances and situations change such that an indication of the value of the assets carried is likely not recoverable.
A write down to the true asset market value is FAR from something void of establishing market value where there are few buyers. I know of a few hundred thousand foreclosure victims who would eagerly bid their properties back in liquidation. It meets the sprit and objectives of TARP. Furthermore the borrower MIGHT JUST BE VIEWED AS SOMEONE WHO CONTRIBUTED ITO BRINGING THE CDO INVESTMENT TO THE TRUST. Borrowers are the only sane market makers I am aware of motive to pay top dollar on a discount and allow the appropriate “party and balance sheet” to realize the best value possible. In other words it’s a win. The degree of discount may be a problem for homeowners seeking to participate in liquidation.
Some kind of maneuvering could perhaps allow the Trustor (borrower) to be considered a creditor.
THE KOPSOL THEORY:
Consider the concept whereby a borrower becomes a creditor and the consumer homeowner is integral to the registrant by posting their
1) Personal guarantees
2) Rated credit score
3) Underlying collateral and
4) Received dividends
5) using their home as a margin account
The dividend are forgiving the second like an accreting bond and six to 12 months of payments (missed accrual) then a modification agreement. Or was that really a Reverse Repurchase agreement disguised as a “modification”?
Either way its something that would require a 1099 at year end to show consideration by the parties….WAIT A MINUTE!
Loan or investment . . . what did the homeowner receive?
Filed under: bubble, CDO, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage | Tagged: borrower, disclosure, foreclosure defense, foreclosure offense, fraud, Lender Liability, money, mortgage meltdown, rescission, securitization, trustee |
Mr. Garfield I have another twist, I was talking to a real estate attorney about the notes and deeds of trust or mortgages, and he mentioned that if the title in held as tenants by the entirety and the lender only had one spouse sign the note and the same lender had both spouses sign the deed of trust, the person who did not sign the note cannot legally pledge his indivisible share of the title under this deed of trust, that an action to quiet title was required since the deed of trust was preventing the full quiet enjoyment of the title to the property. Is this correct?, it does sound logical. However why would lender require to have a deed of trust signed without modifying the tenancy of the title by the spouses?
Also would it not make sense to jump right into an action to quiet title right after the QWRs and demand letters are sent, to determine who the real parties with an interest on the title are and then amend the complaint after discovery to include all the TILA, RESPA, etc claims.
If standing is at issue why not go for the kill from the start? and you actually find a party with a verifiable and valid interest, would it not be the party to whom you should address all your claims?
Why dance around, if one proceeding can advance the borrowers assertion of his rights??
There are a whole bunch of lawyers out there all confused about TILA, RESPA when the issue is standing and after that is settled them you can go after the real players if they actually show up.
If the note was subdivided into securities, and the trusts do no own anything, and if a TRUE SALE was done, an action to quiet title should do the trick for the first attack.
Can you explain how would the typical case flow from the QWR forward.
Thanks
http://www.foxbusiness.com/story/markets/al-lewis-wells-fargo-bank-sues/
In this particular case, Wells Fargo holds the first and second mortgages on a condominium, according to Sarasota, Fla., attorney Dan McKillop, who represents the condo owner.
As holder of the first, Wells Fargo is suing all other lien holders, including the holder of the second, which is itself.
“The primary reason is to clear title and ownership interest in a property to prepare it for sale,” Waetke said in an email exchange. “So it really is not Wells Fargo vs. Wells Fargo.”
Yet court documents clearly label “Wells Fargo Bank NA” as the plaintiff and “Wells Fargo Bank NA” as a defendant.
Wells Fargo hired Florida Default Law Group., P.L., of Tampa, Fla., to file the lawsuit against itself.
And then Wells Fargo hired another Tampa law firm — Kass, Shuler, Solomon, Spector, Foyle & Singer P.A. — to defend itself against its own lawsuit, according to court documents.
Wells Fargo’s defense lawyers even filed an answer to their client’s own complaint.
“Defendant admits that it is the owner and holder of a mortgage encumbering the subject real property,” the answer reads. “All other allegations of the complaint are denied.”
Mr. Garfield and Brad , you guys are too much. These poor Trustees what are they going to do next?, you just disassembled their illegal pyramid scheme.
What are these poor guys going to do to pay their kids, private schools, nannies, servants, trips to Paris, and their wives plastic surgeries.
We the people have finally started the offensive move. I believe lawyers should not be so hesitant to prosecute their clients rights. These Mortgage actors are criminals, mafioso quality material. They abuse our systems of financial liberties.