Countrywide Decision: Investor is owner of loan

BofA’s Countrywide loses court ruling on mortgages — Modifications Not Authorized By Investor May be Invalid

There is lots of significance about this decision. First it shows that if the investor is going to sue it is going to be against the intermediary pretender lenders and not the borrower — because they don’t want to expose themselves to liability for predatory loan tactics, usury, securities violations, TILA, RESPA and HOEPA violations. Second it shows that as we have said all along here, the servicers don’t have the right or authority to actually negotiate and execute a loan modification.  And third it shows that the investor who bought bonds that were mortgage backed securities are the OWNERS OF THE LOAN.

This decision is essentially fatal to ALL foreclosure actions based upon securitized loans. It identifies the investors as the owners of the loan and negates the alleged authority of intermediary pretender lenders to do ANYTHING in the way of enforcement, modification, collection through legal means etc. because they simply have no standing (because the alleged debt is not owed to anyone other than the investor). The foundation is crumbling. These decisions are coming out one after the other because of a simple fact — the tacit deal between Wall Street and loan servicers and loan data administrators (MERS) may exist, but it has no legal effect without the investor and the borrower signing on to these new terms with extra conditions and co-obligors.

August 20, 2009, 7:42 am NEW YORK (Reuters) – A federal judge has ruled that Bank of America Corp (NYSE:BAC – News) cannot have a lawsuit by investors seeking to force it to buy back mortgages heard in federal court, saying he lacks jurisdiction to decide the case. Tuesday’s ruling by Judge Richard Holwell of the U.S. District Court in Manhattan means the case will move to state court. Holwell did not decide the merits of the case. “Congress passed two statutes within a year of each other to address the mortgage crisis,” the judge wrote. “In neither of these statutes did Congress federalize the case.”

The ruling is a win for investors, to the extent that Holwell rejected a claim by the bank’s Countrywide Financial Corp unit that new federal laws to encourage loan modifications to help struggling borrowers stay in their homes govern this case. Countrywide had argued that the laws negated obligations it might have had to buy back modified loans. In 2008, Countrywide agreed with some 11 state attorneys general to modify $8.4 billion of loans made to roughly 400,000 borrowers.Investors who own mortgage securities typically receive interest and principal payments. If servicers modified the underlying loans to reduce borrower obligations, investors would be harmed because they would receive lower payments.

Holwell did rule that investors bear the burden of showing that pooling and servicing agreements for their loans, taken “as a whole,” require Countrywide to buy back the loans.Bank of America could not immediately be reached for comment. A published report said a spokeswoman agreed that the court did not rule on the merits of the plaintiffs’ claims.The current case was brought by two investment funds holding Countrywide mortgages, Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC. These investors complained they would be harmed if Countrywide shifted the burdens of loan modifications to 374 trusts into which loans had been repackaged and securitized.

These investors would rather Countrywide repurchase modified loans for the full unpaid amounts. Countrywide had been the largest U.S. mortgage lender before Bank of America acquired it last July for $2.5 billion. The case is Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC v. Countrywide Financial Corp, U.S. District Court, Southern District of New York (Manhattan), No. 08-11343. rule that investors bear the burden of showing that pooling and servicing agreements for their loans, taken “as a whole,” require Countrywide to buy back the loans.Bank of America could not immediately be reached for comment. A published report said a spokeswoman agreed that the court did not rule on the merits of the plaintiffs’ claims.The current case was brought by two investment funds holding Countrywide mortgages, Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC. These investors complained they would be harmed if Countrywide shifted the burdens of loan modifications to 374 trusts into which loans had been repackaged and securitized.These investors would rather Countrywide repurchase modified loans for the full unpaid amounts. Countrywide had been the largest U.S. mortgage lender before Bank of America acquired it last July for $2.5 billion. The case is Greenwich Financial Services Distressed Mortgage Fund 3 LLC and QED LLC v. Countrywide Financial Corp, U.S. District Court, Southern District of New York (Manhattan), No. 08-11343.

116 Responses

  1. Angry&not taking it”

    There is no public document trail for “off-balance” sheet conduits – that was the purpose. But public information is available for these trusts via SEC. Security underwriters are the ones that bought the mortgage loans, placed the loans in the conduit trust, purchased the certificates to the trust, and securitized the receivables to the certificates for sale to pass-through investors (only current receivables can be passed-through in a security). If MERS is nominee, I would think they would have to named on the original security instrument. If not, then you would need all the assignments leading up to the MERS assignment (the complete chain of title) for any assignment to MERS to be complete (since I am not an attorney can anyone else answer this?). Follow the trail of the SEC docs for conveyance of mortgage loans and purchase of certificates. There should be no “gap” in chain of title.

    For anyone interested, there is an article about Judge Schack in NY in the New York Times (August 30, 2009).

  2. Anonymous

    i am not seeking legal advice this is for informational purposes only!
    i’m looking for anyone and or anyplace I may demand thru discover to unravel this bulshit fleecing scheme.If not available in the sec 8k or 10k poa be mentioned [why would they disclose a potential weekness??? nope i highly doubt thats going to happen ] which document trail would the off-balance sheet exist?the poa of a Delaware corp in bk would example”fremont I&L filed chapter11 in 6-08- would an assignment to mers before or after 6-08 still be valid ? i want to prove – the actions of lenders concealing real & indispensable parties from the closing table voids the contract causing the dot to be unsecured. i’m not asking toooooooooo much hahaha

  3. POA stands for Power of Attorney. It is sometimes used in foreclosure cases for mortgage assignments and recording (usually Limited Power of Attorney is used). Many subprime mortgage originators that are now dissolved are currently using POAs to assign and record mortgage assignments. As far as I know (and any attorneys here should weigh in on this), POA “dies” when the entity is dissolved or is taken over by another entity. Thus, POA could be be invalid. Many corporations are incorporated in Delaware. Delaware allows an entity to remain in existence for 3 years after dissolution to defend itself against lawsuits and tie up business – but the entity cannot conduct business. I would assume that assigning assets you no longer own is conducting business (again any attorneys weigh in). Also SPV trusts have specific guidelines for the granting of Limited Power of Attorney. Recent Ohio case discusses this to a degree as does some NY judges who also have problems with the party signing the POA and that party’s dual roles.

    Yesterday’s WSJ article was important because it is first time that is it was publicly acknowledged that the banks off-balance sheet SPV conduits have been “abandoned”. Thus, assigning foreclosures to “abandoned” trusts is a problem. These trusts were organized as REMICs (Real Estate Investment Trusts) and were regulated by IRS for tax status. Mortgage loans could not be assigned to SPV beyond 90 days (there is a strict 2 year exception for substitute loans). Thus, assignments 90 days after close of SPV REMIC are questionable. But any other information regarding “abandonment” by banks of SPV is very important. This information, due to off-balance sheet structure and deregulation of derivatives is not available to public. Yet is becoming apparent that these SPVs are dissolved and are no longer being traded – at least not by the original structure. Anyone who can provide additional support to this would would be very helpful to those who need this information..

    I am not an attorney, and cannot give legal advice. The views expressed here are not to be construed as legal advice but are only my opinion.

  4. Anonymous-what is the POA?

  5. Angry&not taking it:

    Wish I could help more – but I am not an attorney. What I was referring to is the POA for mortgage assignments (if there is one). NY state court has also emphasized the problem. A good bankruptcy attorney will also be alert to problems.

    For everyone else, Congressman Barney Frank, today, emphasized that the Bankruptcy Bill will be revisited. The Judiciary Committee is responsible for any changes. I believe John Conyers, Congressman for Michigan, chairs the Committee. All should contact congressman and senators to emphasize how important it is to pass this bill.

    Also, Wall Street Journal reports today that “Reform Falters as Shock Fades” – emphasizing that new regulation to monitor financial markets may not be necessary since financial institutions may be voluntarily cooperating.
    WSJ states: “Some of Wall Street’s most notorious practices are unlikely to reappear. Banks say they’ve permanently abandoned housing risky assets in off-balance sheet vehicles.” These off-balance sheet vehicles are the special purpose vehicles (SPVs) that plaintiffs’ often used to foreclose under the name of – such as – XYZ Trustee for the Certificate Holders of ABS Asset Backed Trust Series 2006 UV1. The WSJ article indicates that these conduit off-balance sheet trust have been permanently “abandoned” by Wall Street. Thus, the trusts appear to be dismantled. This would coincide with the new May 2009 TILA amendment which states that the creditor (and creditor is specifically defined by the TILA), must be identified to borrower after any assignment.

    Just have to convince the Courts that there is no more hiding – and borrower has rights.

    Again, urge all to contact your state representatives in Congress and Senate.

  6. ANONYMOUS

    if you could…point me in the direction of the delaware bankruptcy poa
    you referred to i’d be truly greatful..
    fwiw i’ll be sharing my results here

  7. Abby,
    I think a blog would serve the purposes of the website you’re looking for. Word Press seems to work for Neil, but I think Blogger is easier and more intuitive (I say this as someone who has used both). Best of all, it’s free.

    I’d be happy to set up a blog that I believe will serve our purposes. Or anyone else can do it. The only thing between us and a blog is a pithy name for both the blog and the cause–unless I missed that in a post somewhere.

  8. OK all–we do have a core coalition team going and am seeking somebody to put up a not to complicated website so we can get 1. more Homeowners who will go to DC to testify 2. accept donations to possibly fund the trip(s) to DC (I noticed from TV that the TEA PARTIES have extravagant buses they travel in) and
    3. a list of anybody who supports our fight

    Abby, Alina and Anonymous are ready to testify before Congress.

    Is there anybody who can work with us to put up a website?

    We’ll fight for you all, but we need support.

    Thanks

    carra2009@gmail.com

  9. you have some really good posts here. Im going to spend the next few days reading them. i love your writing style and I’m really happy to visited your blog. keep those posts coming

  10. I guess “default swaps” is Wall Street jargon for “money laundering.” Then when you get caught, you blame the victim. It’s not a pretty picture.

  11. Everyone – has to “get it out”. It is horrible. Convinced all of this relates to default swaps – unregulated, unrecorded, and avenue for abuse.

  12. Abby and Anonymous,

    I totally agree that it is very difficult to figure out what has happened to the loans. Once upon a time, I am told, loans were done through your banks where they kept the note and mortgage in their vault. So if you had a question, you simply could go down to your bank and speak with your banker about your loan.

    Nowadays, your loan disappears down a dark hole and there is no one you can speak with or will answer your questions. The courts are a sham also. The attitude on the court level is total apathy. This is simply a “foreclosure” to them and you must be in the wrong because if you were a “good” person, then you would be paying your loan. If it were a criminal proceeding, the courts would have you tried and convicted before you even appeared in court.

    I have worked as a paralegal for the past 20 years and I ma appalled at the way the foreclosure mill attorneys stand in front of the judge and lie. They are allowed to file paperwork they know to be false with impunity.

    Just recently, in my law firm, one of the partners filed an affidavit stating he had never been sanctioned in court (the paralegal working on the case did not do a proper background check and the attorney did not read the affidavit before signing it). Long story short, the attorney was sanctioned by the court and had to withdraw from the case. We came close to losing the firm’s biggest client as a result. However, these foreclosure mill attorneys file false affidavits all the time and they are never called to task. The judges just turn a blind eye even when you show them that the affidavit is false.

    Sorry for the rant but I had to get that out.

  13. Anonymous,

    I have challenged the foreclosing entity on standing. I have raised several issues including the claim that these are Massachusetts or Business Trusts and under Florida law, the trustee cannot bring suit without joining the all the members of the trust. Willey v. W. J. Hoggson Corporation, 90 Fla. 343, 106 So. 408 (1925). Additionally, Florida case has held that the trustees of a business trust cannot maintain suit on a note and mortgage payable to a trust, absent statutory authorization in the state of its origin. Corcoran v. Brody, 347 So.2d 689 (Fla App. 1977).

    As usual, there has been no response to answer and affirmative defenses.

    In addition, I have also raised the issue of chain of title. I have not raised the issue of SWAPS as I am not well versed in that and feel as though I will fall on my face in court trying to argue my point.

  14. 60 B is used for new evidence – after a judgment. If this applies start researching cases in which it was successful. Will also try to look for you.

  15. hello everyone,

    it was a long day finally i just finished my brief for my appeal at the bankruptcy appellate panel of the ninth circuit court in northern california. i have to work on certification of related cases required by BAP rule 8010 (a) – 1(c). this is so hard for me to do, need some info please . i have until monday to submit the brief. i think i need the help of abby here looking for a related case under federal civil rule 60 (b)., all known related case. thank

  16. Ok Abby – will email you – do not have outlook express – so make sure not spammed. Not good at setting up account stuff. Will be out tonight but contact me back tomorrow.

  17. abby:

    If not in federal court – find comparable state rule to FRCP 60b.

  18. Anonymous-
    you can email me at carra2009@gmail.com

    you can always set up a gmail account for just responding to LL.

  19. Abby

    I hear you. Problem is the courts – do not know how and when the courts went wrong – and against the people. My biggest complaint to the attorney I work with – is – even if we can help some people avoid foreclosure – what about all the people who have been foreclosed upon and with no recourse?

    I understand what has been done – my own situation is a nightmare. You bet it is difficult for any folks to battle what has gone on. Courts are sticklers for details in the law – even if it means sacrifice of what is really right.

    You need to go back to court with “new evidence” under rule 60-B – and bring up all these issues – including possible fraud in court.

    Chase stops filings due to 15-D – they simply do not have to file – and there are no requirements to file any information about default swaps.

    I keep emphasizing that we must get to Congress. I have long held that my concerns are not only for myself – but all others that have been harmed – and, again, my case is a whooper. We need to restore justice and equity to all those that have been harmed – and the courts must be informed as to what is really going on.

    There are so many to blame – but what has Congress done to help?? Nothing.

    I want you to have hope no matter what negatives we face. This is why I am bothered that Neil appears to have “flown the coup”. You can take this as far as you like. I will help if I can. Must find someway to contact you individually – but cannot give myself away. I must contact you. Do not lose faith – keep plugging.

  20. Anonymous–we are sort of just on here learning about these trusts that our loans may or may not have been in.

    In my case, as I mentioned it took almost 9 months for me to learn that this new entity which appeared on some recordings was actually the ‘security trustee’ during the foreclosure. I could not figure out why this entity U.S. Bank, N.A. was ever involved since I never had payment coupons to them or never had I made any payment to them.

    It is very difficult for common folks on her to find out all these nuances to what happened to their loan after it was closed. It was all done so clandestinely!!!

  21. Anonymous–why would Chase suddenly/abruptcly stop filings on the trust my loan was in (per them) with the SEC. It, from what I can tell, was formed in 2006 but by mid-2007 they stopped filing with SEC including any of the investor profit type statements.

    JPMAC 2006-NC1

    Just curious why Chase did not continue to file.

  22. THEY ARE REALLY HIDING SOMETHING!!!!

    Federal Reserve Says Disclosing Loans Will Hurt Banks (Update1)
    Share | Email | Print | A A A

    By Mark Pittman

    Aug. 27 (Bloomberg) — The Federal Reserve argued yesterday that identifying the financial institutions that benefited from its emergency loans would harm the companies and render the central bank’s planned appeal of a court ruling moot.

    The Fed’s board of governors asked Manhattan Chief U.S. District Judge Loretta Preska to delay enforcement of her Aug. 24 decision that the identities of borrowers in 11 lending programs must be made public by Aug. 31. The central bank wants Preska to stay her order until the U.S. Court of Appeals in New York can hear the case.

    “The immediate release of these documents will destroy the board’s claims of exemption and right of appellate review,” the motion said. “The institutions whose names and information would be disclosed will also suffer irreparable harm.”

    The Fed’s “ability to effectively manage the current, and any future, financial crisis” would be impaired, according to the motion. It said “significant harms” could befall the U.S. economy as well.

    The central bank didn’t say when it would file its appeal.

    Fed lawyer Kit Wheatley told Preska in a conference call today that she did not know how long it would take for the Fed board to search the New York Fed for records.

    “We really don’t know what’s in New York,” Wheatley said. “We don’t control the system of record-keeping in New York.”

    The Standard

    The Fed’s lawyer went on to say that she did not know what records would fall under a “delegated function,” which would be a task assigned to the New York Fed.

    Preska interrupted Wheatley, saying that “Ms. Wheatley, I held that’s not the standard. You didn’t search under the regulation. You’re supposed to search under the regulation.”

    Preska scheduled another conference call for 2:30 p.m. today to discuss the schedule for a search of the New York Fed.

    “Nobody is going to deny you your right to an appeal,” Preska said on the call, “We’re going to do it expeditiously, not in a piecemeal fashion and hand it all off to the Second Circuit.”

    The Fed has refused to name the financial firms it lent to or disclose the amounts or the assets put up as collateral under the emergency programs, saying disclosure might set off a run by depositors and unsettle shareholders.

    Bloomberg LP, the New York-based company majority-owned by Mayor Michael Bloomberg, sued on Nov. 7 under the Freedom of Information Act on behalf of its Bloomberg News unit.

    Public Interest

    “Our argument is that the public interest in disclosure outweighs the banks’ interest in secrecy,” said Thomas Golden, a lawyer with New York-based Willkie Farr & Gallagher LLP who represents Bloomberg.

    Preska’s Aug. 24 ruling rejected the Fed’s argument that the records should remain private because they are trade secrets and would scare customers into pulling their deposits.

    “What has the Fed got to hide?” said Senator Bernie Sanders, a Vermont independent who sponsored a bill to require the Fed to submit to an audit by the Government Accountability Office. “The time has come for the Fed to stop stonewalling and hand this information over to the public,” he said in an e- mail.

    The Clearing House Association LLC, an industry-owned group in New York that processes payments between banks, filed a declaration that accompanied the request for a stay.

    Negative Consequences

    “Experience in the banking industry has shown that when customers and market participants hear negative rumors about a bank, negative consequences inevitably flow,” Norman Nelson, vice president and general counsel for the group, said in the document. “Our members have accessed the discount window with the understanding that the Fed will not disclose information about their borrowing, especially their identity.”

    Members of the Clearing House are ABN Amro Holding NV, Bank of America Corp., Bank of New York Mellon Corp., Citigroup Inc.Deutsche Bank AG, HSBC Holdings Plc, JPMorgan Chase Inc., UBS AG, U.S. Bancorp and Wells Fargo & Co.

    The case is Bloomberg LP v. Board of Governors of the Federal Reserve System, 08-CV-9595, U.S. District Court, Southern District of New York (Manhattan).

    To contact the reporter on this story: Mark Pittman in New York at mpittman@bloomberg.net

    Last Updated: August 27, 2009 09:58 EDT

    DeliciousDiggFacebookLinkedInNewsvinePropellerYahoo! Buzz

  23. Alina:

    Ok. Go back in and look under 6/30/05 under File/Firm number 333-120966. This appears to be prospectus for 2005-6 – no schedule provided. This file/firm number also includes 2005-5 and 2005-4 -earlier filings. There appears to be no documents for “HEAT” – “Home Equity Asset Trust” – they are, instead filed under “Credit Suisse First Boston Mortgage Securities Corporation” who was subsidiary to CS and depositor for said trusts. “Home Equity Asset Trust” appears to have been added by someone. LEXIS directs any “HEAT” to “Credit Suisse First Boston Mortgage Securities Corporation” – which was the off-balance sheet SPV of Credit Suisse.

    As I have said, SEC claims they did not have to file “mortgage Schedules”, but I have seen letters from SEC requiring submission of the Schedules. SEC claims “aggregate” submission of computational materials is OK. But if no schedule was ever filed – how does anyone prove that mortgage loan was ever even “targeted” for a specific trust and series. Sounds questionable to me..

    Been reading recent foreclosure decisions from courts. Appears to be very difficult to challenge once foreclosure has gone through. Most of cases, however, are not challenging as to whether the trustee had actual right to act on behalf of trust for loan that had been – likely long removed from trust. This is Neil’s concern that foreclosure case are not coming in on behalf of consumer. But feel consumers have not questioned standing in cases that have been decided. SWAPS and “chain of title” are not even mentioned,.

  24. thank you so much Anonymous,

    I found the pdfs. I went through from 7/21/05 through 12/29/05 but could not find anything related to HEAT 2005-6. It really is getting curiouser and curiouser.

  25. Sorry – last email was meant for alina – not abby – but you can read too abby.

  26. Abby

    Your trust was hard to find – had to go to LEXIS to find dates filed and then back to SEC – much was not filed to this trust series. Found this in an exhibit:

    CREDIT SUISSE FIRST BOSTON
    HOME EQUITY ASSET TRUST 2005-6
    DERIVED INFORMATION [7/15/2005]
    [$800,000,100]

    “Although a registration statement (including the prospectus) relating to the certificates discussed in this communication has been filed with the Securities and Exchange Commission and is effective, the final prospectus supplement relating to the certificates discussed in this communication has not been filed with the Securities and Exchange Commission. This communication shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any offer or sale of the certificates discussed in this communication in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state. Prospective purchasers are referred to the final prospectus and prospectus supplement relating to the certificates discussed in this communication for definitive Information on any matter discussed in this communication.”

    I could not find the 424B5 prospectus for this series (6a – has a supplement filed). Without a prospectus – no securities could be sold to public.

    Now, I can walk you through finding SOME documents on the SEC website – but these documents do not have attached Mortgage Schedules. (Found a few series just before or after yours that do have attached Schedules).

    I you want to look at those – go to http://www.sec.gov – click on “search for companies” , type in “Credit Suisse First Boston Mortgage Securities” Then, when list comes up – click on the first entry (CIK # 0000802106). Next – keep clicking on “next 40” at bottom of page until you get to dates around 7/28/05, 7/27/05, 7/29/05 and 7/21/05 some of these are yours. As you are clicking through “next 40” you will notice that some entries say “scanned pdf” – if you click on – you will see that “scanned pdf” is large file – that is a mortgage schedule. (scanned pdf’s take awhile to come up – wait)

    Credit Suisse used subsidiaries to purchase mortgages and subsidiaries to sell the mortgages to (the depositor), and Credit Suisse subsidiary was the security underwriter. The path is very direct for Credit Suisse.

    Want to say again, that the certificates to all trusts are sold the security underwriters. Credit Suisse may repackage or pass-on securities to other investors – but the pass-on is just a pass-through of receivables (accounting students know receivables is a “current” cash payment owed). The mortgage loans and mortgage themselves are not passed on to subsequent investors. They remain on the books of CS – and most trusts were set up as “off- balance sheet” to reduce liabilities – in other works “bankruptcy-remote” to creditor liability for the security underwriter. Most of the “investors” pass-through securities were dumped in the crash – and along with the mortgages/loans – also remain on bank’s books. the “TOXIC ASSETS” which Wall Street is trying to repackage to make more attractive to investors for pass-throughs.

    Investor pass-throughs such as CDOs were leveraged and leveraged, again, against the collateral in the original trust. That is what the trust is – a “parking spot” for the collateral upon which multiple derivative securities were written for investor securities pass-throughs to investors. Security underwriters own the trust.

    Would love to see Bank of America win appeal as the details of securitization may then be exposed. However, even if this happens it will take years – and many more victims will not hold on. As long as “housing” recovery (I do not think there is actually a recovery going on), is promoted – Congress will do nothing and foreclosures and fraud will continue.

    Also, again, if you find your loan in Mortgage Schedule it does not mean it ever made it there – Mortgage Schedules were preliminary and no updates were required for reporting due to 15-D suspension of filing.

    And defaults are charged-off and sold to swaps holders, which are TRADED among parties without transfer of any securities because swaps are contracts – not securities..

    SWAPS are a huge market – and works against consumers as to identify of the holder. Consumers have little law for protection but we do have the FDCPA and new TILA amendment which state that the actual creditor must be identified – if it is with swap holder – they must be identified. I have seen no court address swaps – and government is scared stiff of collapse of swap market which is HUGE.

  27. Thanks Anonymous,

    The name of the trust is Credit Suisse First Boston Home Equity Asset Trust 2005-6. I came across this a few months ago:

    Date of Release: 2005-09-02
    Credit Suisse First Boston Mortgage
    Securities Corp. Home Equity Asset Trust
    2005-6
    Rates Series 2005-6
    Dominion Bond Rating Service (“DBRS”) has assigned the above ratings to Credit Suisse First Boston Mortgage Securities Corporation Home Equity Asset Trust 2005-6.
    The AAA ratings on the Class A certificates reflect 20.45% of credit enhancement provided by the subordinate classes, initial overcollateralization, and monthly excess spread. The AA (high) rating on Class M-1 reflects 16.75% of credit enhancement. The AA rating on Class M-2 reflects 13.45% of credit enhancement. The AA rating on Class M-3 reflects 11.50% of credit enhancement. The AA (low) rating on Class M-4 reflects 9.70% of credit enhancement. The A (high) rating on Class M-5 reflects 8.50% of credit enhancement. The “A” rating on Class M-6 reflects 6.90% of credit enhancement. The “A” rating on Class M-7 reflects 5.60% of credit enhancement. The A (low) rating on Class M-8 reflects 4.50% of credit enhancement. The BBB (high) rating on Class B-1 reflects 3.60% of credit enhancement. The BBB rating on Class B-2 reflects 2.65% of credit enhancement. The BBB (low) rating on Class B-3 reflects 1.75% of credit enhancement. The BB (high) rating on Class B-4 reflects 1.25% of credit enhancement. The ratings of the certificates also reflect the quality of the underlying assets and the capabilities of Wells Fargo Bank, N.A. (66.1%) and Select Portfolio Servicing, Inc. (33.9%) as Servicers, as well as the integrity of the legal structure of the transaction. U.S. Bank National Association will act as Trustee. In addition, the trust will enter into an interest rate swap agreement with a Credit Suisse First Boston International as the swap provider. The Trust will pay to the swap provider a fixed payment at 4.30% per annum and receive from the swap provider a floating payment at LIBOR. Interest and principal payments collected from the mortgage loans will be distributed on the 25th day of each month commencing in September 2005. Accrued and unpaid interest will be paid to the Class A notes, followed by accrued and unpaid interest to the subordinate classes. Unless paid down to zero, principal collected will be paid exclusively to the Class A notes until the step-down date. After the step-down date, and provide d that certain performance tests have been met, principal payments may be distributed to the subordinate notes. In addition, provided that certain performance tests have been met, the level of overcollateralization may be allowed to step down to 2.50% of the then-current balance of the mortgage loans. On the closing date, the depositor will deposit approximately US$147,977,012 into a segregated account, which the trust will use to buy additional mortgage loans from the depositor after the closing date and on, or prior to, the November 2005 distribution date.
    The mortgage loans in the Underlying Trust were primarily originated by Decision One Mortgage Company, LLC (23%) and CIT Consumer Finance (18%). As of the cut-off date, the mortgage loans will have an aggregate principal balance of US$652,023,088. The weighted average mortgage rate is 7.155%, weighted average FICO is 631, and the weighted average combined loan-to-value ratio is 87.51%.
    DBRS’s rating definitions and the terms of use of such ratings are available at http://www.dbrs.com.

    As you stated a 15-D was filed in December 2005.
    HEAT 2005-6 became a sub-HEAT to the 2006-5 trust.

  28. All-be informed–lots of relevant newstories posted today on Huffington Post. AIG etc.

  29. FROM NY POST 8/27/09

    CREDIT DEFAULT SWAPS BIGGER THAN MADOFF!!

    August 12, 2009 —

    HARRY Markopolos — the whistleblower on Bernie Madoff who proved to be much smarter than the SEC — says there are evildoers out there who will make the Ponzi scum “look like small-time.” Markopolos gave a speech to 400 of the faithful at the Greek Orthodox Church in Southampton and predicted major scandals will soon be revealed about the unregulated, $600 trillion, credit-default swap market. “To put it in simple terms, it is like buying fire insurance policies from five different insurance companies on your neighbor’s house and then burning down the house,” he said. After his lecture, Hampton Sheet publisher Joan Jedell reports Markopolos was feted at a dinner at Nello Summertimes hosted by John Catsimatidis and his wife, Margo, who were joined by Al D’Amato and Greek shipping magnates Nicholas Zoullas and Spiros Milonas.

  30. Alina:

    Have also spoken with SEC regarding missing mortgage schedules – SEC claims they did not have to file and the SEC could not enforce filing.

    You are not alone regarding problems in court. Cannot discuss details here for what I have witnessed, but something is very wrong. This is why issues must be brought before Congress – as a whole.

    usedkarguy – believe you are referring to PMI – private mortgage insurance which I believe is required when loan are sold to GSE. What you see is probably estimate of of excess of amount owed over exceed the equity. Do not know much about this. Found below.

    MORTGAGE INSURANCE
    In the event that the loan you are requesting from the lender exceeds 80% of the market value of the property being mortgaged, the lender will generally require you to pay for obtaining a mortgage insurance policy. This protects the lender if you default on your loan and the equity in the property is not sufficient to cover any losses the lender incurs as a result of that default. Depending on the amount by which the “loan to value ratio” exceeds 80%, the first year’s premium generally ranges from .35% of the loan amount to 1% of the loan amount.

    Back to Alina Discovery is very difficult – if and when you finally get it – plaintiffs will probably “object” to most requests.

    Another issue not discussed here is the fact that the trusts were set up as Real Estate Mortgage Investment Conduits (REMICs), for which rules and regulations are governed by the Internal Revenue Service (IRS). Despite fact that mortgage loans cannot be assigned to trusts beyond 90 days of closing date of trust (there is a 2 year exception for “substitute” mortgages that is very restricted), I see assignments to trusts years after the trust has closed. Also, as discussed Power of Attorney is very often invalid. Look at what you have and try to evaluate any “impossibility” regarding plaintiffs claims.

    I am sure you have checked thoroughly in trusts for schedule but if you can provide name of trust I will also research – sometimes they are hidden in SEC filed documents- that is filed under the name of SPV itselt (not a specific series) and not electronically filed but filed under “scanned pdfs”. But very likely if you cannot find – it is not there.

    For anyone interested, I believe Bank of America is appealing Greenwich decision.

    Cheryl’s question is difficult – I am sure this is not publicly available. Site called “Chapter 12” “Holder Demand for Repurchase” gives information about required forms – but do not think you will ever find these forms in SEC docs.
    Fannie Mae is private entity backed by government. Hedge funds are private entities, as are many “debt buyers”. You will find little in SEC docs.

    For those that do file information, much was not required to be publicly filed by SEC. All of this deregulation was implemented to make US more internationally competitive in financial services. However, the result was rampant abuse – in many areas.

    Combined lack of publicly available information, and limited discovery in courts, allows consumers to be taken advantage of. Must look for inconsistencies and impossibilities in information available to counter claims.

  31. Anonymous-
    thought about it overnite. Chase had to have put it in their trust with the new loan number otherwise they are lying to IRS as they sent me a 1099-A after the foreclosure which lists the trust info on it c/o Chase Home Finance.. This forms is called Acquisition or Abandonment of Secured Property (copy B). It lists the ‘fair market value’ of the home,which in my case, was much higher than the trust bought the house for (from itself) at the trustee’s sale.
    FMV = 625,000 and the security trustee bought it for 485,000. This I am still pondering this & its implications.

    Alina- None of my QWRs, rescission letters, demand letters etc, were responded to either.

    I’ve never heard of an ‘unlimited’ extension either. In my case the opposing legals have ‘asked me’ for extensions.

  32. Anonymous,

    Thank you so much for your extremely insightful information. In my case, the loan schedule was not filed with the SEC. I have located the amended PSA and the prospectus. The schedules to the PSA are all blank. I have tried countless different ways to locate my loan. I firmly believe the plaintiff does not have the loan.

    However, my letter of rescission went unanswered. I have sent 3 QWR’s, all of which have not been responded to nor have they even acknowledged receipt . I have filed discovery in court, plaintiff has asked for an extension and the judge has given them an unlimited extension. I have never seen that happen before and I have been a civil litigation trial paralegal for 20 years. I feel that every turn I take, I am met with a brick wall that is 100′ high.

    I also sent them an e-discovery preservation letter.

  33. A: not sure about title/insurance info, but the 35% default insurance is surely specified. do you know if that is for the principal balance or the total payback amount ($164k vs $430k)? Also, my servicing history shows multiple notifications of the Mortgage Insurer “MI notified (23k)” . are these claims paid in lump sum or does the servicer remit partial claims as the loan approaches the 180 day mark? I have a sneaky suspicion the original default forced extinguishment and they collected way back in December 06.

  34. I second Cheryl’s question. If you could post the answer here, that’d be great!

  35. Erlinda –

    I got your 2 e-mails but there was not a response on them. Thanks.

  36. i can’t seem to get your right email. send you twice email but it came back to my inbox as failure. i am not really a computer person.

  37. Where do you look in the SEC for a Fannie MAE loan dated 8/10/07 and was supposedly a Holder Demand for Repurchase to BOA in 8/10/08 or 9/10/08?

    Thanks for any help.

  38. erlinda,

    lets share for facts about litton!
    tymeflyz-at g mail

  39. Abby, thanks for the info. I looked at all the CWABS FWP documents from 2007 and haven’t been able to find my loan number. How do you know if the number’s been changed or not, and what it may have been changed to? I’m glad you pointed out the ZIP codes in those documents–I hadn’t noticed those. It gives me another search possibility.

  40. Thanks again Anonymous. You being on here last couple of days has helped so many of us!!

    You are like an angel!

  41. usedkarguy

    Not sure what you are saying. Lenders Title Insurance is required at mortgage origination – and everything must match including loan number. May be confusing hazard insurance with Lenders Title. Lenders title insurance is for full principal amount. Trust inclusion requires both lenders title insurance and hazard insurance.

    Abby –
    Your loan may have been targeted to have been included in the trust – but never made it there. Trusts must identify exact loan number- this is apparent. Changed loan number is not good -for more reasons than I can express here. Please, even if you think you spot your loan on original schedule – it does not mean it is there.

    Changed loan number is important – and should be emphasized in court.

  42. when I found my loan, under ownership of the 1999 WF/NW trust, there were three different account numbers used to reference my loan. I don’t have my paperwork with me, but one was the original loan number, the other was a “reference” number, and the third I think referenced a title policy or something. not sure. the sec info will also disclose the amount (percentage) of coverage purchased, type of property, rates, caps, floors, etc. by the way, is the (35% in my case) coverage amount listed for the (a.)principal amount or the (b.)total payback on the 30-year note? Thanks a

  43. Anonymous
    Yes, mine was definately changed once Chase bought the 4200+ loans from Ne Century (at that time I did not know of the sale and merely accepted that it was due to change only in servicer).

    The new Chase loan number DOES NOT appear in any filings at SEC. But I can see my loan $$ amount and the right zip code.

    Will see what comes out of discovery when/if answered soon.

    M. Soliman-thanks for tip –will check later

  44. Abby:

    Also have to question whether account number was changed. Many servicers change account number because loan never went to trust. Everything must match exactly. And, even if mortgage loan was initially included under original schedule – it does not mean that the loan stayed there. Again, could have been removed as “scratch and dent”, and would have been removed if in default. Schedules are not reported as updated to SEC and are preliminary for SEC document initial filings. Issuers then file SEC document 15-D, which suspends further filings to the SEC.
    Even if you think your loan matches one on original schedule – it does necessarily mean your loan is there. It just means your loan was funded by the stated security underwriter at or before mortgage closing and part of agreement for sale of the mortgage loans to security underwriter. What happens from there is the question. If your loan was ever targeted for a particular trust, whether or not it remains there, is the shoestring that collector will try to cling to. But shoestrings break and you many never be informed of the break.

  45. To Zurenarrh
    In scouring those SEC documents sometimes even if loan number is not listed, you can find it by looking at the $$amount of loan and the zip code.

    I can spot mine in every document.

    Also, be sure to get what you need in Discovery Phase of lawsuit.

  46. The sales must have been “true sales” in order for the holders of the Note to be bankruptcy remote.

    This is an AWESOME explanation of the problem and where the break downs occur. This will give y’all hope, and as long as we challenge all the documents and request and make a case for more discovery, WE WILL CATCH THE PLAINTIFFS COMMITTING FRAUD!

    http://www.creditslips.org/creditslips/2009/08/show-me-the-original-note-and-i-will-show-you-the-money.html

  47. You guys are getting good. Two points 1) the mortgages are sold to the security underwriters which is shown under “Conveyance of mortgage loans” – thus, it is the bank security underwriter that charges-off. 2) Some mortgages, as discussed, are labeled “scratch and default” from the onset – thereby classified as a “default” non-compliant mortgage – and never get placed into the trust – those are with distressed debt buyers from the beginning..

    All of this is has been concealed by “deregulation” in 2001. So information is not available. You are right mortgage schedules (that many or many not be attached to PSA) are incomplete and not updated. Some issuers never even filed mortgage schedules.

    You have to be astute to see where they are slipping in their chain of claims – including looking at Limited Power of Attorneys. Only Judge I see that has been onto this is the Judge from NY – Kings County.

    Everything is so widespread. This is why is was essential for Congress to protect victims on a whole. Very bad move by Congress to not allow Bankruptcy Bill to go through as real party in interest can more easily be challenged in any bankruptcy cases. However, this is not always the case as Erlinda demonstrates.

    Abby – still keep thinking about coalition for when Congress returns. If anyone can get us in – I live close enough to go.

  48. Wow–the rabbit hole goes pretty deep. But I’m beginning to understand a little better–I think.

    Of course, I’m trying to see how all this applies to my own situation, and like erlinda, I’m trying not to give too much away to the defendants in my case who are surely (if they’re smart) reading this site.

    So let me run this past you folks and see if I’ve applied this new knowledge correctly:

    1. A mortgage goes into “default,” and will either be charged-off or removed from the MBS trust.

    2. This triggers various mortgage insurance policies, credit default swaps, or both–at any rate, the party that does the charging off or the removing from the MBS trust is compensated for its loss.

    3. The charged-off mortgages–which aren’t “mortgages” any more, they’re just “debt” (would that make them “unsecured” debt at this point?)– are sold for pennies on the dollar to default debt buyers who will try to collect the debt by posing as an authorized representative of the original creditor, which they are not.

    I’m not sure if the loans taken from the MBS trust are also charged off by the party removing them from the MBS trust, or if that’s the point at which foreclosure is initiated, or if “charging off” and “removal from the trust” are more or less the same thing (or at least have the same effect).

    What’s interesting about this for my particular case is that I’ve received letters from Recontrust Company, NA about my mortgage which include the usual collection language about “this is an attempt to collect a debt, etc.” Based on the posts today, that sounds as if Recontrust is or was a default debt buyer who bought a charged-off loan (from either Fannie Mae or Countrywide, in my case). In other words, my mortgage has been charged off, meaning that it is no longer a mortgage, it is an unsecured debt, meaning they don’t get to take my house.

    But wait, there’s more: Recontrust Company, NA was the original trustee on my Deed of Trust. When the foreclosure was being initiated however, Countrywide “re-constituted” Recontrust as the trustee of the Deed of Trust. That would imply that at some point Recontrust had been “un-constituted” as the trustee of my Deed of Trust, wouldn’t it? Were they “un-constituted” so they could buy my loan in an attempt to collect and then “re-constituted” so they could foreclose?

    Based on today’s posts, it would seem that maybe I was being a little too despondent when I previously said that drafting a complaint seems all but impossible. Because knowing about the charge-offs and pool removals, it seems that one has only to allege that the mortgage was charged off and its owner at the time reimbursed by credit default swaps and insurance (and bailout?), making the mortgage an unsecured debt that negates the right of any party to foreclose. Then let them deny or affirm such an allegation.

    I am in a non-judicial state, so I am the plaintiff. If what I’ve said above is accurate or close to it, that adds a new wrinkle to things–our complaint may be due for an amendment.

    Thanks for all helpful and knowledgable posts, everybody–keep ‘em coming!

  49. Zurenarrh: See applicable “FNMA Trust Indenture” for time period when loan originated, at the end (available on FNMA’s web site): In that document, FNMA has withdrawn all references to “repurchasing” mortgage loans. FNMA, in the “Indenture” says that basically, if the loan is a non-performer, the “Trustee” (FNMA) will remove it from the pool. They may do other things. They may compensate the certificate holders. I believe that the type of certificate will be determinative of whether or not there was insurance in place to cover the “loss.” But the “loss” is not the Trustee’s, not the Servicer’s. There was usually over-collateralization, which itself is a form of insurance.

    This “Trust Indenture” language is similar to other, non-GSE “Trust Indentures” I have seen.

    FNMA’s Trust Indenture (for one particular period, there are several) states:
    (Article III Declaration of Trust, Section 3.01 Declaration) “By the act of issuing a Certificate hereunder, FNMA shall be deemed to have declared that (a) FNMA, acting in its capacity as Trustee, is holding all of the related Trust Fund (including the Mortgage Loans, or a Participation Certificate(s) evidencing specified beneficial interest therein, comprising the related Pool) in trust for the exclusive benefit of the Holders of the Certificates evidencing Fractional Undivided Interests in such Trust Fund, and (b) FNMA will issue the Certificates, will service all such Mortgage Loans and will administer all such Certificates in accordance with the terms of this Trust Indenture and the applicable Issue Supplement.”

    (Article IV Mortgage Loans, Section 4.01 Conveyance of Mortgage Loans) “Concurrently with the execution and delivery of an Issue Supplement, FNMA shall transfer, assign, set over and otherwise convey to the Trustee, on behalf of Holders of Certificates evidencing Fractional Undivided Interests therein, all of FNMA’s right, title and interest in and to the Mortgage Loans identified in the attached Mortgage Loan Schedule, including all payments of principal and interest thereon received after the respective date or dates on which the Issue Date Principal Balance was determined (other that payments permitted to be retained by FNMA by the terms hereof, including payments of principal and interest due on or before the Issue Date.”

    If there is a disconnect between what the parties to these agreements (“Trust Indentures,” MLPA’s, PSA’s, etc.) had said they were going to do, and what they actually did do (FASB accounting, off/on balance sheets, etc.), then those misrepresentations (or outright frauds) are relevant to THOSE parties and the certificate purchasers. Those acts do not somehow give them standing to foreclose if they have previously declared that they had given up all “right, title and interest in the Mortgage Loans.” For a borrower defending an action to foreclose, the plaintiff has the burden of proving standing. When challenged, “Trustee” plaintiffs are crawling back into the woodwork and refusing discovery rather than reveal the “Real Party in Interest” or their “creative” “Enron-esque” accounting methods. The latter includes FNMA’s more recent practice of NOT revealing the actual Mortgage Loan Schedule(s), not even to the investor/certificate holders, in direct contradiction to the referenced “Trust Indentures.” Many PSA’s and MLPA’s are incomplete as to lists of actual mortgages, but that should create a bigger problem for the pretender lenders than for the Borrower.

    There is a big difference between defending a foreclosure against pretenders, who, if challenged, must prove standing and bringing an “offensive” action that must target shadowy entities with specificity.

  50. BTW, I KNOW WHO BOUGHT MY LOAN FROM RESIDENTIAL MORTGAGE CAPITAL. I WILL NOT TELL WHO BECAUSE OF MY LITIGATION PENDING. I WANT LITTON TO BE ON DEFENSIVE SIDE . I KNEW WHO IS THE SPONSOR, WHO IS THE UNDERWRITER OF THE ISSUING ENTITY, THE REGISTRANT NAME , THE SPONSORS NAME, THE MASTER SERVICER, THE TRUTEE OF THE SECURITIES AND SOME OTHER SERVICES AND SUB SERVICER. IF YOU WERE BEING FORECLOSE BY LITTON MAYBE WE COULD SHARE SOME NOTES AND COMPARE OTHER CHARACTERISTIC THIS LITTON SERVICING, L.P. HAVE IN THEIR STRATEGY TO FORECLOSED.

  51. i filed a motion to set aside the entry judgment in the bankruptcy court against litton loan servicing for granting the relief from automatic stay. the court denied the motion without giving me a chance to present my side and new evidence against litton. i have only 10 days to file an appeal to bankruptcy appellant panel, the court erred in his decision because no judges wants to reverse their decisions. unfortunately, the lawyer misrepresented me and went to the hearing unprepared to argue my case. well i terminated him now i am representing as PROS Se. how could a judge grants to continue the foreclosure when the evidence submitted by litton loan servicing, L.P. were all altered? the promissory note and the deed of trust were – the original loan number were covered by black hi-lite, page 2 of my deed of trust were omitted
    intentionally. on my motion to set aside judgment, i asked the court to null and void the foreclosure because of litton lack of standing and fraudulent documents.. on my deed of trust, only the trustee and the beneficiary has the power of sale when i defaulted, in this case litton is the one claiming as duly authorized servicing agent for residential mortgage capital its successors and/or assign, the residential mortgage capital is my lender on my deed of trust. there were no recorded assignment of deed nor a recorded substitution of trustee. i knew litton is exposing themselves for another big litigation, i will pursue this case because i believe litton committed a “MASSIVE FRAUD”. JUDGES NEEDS TO BE EDUCATED AND SHOULD ATTEND NEIL SEMINAR IN ORDER FOR THEM TO HAVE UNDERSTANDING ABOUT THE FORECLOSURES CRISIS THAT DAMAGE OUR ECONOMY. ANY SUGGESTION FOR ME TO DO MY BRIEFINGS WILL REALLY APPRECIATED. MY TIME IS TICKING I HAVE UNTIL SEPT 4 2008 TO DO THIS APPEAL UNDER BAP UNDER COURT OF APPEAL.

  52. zurenarrh

    Very good research. The documents filed with mbs issues are massive and it is very difficult to weed through everything. Securitization of mortgages act the same way as credit card, autos, student loans, etc., and in all cases only the “receivables” not the loan itself, are securitized. Defaults after certain amount of days are subordinated to lowest tranche of the trust. Usually the servicer has a small financial interest in that tranche. The servicer then sells the defaults are (only the right to collect is sold) directly to third party debt buyer or removes defaults from trust by to a swap holder for the derivative credit default swap. Only the right to collect is sold – not the “account” since the charge-off means you cannot sell the account. Also, in the case of the swap – the security related to trust never changes hands. A swap is a contract – not a security. The “credit enhancer” to the “default” tranche has been paid a premium to insure that they will purchase the defaults for a price when the defaults occur. Usually, servicer will wait till they have a “pool” of defaults to swap or sell the right to collect to swap holder/third party. At this point, neither the servicer nor the trustee to the trust has any other interest in the debt and cannot act on behalf of the trust.

    Because the mortgage crisis hit so hard and fast many “credit enhancers” swaps contract holders were unable to perform their duty to purchase the defaults. Thus, the defaults remain(s) on books of security underwriter Bank. Many of the debt buyers are also TARP recipients, and the market for debt buying has progressed since the height of the financial meltdown.

    This has long been a problem with credit card default collection. The servicer claims to be acting on behalf of the original creditor when, in fact, the debt has been sold/swapped to another party. If you see “services, or NA” in the name of the party trying to collect for original creditor (credit card)- the debt buyer is trying to attach itself to the original creditor who is not the real party in interest. It is not the original creditor – but instead a default debt buyer who now owns the right to collection. i verified this process many times with the Securities and Exchange Commission and Comptroller of the Currency. Unfortunately, the issue is not usually litigated in court because before a point of real discovery is reached – the debt buyer will settle. So case law is weak.

    This is also happening with foreclosures. Borrowers are scared, unknowing, and without the ability to litigate against powerful plaintiffs. The media has portrayed foreclosure victims as “bad” people who spent “over their means”. So foreclosure are going through under trustee for such and such trust – which is often false. Debt buyers justify this, in their minds, by telling themselves that the swap attaches them to the trust. But the swap DETACHES them from trust. Assignments are fabricated and Power of Attorney’s are false. Holding the note, as “In re Wells” – Ohio June 19, 2009 shows, is not sufficient – the plaintiff must show they have the right to collect. If borrower gets discovery and knows to challenge the real party in interest, discovery is usually fought tool and nail to prevent disclosure of the real party in interest. Debt buyers have far better chance in court to effectuate a foreclosure by claiming to be acting on behalf of a trust – so that is what they falsely do. Irony is that the default mortgages are sold by servicers to third party/swap holders for a lot less than the full principal balance owed -which is why financial services industry fought against the Bankruptcy bill in Congress. The bill would have allowed mortgage principals to have been written down and discharged – this would kill the swap game and debt buyer business.

    The Greenwich/Countrywide case is interesting for more than distinction between “purchase” and “repurchase”. Greenwich’s full name is “Greenwich Financial Services Distressed Mortgage Fund”. This title implies that they are a debt buyer (once mortgage is in default or charged-off it is no longer a mortgage but converted to a debt). If indeed Greenwich “Distressed” purchased default/charged-off mortgages (now debts) from Countrywide – then Neil is right “repurchase” is correct term. If mortgage loans are modified, as the Attorney General settled, Greenwich Distressed could try to demand that Countrywide, as the servicer seller of the defaults, “repurchase” the altered loans.

    But the PSA does not refer to sold/swap mortgages that are removed from the trust – it refers to mortgages while they are in the trust., and in those instances a servicer can only “purchase” a mortgage from the trust – repurchase does not apply because the seller never owned anything that they could “repurchase”.

    Here I go again – on and on. Government does not disclose all of this to public and media just does not get it. Government wants distressed mortgage debt off the books of the banks, and as result, foreclosures proceed falsely in courts of law – often without question as to who really owns the mortgage (debt). Financial markets cheer home prices “corrections” in hopes the economy is recovering.

    I understand that there a bigger picture out there – save the US financials and the economy. But, as everyone here would agree – we do not want to be the “casualty” or sacrificial lambs. The mortgages were likely predatory from the onset, with inflated appraisal, false and concealed terms, and often executed under a false actual “lender” name.

    Not only do we really not know who owns the right to collect (mortgage) debt, we are never given the opportunity to negotiate with the real debt owner to modify the “debt” terms.

    Do not know how to get to government or let public know that WE know. I have taken many paths to accomplish this – with no success.

  53. It really sucks for homeowners who are under the impression that they will be getting a loan modification from their lender, whether in house or through Making Home Affordable, only to be turned down because the investor will not agree to the modification. Things are looking up for homeowners though due mostly to recent legislation…

  54. In reply to BOA Ken Lewis’ response that BOA was in compliance with Fannie Mae that is a lie. Fannie mae had holder demand for repurchase in 2008 to Bank of America for not following guidelines and fraudulent issues on my mortgage. OHEO, Fannie Mae’s regulator at the time looked over my mortgage and told me I had a FRAUD loan. Fannie Mae says I do not have a loan with them and the lookup says No. BOA turned me into Fannie Mae or whoever as a Bankruptcy/Reposession which was fraudulent. I WAS NOT in Bankruptcy/Foreclosure. This was reported on my loan activities and history and al the credit bureaus that ruined my credt.

    I do not believe BOA when they tell me they are the investor now, but they were supposedly the investor in 2008. I think I have always had an air loan and that Fannie Mae covered for their big client BOA. None of my dcuments at closing were done on any Fannie Mae forms.

  55. zurenarrh,

    thanks.

  56. Erlinda, a more detailed response regarding links and what not is awaiting moderation, I assume because it has a couple of external links in it and Word Press must have some sort of filter that triggers moderation if external links are provided in comments (just a guess).

    So until that comment is approved, let me try to give you a link without giving you a link, if you know what I mean. I’m going to try to not trigger the filter (if WP is using such a thing)…the site on which I found the info is a site which searches the Edgar database. The site is free to sign up for and is called “secinfoDOTcom”. Enter that into your browser but use a period symbol instead of the word “DOT”.

    You can search CWABS and look at their FWP (free writing prospectus) documents.

  57. Erlinda, here’s the info on the CW prospectus:

    CWHEQ Revolving Home Equity Loan Trust/Series 2007-A · FWP · CWHEQ Revolving Home Equity Loan Trust/Series 2007-A · On 2/1/07
    Filed On 2/1/07 3:05pm ET · SEC File 333-132375-17 · Accession Number 905148-7-969

    I found it at the following site: http://secinfo.com
    It’s best if you sign up for a free account.

    Of course, the above is a prospectus for a HELOC Loan Trust, but the language sounds boilerplate enough to be included in other types of Countrywide prospectuses. I’ll check it out.

    If you have a loan with Countrywide, you may find the prospectuses interesting because they list all the loan numbers in select versions of the prospectuses (these generally seem to be in the “FWP” documents, which is an acronym for “Free Writing Prospectus”). However, I haven’t found my loan number in any of them that I’ve looked at. I assume that’s because my loan was sold to Fannie Mae for securitizing as opposed to being securitized by Countrywide itself for sale to investors. But I don’t know that for sure.

    OK, I looked it up: the same “charge off” language is found here:
    http://www.secinfo.com/dsvrn.v77r.htm#10lz

    The document at that link is the FWP for the “CWABS Asset-Backed Certificates Trust 2006-SPS2 ·”

  58. is there any way you could post the link for countrywide prospectus? this is a very good information for everyone who has loan with countrywide.

  59. Thanks for your response, Anonymous. Clears up a few things while also bringing up other questions. There’s one question in particular maybe you or Neil could answer–and hopefully you’re still willing to break your promise to yourself about not responding to posts–which has to do with the “default debt buyers” you mentioned.

    I had read in a Countrywide prospectus that if loans were defaulted, Countrywide would “charge off” those loans. The whole thing sounded just like what banks do with credit cards–even the time frame was the same–180 days. The fact that a mortgage company would just charge off a mortgage like it was a credit card surprised me for a number of reasons, but mainly because 1) a charge off is basically a tacit acknowledgment that the debt was never really owed in the first place (because the credit offered by the “lender” is offset on the lender’s balance sheet by the asset given to it by the borrower, i.e., the promissory note), and 2) there certainly are no grounds for foreclosure–correct me if I’m wrong–if a mortgage has been charged off and sold to someone who is, to use Anonymous’ phrase, a “default debt buyer.”

    Here’s the Countrywide prospectus on charged-off loans and sale of those charged-off loans to 3rd parties:

    Charged-Off Loans

    “Any Mortgage Loan with a scheduled payment that has not been paid in full within 180 days of the due date for the scheduled payment will be charged off by the Master Servicer (each, a “Charged-Off Loan”). Charged-Off Loans will not include any loan charged-off by the Master Servicer prior to the 180th day after the due date for the scheduled payment on such Mortgage Loan. After a Mortgage Loan has been charged-off, the Master Servicer will discontinue making optional advances of interest on the Charged-Off Loan and the Master Servicer will not be entitled to receive any additional servicing compensation on the Charged-Off Loan. Charging-off a Mortgage Loan will result in a realized loss equal to the outstanding principal balance of the Mortgage Loan.”

    Sale of Charged-Off Loans

    “On a quarterly basis, the Master Servicer will solicit at least two bids from unaffiliated third parties for the purchase of a Charged-Off Loan and sell the Charged-Off Loan to the highest bidder. If fewer than two bids are received, the Master Servicer will foreclose the property securing the Charged-Off Loan to the extent the Master Servicer determines that the proceeds of such foreclosure would exceed the costs and expenses of bringing such a proceeding. The proceeds from any such sale or foreclosure of a Charged-Off Loan (after deducting reimbursable fees and expenses payable to the Master Servicer in connection with such sale or foreclosure) will constitute “Charged-Off Loan Proceeds”. ”

    So my question is, why would anyone buy defaulted debt? Would they do it in hopes of acting as a debt collector on the mortgage? And secondly, how can one know whether or not one’s loan has been sold to a default debt buyer? Furthermore, the Countrywide prospectus says that “the Master Servicer will foreclose the property”–my understanding is that unless a servicer is also a holder in due course, they would have no standing to foreclose.

    The June 1, 2007 Fannie Mae Single-Family MBS Prospectus states that Fannie Mae will repurchase loans from pools if default occurs. Do they then charge off the loan and sell it to default debt buyers? If so, what effect does this have on a “produce the Note” type of action?

  60. Anonymous, you are correct in that you are becoming redundant and transparent. “Thou doth protest too much”.

    All, do not become discouraged and give up the fight …it appears to me that is Anonymous’s objective.

    Keep fighting!!!!!

  61. Promised myself I would not respond to anymore posts – but cannot help it.

    First, to Zarenarrh – Fannie Mae owns your loan. It only matters on whose balance sheet the loan exists. Fannie Mae, via it’s website, informs you as to whether or not the loan is, in effect, on their balance sheet. Fannie Mae hired security underwriters to securitize pass-through of receivables – this is different from the private markets in which security underwriters directly purchased the mortgage loans. Whoever securitized Fannie’s owned mortgage loans was hired only to securitize receivables – not the mortgage itself – Fannie owns the mortgage.

    You are 100% percent correct, the players in the mortgage “MARDI GRAS” have made it to difficult to challenge anyone in a Court of law. By the time you have issued summons to all necessary parties, you have spent a small fortune. It was intended to be this way (changed names/takeovers/bankruptcies, and off-balance sheet conduits do not help. The very creation of SPVs (special purpose vehicles) was to conceal the identity of the actual mortgage owner from potential creditors and liability. This is why the Greenwich case is far more complicated that the district court judge addressed. It will likely takes years to weed through discovery – and in the meantime, what happens to the loan modifications that were the result of the Illinois Attorney General Settlement????

    “True Sale” does not have only to do with assignment and assumptions – but FASB (financial accounting) rules which may challenge as to whether or not mortgage loans were actually a bona-fide sale to the trust. Again, recall Enron, where transfer to off-balance sheet conduit were questioned. It is technical, and beyond scope of discussion here and has not never been adequately addressed in courts of law. The people have no chance in court of law when numerous summons and subpoenas and depositions must be executed – extremely costly, and how can the people prevail.

    The only way “investors”, as you refer to “investors”, could own the mortgages is if distressed debt buyers purchased the “pool” in entirety from the security underwriters (the bank who purchased the mortgage from the subprime originators). Greenwich is a “distressed” debt financial hedge fund – they may own the mortgages – if they purchased the Mortgages/loans in entirety from the security underwriters. However, in this case Greenwich is hiding behind a “trust” in which the mortgages have long been removed and sold to default debt buyers – Greenwich??. Any mortgages that remains in the trust could be subject to a “purchase” by servicer due to modification, and therefore removal from the trust by the servicer for sale to a distressed debt buyer – but not a repurchase – this is impossible as the PSA is explicit and repurchases are not part of of a PSA.

    Neil, at this point, it would be very nice to hear from you as these people have followed you for a long time.

  62. Thanks to all who responded to my Fannie Mae/trust ID posts. I’m not sure where it leaves me, though.

    What strikes me most about all of this is that it seems to be such a cluster-you-know-what that it’s difficult if not impossible to simply draft a complaint and serve it to all pertinent parties. That gives the pretender lenders the breathing room to move for dismissal and/or summary judgment. And the cluster-you-know-what nature of the whole thing makes it difficult to comprehend and sort out for judges, lawyers, the press, and especially us borrowers. Of course, that was probably done on purpose.

    Right now, my complaint alleges that Bank of America f/k/a Countrywide does not own the Note and is therefore not allowed to foreclose. Of course, we don’t really know who owns the Note, but did find on the Fannie Mae Loan Lookup Tool that Fannie Mae claims to “appear” to own the loan. A screen shot of that was included as one of our exhibits.

    It makes sense to me that Fannie Mae would own the Note–or at least claim to, seeing as how my original Lender was Countrywide, and that Countrywide was Fannie’s biggest client at the time and it was widely known and admitted by Countrywide that they sold 99% of their loans to Fannie Mae and/or securitized the loans themselves.

    I found it interesting that Martin brought up CWALTS, as opposed to CWABS. I’ve searched the SEC databases for my loan and haven’t found my loan number listed in any of the CWABS prospectuses from 2007, which is when my refinance was done (August 2007). And there don’t seem to be any CWABS in existence either before or after 2007 (not under that name, anyway).

    How are CWALTS different from CWABS? Of course, CWABS is an acronym for “Countrywide Asset-Backed Securities,” so I get what those are. But what is CWALTS an acronym for? Oh, I just looked it up–“Countrywide Alternative Loan Trusts.” I guess I’ll do an Edgar search on that.

  63. and then it takes us to the “surrender of control” issues, FASB 140, 140-3, extinguishment, etc.

    VIOLA! Securities violations!

  64. Anonymous: It sounds like you bring some expertise to the conversation, and I don’t think Neil would mind another informed opinion (are you informed?). You touched on “true sale”, or bonafide sale upon closing. Assignments and assumptions are proof of such. The big picture is the “less-than-arm’s-length” relationships that exist here. Wells Fargo as Originator,Depositor, Securities Administrator, Servicer, Master Servicer, Custodian, etc., means that they were running the show (underwriting or lack thereof). Just one of 77 or so deals they structured in 05. This enables the securitization process to run in reverse when a loan defaults. My loan technically defaulted as early as November 2006, it was originated in June of 05 (and recorded locally as such). Servicing record stopped referencing the payments we made after December 06 (discovery docs). I believe I have proof of the fraudulent claims (we paid arrearages) made by the servicer for (35%) default insurance in the servicing notes. Foreclosure filed Feb 09 (see previous posts). The specified trust has DEL/FC/BKR/REO percentage totals near or over 40% in the group 2 ARMS (75% of pool). Now Primes are defaulting as well. But loss figures remain around 2-3%. IMPOSSIBLE? No, because of all the funds collected on the Mortgage Insurance.

  65. usedkarguy – found it – your are right!

    Do not want to interfere with Neil’s blog – which is great – and apologize if I have written too much.

    My only point is that the no PSA includes “repurchase” language. PSA is simply agreement between servicer and Trustee and Depositor. Judge in Greenwich does not quote PSA terms as a “repurchase”, and any reference to repurchase is misplaced and not accurate. Only the security underwriters by “Repurchase Agreement” can force subprime originator to repurchase non-compliant loans. The security underwriters own the certificates, and therefore the mortgages/loans to the trust, and subsequent
    securities passed on to investors is only for pass-through of cash payments related to “pooled” mortgage loans which sit in off balance sheet of security underwriters as a special purpose vehicle (conduit) for transfer/sale of mortgages from subprime originators to the security underwriters. The SPV trusts were set up as a “shell” and whether a “true sale” even occurred is another question. Countrywide, as a servicer, has no right to “repurchase” anything because they are not the seller and are not the buyer – they own nothing. – and the PSA gives them no such authority. PSA may strictly limit modifications by the servicer but this was a flaw in Attorney General’s settlement agreement with Countrywide.

    Think judge was not completely informed in Greenwich – and this case will not survive. That is my opinion. Also, Bank of America is in difficult position because they do not want to admit the mortgages/loans/securities (unsold) are on their off/on balance sheet.

    All that has occurred is very disturbing and I feel for everyone here that has been harmed.

  66. On second read: “reasonable belief and doubt” – that’s funny. I guess that’s where I am now, that it’s “normal” for these to co-exist.

  67. Please note: The Fannie Mae lookup tool does NOT assert a FNM claim to “own” a loan. Note that, if the lookup is “affirmative”, the wording is, “It APPEARS that Fannie Mae owns a loan at this address.” Hardly conclusive. Contains “plausible deniability.”

    Freddie Mac, on the other hand, loudly proclaims to the world, “Freddie Mac OWNS this loan.” Probably not true.

    I believe that these “lookup tools” are a deliberate way for these GSE’s to skirt compliance with recently enacted TILA disclosure requirements, providing instead a “convenient” “non-disclosure” disclosure, that is not even worth the electrons that created it on a computer display.

    But they do, perhaps, supply reasonable belief and doubt to Borrowers that could counter another entity’s conflicting claim of “ownership.”

  68. One more thought:

    Government owns FNM.
    Government owns AIG.

    XYZ Lender alleges to own/hold Note, they foreclose on property and asset is owned by FNM.
    XYZ ABS certificate owner alleges a loss and collects from AIG.

    FMN sells asset and collects proceeds.
    AIG pays out CDS agreements.

    FNM is not longer a secondary market and AIG is not longer writing contracts (not in the volume worthy of note)

    I’d bet that one Government Entity is feeding the other?
    Its all a complete FARCE!

  69. One more thing. I have been told by a wall street insider that there is always an entity called a ‘DOCUMENT CUSTODIAN’ so in your discovery you need to be sure they identify ‘who’ the document custodian was/is and the exact dates that custodian had the original note in his/her possession.

    According to the MLSA executed between New Century Mortgage and Chase Acquisition, the original documents were transferred (physically supposedly) over to the document custodian.

    The dates of possession are important for us to get.

  70. I think Fannie Mae operates more like a REMIC or SPV, where they layer the exposure and disclosure. For instance, Countrywide Servicing forecloses on a property, and the Asset becomes owned by Fannie Mae to be resold. However, Countrywide most likely has a CWALT securities pool that FNM is fronting for as an Asset Manager, based on new agreements regarding the new toxic assets, these entities are doubling up on payouts from CDSwaps insurance after charge off, and then collecting from Asset sales.

    The Fannie Mae lookup tool is interesting, but how can FNM claim to “own” a loan at the address, this is BS, they are likely referring to owning a claim based on contractual agreements, but they dont own the Note nor hold the Note.

    Simple fact guys, these Notes were likely destroyed because the “electronic” assignment was viewed as completely acceptable. Had these entities held the physical Note, the cost to ship and store would have been too burdensome, therefore they create MERS. Its only since the Produce the Note Standing issue, that this practice has been reveiled as a complete fraud of the UCC code.

    Set the trap, put the bait, and let the Pretender Lender defraud the Court by submitting false Assignments and Affidavits, survive Summary Judgement and Move the Courts for Sanctions for Fraud and a complete Trial.

    IMHO, every recorded mortgage Assignment I’ve Seen has NO WARRANTY or REPRESENTATION….how can a Judge accept this as tangible proof of a properly negotiated Note and transfer of mortgage balance? The mortgage follows the Note.

  71. anonymous, it’s “Wells Fargo Asset Securities Corporation, Wells Fargo Home Equity Asset-Backed Certificates Series 2005-2”. Pooling and Servicing Agreement shows Bear-Stearns as counterparty (Now owned by JPMorgan Chase), and Citigroup Global Markets as the underwriter. HSBC as Trustee. I have PSA, 10k, 8k’s, Prospectus, etc. When you find this Deal on SECinfo, it shows the owner relationship to the 1999 WFASCorp/Norwest trust. Thanks!

  72. Abby, Anonymous, and Angry,

    Just tell me what I need to do to help with a coalition. I have written letters to my state’s AG, to the FTC, to the President, and to my congressmen. The responses are all boilerplate non-responses.

    I am willing to whatever it takes to get move a coalition forward.

  73. Anonymous and Angry &NTI
    I’d be willing to help organize the coalition.

    carra2009@gmail.com

  74. re–EASY way to find trust info. If your house was foreclosed on. The bank will send you IRS Form 1099-A Acquistion or Abandonment of Secured Property (copy B) ..it will come like around Dec. of year of foreclosure.

    It will have bank name/logo in upper left.

    On right side under Lender’s Information
    will be listed he Federal ID number
    then the trust name and then
    the bank related to the trust.

    Otherwise, you can try to call and ask!!
    Or if you have identified the trustee for securities–call and ask them. Trustee for securities could be on some of your county recordings.

  75. All- if your original lender/originator has filed for bankruptcy you should check around in PACER to see where they are at or if it is a done deal.

    Be aware, that, as in my case with New Century, one can file an Adverse Action (a lawsuit within their bankruptcy) and go after them for fraud, Tila. I am doing this now since I was denied a motion to lift stay so I could do Discovery for my state case.

    I want them!! Gonna get them!!

    AND DON’T FORGET THAT IF YOU ARE VICTIM OF FRAUD, MAKE YOUR REPORT TO YOUR LOCAL COUNTY DISTRICT ATTORNEY OFFICE. THEY CAN GO GET THE CROOKS FOR CRIMINAL ACTIVITIES!!

  76. Angry &NTI
    RE: bkr and death of company

    Depends on the type of BKR…like New Century Mortgage is in Chpt 11 BKR, which is a ‘reorganization’…..their plan is to come out on the other side and do business.

    like GM etc.

    so that is why I am asking….is ‘death’ of a company a bkr 11?

  77. Neil,

    Will you respond to ANONYMOUS, what is your perspective?

  78. Fannie Mae’s online “Loan Lookup Tool” says Fannie Mae “owns a loan” at my address (my original lender was Countrywide).

    In the Fannie Mae Loan Lookup Tool FAQ, it says that if the Lookup Tool says that Fannie Mae owns your loan, that means that “we have purchased your loan from your lender.”

    I know that Fannie Mae’s standard operating procedure is to pool mortgages and sell certificates to investors based on the assets of those pools. How can I find out IF my mortgage is in a pool, and if so, what pool it’s in?

    Prospectuses for Fannie Mae trusts are online, but there are quite a lot of them, and I don’t really know when my loan would’ve been pooled (if at all). The prospectuses I’ve looked at only identify the mortgages by what state they’re from, how many of them there are from that state, and the total amount represented by those mortgages. Other than that, there are no identifying data on the mortgages in the pool, at least in the documents I’ve seen.

    I have a “produce the Note”-esque lawsuit awaiting an answer from Bank of America Home Loans Servicing f/k/a Countrywide Home Loans and would like to be a bit ahead of the curve with my knowledge about the ownership of the Note. It seems that finding out which Fannie Mae pool it’s in (or used to be in) would be useful.

    A complicating factor is that Fannie Mae securities are apparently exempt from filing with the SEC. If anyone can point me in the right direction, it’d be much appreciated. I’ve found the discussion here very helpful, if somewhat over my head at times.

  79. i think i feel sick..
    aig was a gov backstop or a fail-safe for FNMA cds?
    hahaha 2big to fail

    If swaps completely fall apart – government is in big trouble – this a multi-trillion dollar market. Think this is why government is regarding mortgage fraud victims as casualties of the larger picture.

  80. usedkargy:

    Looked up your trust series – and the “A-B” is not shown, but for Wells Fargo Asset Securities Corporation 2005-2 , the security underwriters are RBS Greenwich and UBS Investment. Unless this is the wrong trust, I do not see Citigroup Global. However, most of the mortgage-backed securities derived from trusts are sitting on the security underwriters on/off balance sheet along with the mortgages – these are the famous “toxic assets”. The security underwriters have been unable to market any securities derived from the trusts since “investors” in securities – not mortgages- have dumped the securities. This is the big problem that government has tried so hard to resolve and restore investor interest in the derived securities. Whomever is the security underwriter(s) is the legal owner of the mortgage/loan. Check the series out on the SEC website to make sure Trust series is accurate. You also bring up a good point. Many of these loans were originated in violation of RESPA – that is they were “table funded” by the originating lending but the actual lender was not disclosed at closing. There were pre-arranged agreements between security underwriters and originating lenders for sale of mortgage originations at or before closing to the security underwriters.

    I am not sure what you mean by “the actual default triggers the event of assignment/endorsement, and the note travels in reverse” I believe you may be referring to the subordination of defaults to lower tranche of the trust – the equity or residual tranche, which is likely held by the servicer and one of few tranches that is not sold to the security underwriters. This suggests a reverse path, to the servicer, for removal of the loan from the trust. At this point, the servicer will act on behalf ot the swap holder that provided “credit enhancement” to that tranche – and is no longer acting on behalf of the trust – and the trustee – who only acts on behalf of the “certificate holders”/security underwriters – is no longer involved.

    Check the trust again on SEC website – and anyone else have insight as to the “the reverse of of the intended route”. Important point here is that if mortgage has been removed from Trust – the security underwriter (mortgage owner) is no longer the creditor/owner – the mortgage has been sold to default swap holder. BUT the trustee to trust also no longer has involvement – as the mortgage has been removed from trust.

    Biggest concealment is derivative credit default swaps – and they are unrecorded and unregulated by 2001 deregulation. However, whoever is the security underwriter can tell you where the mortgage went and that the mortgage has been removed – if they were able to remove it as many swaps contracts fell apart. This is because the defaults came so quickly that swaps holders were not able to purchase the default loans under their contractual obligation – AIG is one big example. AIG wrote many default swaps – but that does not mean they were the “swap” holder entitled to collection rights – they marketed the swaps. Some other party is waiting to benefit and collect on your home. And you have a right to know who that party is. All of this is assuming the security underwriter was able to remove the loan by performance of the contractual default swap holder.

    If swaps completely fall apart – government is in big trouble – this a multi-trillion dollar market. Think this is why government is regarding mortgage fraud victims as casualties of the larger picture.

  81. ANONYMOUS

    imho… this is huge!!!!

    many of these so called subprime originators or subprime lenders are now dead & [is bankrupt considered dead?]

    if in fact
    what you are stating is true..[which btw i’m not attacking your integrity] but asking of authority of these facts ]

    2) This is where “Power of Attorney” (POA) is usually executed. Validity of POA depends on state in which an entity was incorporated. Many of these subprime lenders were incorporated in Delaware. Under Delaware law, POA does not survive the “death” of a entity. Many of the assignments are executed by the subprime originator to trustee for the trust. However, these assignments are executed, very often, after the death of the subprime entity and are, therefore, invalid. Even if executed before the death of the subprime entity, the POA is no longer effective – it dies with the death of the subprime entity. Also, most trusts state that only the trustee can effectuate POA to the servicer. If the POA is executed by the subprime lender – it is not valid.

    as in my case of Fremont investment and loan is now bankrupt.
    so if POA can not survive bk so dies the right to bring foreclosure?[if from delaware ?]

    tia for your time..

    i’d be willing to discuss with you my organizing a group to support this unmitigated injustice .. a body for a head ..so to speak!

  82. servicing records acquired through discovery show that servicer stopped collection efforts while the demand letter was in effect ( 90 days). Sevicing transcripts stopped noting payments made after the Dec 06 default, although 15 of 18 payments were made through July 08. Foreclosure filed 02/09. Not sure what other actions I should have taken. QWR yielded a denial of all predatory or high-cost loan/fraud issues.

  83. Anonymous, Question: if the Trustee (HSBC) is foreclosing on behalf of Wells Fargo Asset-Sec.Corp Home Equity A-B Cert. 05-2, then they are the wrong party foreclosing? These Certificates “remain on dealer shelves”. Does that mean that Citigroup Global Markets is the holder/entity entitled to foreclose? I am also understanding that the actual default triggers the event of assignment/endorsement, and the note travels in reverse of the intended route (no local recording other than in the name of “Wells Fargo Home Mortgage”, Lis Pendens filed by Trustee HSBC 2 years after original default). Since these certificates “remain on dealer shelves” (all four vintages of this series remain “unsold”), that means they are INDEED unsold and in the hands of the underwriter? This trust (WFHEABC05-2) traced back to a Wells Fargo/Norwest Trust from 1999 (SEC statements, owner relationship). I’m fighting the foreclosure with the fraudulent origination documents and making the accounting fraud arguments as an ancilliary argument for why they shoudl not be allowed to foreclose.

  84. Alina:

    The fact that you did not get an answer to the QWR is a red flag.

    Press in my state emphasized a “short sale”, in which a homeowner owed about $650,000 – but the home is only worth $400,000 so the homeowner sold to the bank for $400,000 and new “lucky” homeowner buys from bank for $400,000 with a great interest rate – Wow, according to the press – “Markets WORK”. Emailed the press and asked them why didn’t the bank just adjust the original homeowner’s principal to $400,000?? Told them it is just a transfer of wealth from an American victim to another American. They agreed – but too late – article was already printed.

    This has been my major concern. We just do not have representation in Washington – or a law firm that is able to consolidate claims for class actions – claims involve too many parties and too many different issues. May 2009 TILA amendment was supposed to enforce disclosure of the actual creditor, but the Mortgage Bankers Association and other financial institutions are requesting an opinion from the Federal Reserve regarding the amendment – including whether it is retroactive. Cannot imagine that some people have a right to know their creditor and others do not (if amendment is not retroactive). The federal reserve has not yet responded.

    Case is Massachusetts involves foreclosed home purchasers who do not have valid and legal title to the foreclosed home because the foreclosures were invalid. Very interesting. Waiting for opinion.

    Know of no SEC document or prospectus that states that borrowers are forbidden from knowing investors identity. Not that such statement may exist, but the fact that the prospectus itself tells us that the mortgages are sold to the security underwriters negates any divulging of subsequent disclosure of investors in the security underwriters “repackaged” securities. Again, the certificate holders to the trust are the security underwriters. And, again, do not confuse “investor” with mortgage owner – ie. the certificate holder (security underwriter). Investors in derivative securities such as CDOs – do not need to be divulged to public (and are not divulged due to 2001 deregulation of derivative securities). Fact remains only the security underwriter owns the mortgage.

    New article out today showing Wall Street is at it again – “Wall Street Repackages Toxic Debt”. You have to own the mortgages to repackage them – and if no one buys your repackaged “pass through” investments – that is Wall Street’s problem – the related securities remain on Wall Street’s off/on balance sheet – along with the mortgage ownership.

    I wish I could be more encouraging regarding disclosure of who really owns your mortgage given that you know it was not securitized. But the sale of your mortgage was a “Repurchase” by the originating lender – and these lenders are NOT divulging who they sold to – and getting away with this in many courts. The Courts need strong guidance from Washington.

    I am very disappointed in President Obama. I am a Centrist, but I believed that the President would help the people – no go. Everyone here needs to contact Washington, the President, and their representatives to say they have had enough of the fraud.

    I have fought hard and long for years but I cannot do it alone. Someone has to organize a coalition to speak in Washington. I am ready to speak if someone will organize – otherwise we will remain victims.

  85. Has anyone heard of a bankruptcy “carve out”? Apparently the trust in which has my “loan” has a bankruptcy “carve out” provision.

    I have a very basic concept of what this means. Mainly, that instead of losses resulting from modifications being absorbed from the ground up, they are absorbed on a pro rata basis.

    So it’s less incentive for investors in these trusts to agree to any modifications.

  86. Anonymous,

    Thank you for your extremely insightful and informative posts.

    You state, “many of the loans were never securitized but only targeted for Trust inclusion by agreements between the security underwriters (Wall Street) and the subprime originators. “Scratch and Dent” mortgage debt buyers like to hide behind the Trust inclusion – but the mortgage may have been bumped from the Trust at the onset.”

    I have been told that my loan does not appear in the trust allegedly holding the loan. Is this the reason? Is there a way to locate a loan that has “disappeared”?

    I have gotten no response whatsoever to any my QWR’s nor has the “trustee” foreclosing responded to my discovery.

    Any direction you can give me would be greatly appreciated.

  87. Anonymous..thanks

    very thorough!….as well as complicated!
    it would appear the only way to truly know “who has holder rights or has the right to lawfully bring foreclosure is through “discovery”?
    this info is never freely addressed in the paper trail..or is this hidden in the “notice”of assignments . …a big if…properly assigned & recorded?

    on an different {note} of thought .

    richard davet..posted ..some where [i cant find now of course] in the B of A …fnma …gse flawed model.
    i’m guessing it was from ..
    SEC-8k-sec.20 prospectus ..the borrower is strictly forbid from knowing the investors identity . doesn’t this fact render the loan doc defective by
    virtue of ” unknown 3rd-parties ” ?
    as neil has stated “real & indispensable 3rd parties”

    thanks again ANON.

  88. Anoynymous-Thank you so very much. Excellant explanation. Very clear.

    I did list Does 1-50 in my complaint so I could add
    JP Morgan Securities….now that I have just discovered its involvement.

    I don’t suppose that New Century Mortgage (original lender/servicer) after it declared BKR 11 in Delaware is considered a ‘death’??

    NCM did the assignment to security trustee & foreclosing entity 15 months after it had already sold (really sold) the 4200+ loans in the pool to Chase Acquisition and a month after it declared that BKR 11 (I think without any BKR 11 trustee approval to do so).

    It is such a veiled conduit…it has taken me over a year to learn that U.S. Bank, N.A. was the security trustee in my case.

    Anonymous—MUCH APPRECIATED!! Thank you.

  89. Abby:

    First, security underwriters were not just the “dealer”. The underwriters purchased the mortgages outright from the originators (seller), or purchased the certificates to the Trust once the conduit was set up (conduit was just a shell to move mortgage loan ownership to security underwriters – Wall Street) Once the trust was set up and the certificates were sold to the security underwriters, the certificates were repackaged into CDOs/CMOs that were then marketed to investors. The investors, therefore, only own pro-rata shares in the CDOs that were backed by the Trust certificates.

    Investors in CDOs – never hold the note. I think there has been too much emphasis on holding the note. See “In re Wells” June 19, 2009 – Ohio bankruptcy case. Holding the note is not enough – assignments for mortgage must be accurate. I have 2 points – 1) the trustee is always acting on behalf of someone – usually claim to act on behalf of the certificate-holders to the trust (which is the security underwriters). But in the case of foreclosures, the foreclosures are removed from the trust by the credit enhancement “swaps”. As discussed, the residual tranches are the only tranches in which the certificate ownership is not sold to the security underwriters. As the foreclosures/defaults reach a certain state, they are subordinated to the lower tranche and removed from the trust by the servicer who then acts on behalf of the swap holder – not on behalf of the trust. However, the servicer, or trustee, in court, WILL falsely claim to still be acting on behalf of the trust. if no one questions as to whether the mortgage loan has been removed from the trust – neither will the court – the court knows nothing unless this information has been provided. At this point, the foreclosure is a debt – and the name of the creditor must be identified according to the FDCPA and the new amendment to the TILA. Who is actually holding the original note (which very often cannot be found) is irrelevant. Proper assignment must be executed to the party who claims the right to enforce collection. “Hold” means physical possession but does not mean ownership or the right to collect. The actual creditor/owner must be identified.

    2) This is where “Power of Attorney” (POA) is usually executed. Validity of POA depends on state in which an entity was incorporated. Many of these subprime lenders were incorporated in Delaware. Under Delaware law, POA does not survive the “death” of a entity. Many of the assignments are executed by the subprime originator to trustee for the trust. However, these assignments are executed, very often, after the death of the subprime entity and are, therefore, invalid. Even if executed before the death of the subprime entity, the POA is no longer effective – it dies with the death of the subprime entity. Also, most trusts state that only the trustee can effectuate POA to the servicer. If the POA is executed by the subprime lender – it is not valid.

    As a final point, back to Greenwich/Countrywide. The judge did not rule on the merits, but he did state that Greenwich must prove that the Pooling and Servicing Agreement (PSA) states that modified loans must be “purchased” by the servicer. Analysis of this case sometimes uses the word “repurchase” – this is inaccurate. There is a clear distinction between “repurchase” and “purchase” since repurchase will imply that the mortgage loan itself was sold to investors such as Greenwich. I have found no PSA that uses the word “repurchase”, only “purchase” is used. Most PSAs state that servicers cannot modify current loans but can modify default/delinquent loans and that the servicer may purchase these modifications from the trust. This purchase is consistent with the procedure to subordinate default loans to to the bottom tranche and remove by default swaps (as discussed). Point is “repurchase” signifies that the loans were sold to the “investors” (do not confuse investors with the security underwriters – who own the mortgages/loans). Only “purchase” is used in PSAs, which does not indicate that investors are selling loans back to the security underwriters. Again, the investors only own pro-rate shares to a “pool” of securities that are backed by the certificates to the trust – which are owned by the security underwriters. Securities are not the individual and actual mortgages and mortgage loans. Ohio made this quite clear in Boyko. Once loans are assigned to trust they cannot be repurchased. A repurchase refers to loans that did not qualify for inclusion in the trust due to non-compliance such as missing documents, predatory lending, and early payment defaults (also called “scratch and dent). Before the loan is placed in the trust, the security underwriters can enforce the Repurchase Agreement to to “put back” the loan to the subprime originator (seller of loans). This is another whole issue has many of the loans were never securitized but only targeted for Trust inclusion by agreements between the security underwriters (Wall Street) and the subprime originators. “Scratch and Dent” mortgage debt buyers like to hide behind the Trust inclusion – but the mortgage may have been bumped from the Trust at the onset.

    Believe what Greenwich is complaining about is the modification of mortgages that are not yet in default but must be modified due to the Countrywide settlement. BOA is responsible for financial loss but wants the investors to take the hit for reduced interest rates tied to investment securities repackaged by the original trust. Greenwich, in effect is saying no – PSA does not allow modifications for mortgages not in default. Therefore, Greenwich wants the servicer to purchase the mortgages from the original trust at a price equal to full mortgage loan price, thereby negating financial loss to investor’s loss of interest rate on RELATED securities to the trust. By the way, Banc of America Securities was often securities underwriter to Countrywide trusts – therefore both the owner of the mortgage loans, and now as owner of Countrywide, the servicer of the loans.

    I know this is very complicated, and I believe that Wall Street and affiliates intended for it be this way. I remember the Enron scandal – which was based on the same premise of concealed conduits for transfer of assets. One attorney said that Enron counted on the Court’s and public’s lack of knowledge of financial engineering. Further, attorneys will use every opportunity to exploit legal loopholes in court. They also rely on breaking down the borrower due to court costs that will continue to escalate.

    Unfortunately, naming JP Morgan Chase, instead of JP Morgan Securities, could be a “loophole” for the attorneys. I have seen this, although I agree with you that JP Morgan Chase should be responsible for it’s subsidiary especially since JP Morgan Securities does not maintain it’s own balance sheet.

    I am not an attorney, and no information here should be construed as legal advise. However, I do have a background in finance and economics and have been researching all of this for years – long before the crisis culminated.

  90. To Angry&NTI

    I hear you. However, this all relates to ‘who’ or ‘which entity’ actually ‘holds the note’ in the securitization chain.

    This is very important.

    Anonymous is indicating that the securities underwriter (wall street) (or as I like to say ‘the dealer’)
    may be the holder of the note or ‘own the note’ and NOT the investor(s).

    WE do NOT want to go into court and say something like ‘the investor(s) really own my note’- or hold my ‘note’……

    AND it has very big implications as to ‘who’ or which ‘entity’ can actually bring the foreclosure action against us!!

    Correct me if I got that wrong Anonymous.

  91. whoa……
    this is moving so fast for my tiny little mind.
    we are covering a lot territory in exchange .
    we need a comment by a legal mind that might indicate which [if any]
    claim , plea, or legal action has
    1- greatest backstop of current law to allow homeowners pursuit for success .
    2- which if any is the shortest route , years in court may prove fatal to many cash poor homeowners ie.. legality of some of this is a complete maze.
    my objective saying this is trying to keep a central focus here – too many different issues dilutes our progress and we still have many miles ahead to reach a conclusive stance .
    this is an impressive example of collective minds working together for a common goal.
    thank you all .

  92. I meant ARS ‘auction rate securities’ not ABS for the Chase class action lawsuit of July 2009.

    Too many acronymns!

  93. http://securities.stanford.edu/1043/JPM09_02/

    If you want to review the class action lawsuit against JP Morgan Chase and its securities subsidiary filed July 2009, use the above link.

    The suit involves investors who claim Chase allegedly did ‘rigging’ etc. related to ABS.

  94. Anonymous–thanks

    Is it enough I named parent company JP Morgan Chase? I did not name yet J.P. Morgan Securities Inc. as defendant.

    I think in my case, I found in the 8K the following:

    Underwriter”: J.P. Morgan Securities Inc.

    “Underwriter’s Exemption”: Prohibited Transaction Exemption 2002-19, or any substantially similar administrative exemption granted by the U.S. Department of Labor

    AND THIS FROM A RECENTLY FILED COMPLAINT POSTED ON STANFORD’s Securities Class Action Lawsuit Website. CASE 09 CIV 6199 So. Dist. NY

    Defendant J.P. Morgan Securities Inc. (“JP Morgan”) is incorporated in Delaware
    and its principal executive offices are located in New York, New York. J.P. Morgan Securities
    Inc., a wholly-owned subsidiary of JPMorgan Chase, is registered with the SEC as a brokerdealer
    pursuant to Section 15(b) of the Exchange Act and is a member of the Financial Industry
    Regulatory Authority (“FINRA”). According to JPMorgan Chase’s 2008 Annual Report,
    “JPMorgan Chase’s principal nonbank subsidiary is J.P. Morgan Securities Inc., the Firm’s U.S.
    investment banking firm.

  95. abby:

    Website provides is good – but I do not see the prospectus there (424B5). Also try http://www.sec.gov and “search for name of company” under the trust name. The 424B5 is located at the bottom once you open specific trust. The security underwriters should be named close to the top of the document. “conveyance of mortgage loans”, however, is also located under the 8-K in website provided to you. This is the section that shows the certificates to the trust are sold to the security underwriters.

    I would like Neil to address this because he is so knowledgeable. Question is, unless the security underwriters sold the entire “Pooled” trust to distressed debt buyers – the mortgages belong to the security underwriters (certificate holders) because the investors only invest in “pro-rata” share to cash payments derived from CDOs/CMOs, which are derived from the trusts. Investments are only securities related and not individual mortgages. Do not know why no one has been naming security underwriters in foreclosure actions. Also, any foreclosures are subordinated to lower tranches and removed from the trust via default swaps, (which are not securities but rather contracts). Foreclosures are charge-offs. Servicers and trustees try to claim they have they represent “certificate holders”, but if the mortgages have been charged-off and removed from trust by the derivative swaps, collection rights have passed to the default swap holder (distressed debt buyer). Derivatives are a sale of the collection right without transfer of the actual security – the point is the trust, and trustee and servicer, no longer have the right to represent the trust (and its’ certificate holders – the security underwriters) once the mortgages have been removed, via the swaps, and the stated security underwriters know where the mortgage is if it was removed by swap. After crisis many of the security underwriters (Wall street) were unable to unload the “bad loans” even through the swaps. Thus, the loans, and related securities remain on the security underwriter books as “toxic assets”.

    Again, Greenwich/Countrywide/BOA are about BOA shifting the financial loss to the investors without BOA taking the loss on its’ book itself. It is not about “ownership” of the mortgage. It is about who is responsible for bearing the loss. BOA should have counterclaimed with TILA amendment – which states the servicer cannot be held liable for modifications. This would have kept the case in federal jurisdiction and then the issues regarding liability for financial loss would have been decided. Ownership of mortgages is not the issue.

  96. Drew–thank you very much!!

  97. Hey Abby in CA
    you can search your Trust at this site. it is free and you will be able to look at the FWP and find you loan etc. Great site enjoy

    http://www.secinfo.com

  98. Dear Anonymous–can you please post a link to the SPV at the SEC?

    My trust is JPMAC 2006-NC1

    Also, when you say ‘wall street’ can only be the assignee under TILA, what do you mean exactly….we have to name the security underwriters as a defendant in our cases?

    How do we found out the identity of the wall street security underwriter?

    Would this information be in the PSA?

  99. Neil:

    You are usually very good – but I agree with your reader – you missed this one. Case is simply a jurisdictional one and defendants did not plead a counterclaim – thus no grounds for federal jurisdiction. NO merits were decided.

    Investors remain are only entitled to pass-through of cash- payments paid-they are not the mortgage holder – and can never be defined as a “creditor/lender” under the TILA. Investors in this case do not want to lose their interest rate “investment” and want the actual mortgagee/lender (can only be Countrywide – now Bank of America – according to TILA) to pay the price for any investment loss. That is their stand. Investors cannot “write-off” mortgages – they can only write off investment losses. Investors do not own individual mortgages. They only own a rate to a pro-rata share in a “pool” of mortgage for pass-through of receivable cash payments. The entity that has the actual mortgage loan on their off/on balance sheet is the only entity that owns the mortgage/loan and is the only entity that can be called a “creditor” under the TILA.

    Finally, has anyone read the SEC documents for securitized trusts? All certificates to the Trust (with exception of certain residual tranches) are sold to the stated security underwriters. The security underwriters are the “certificate holders” to the trust – search “Conveyance of Mortgage Loans” and “Method of Distribution” under the 8-K and 424B4. The security underwriters then repackage the certificates into CDO/CMOs for sale of pass-through of the receivables only to investors. The CMOs/CDOs are derivative securities derived from the “pool” of loans that were sold to the security underwriters to a specific trust.

    The individual mortgage loans remains on the balance sheet (could be off-balance sheet) of the stated security underwriters. These are the “Toxic Assets” referred to by the government. Investors do not own the mortgage – or the mortgage loan – they only are entitled to pass through of cash payments related to a “pool” that is related to a “trust” that is related to “certificates” that are owned by the stated security underwriters (Wall Street).

    The Greenwich/Countrywide case was poorly pled by Bank of America as BOA claimed no counterclaim which could have granted federal jurisdiction. Again, there was no ruling on the merits.

    However, the case implies that the investors, who are never defined as the creditor/lender, are challenging that BOA in that they have no obligation to absorb the financial losses due to the Countrywide settlement for loan modifications, and rather, the creditor, Countrywide – now Bank of America, as the creditor, must absorb the losses. The investors are indirect beneficiaries to certificates that are owned by the security underwriters – the only assignee to the Countrywide mortgage original loan.

    Again, has anyone read the SEC documents for the SPV (conduit) trusts? These trusts were set up to pass the mortgage loan ownership to Wall Street. Only Wall Street can be the assignee under the TILA.

    Problem with courts is that cases are not being properly pled. The courts find numerous loopholes in legal standards to avoid full litigation. Other problem is that there is not enough representation by the people in Washington. These are complex issues and even Bank of America attorneys do not know what they are doing.

  100. 90% of all residential mortgages today are sold to the Government Sponsored Enterprises (Fannie, Freddie, etc). The reasoning behind this is the fact that the government backs (guarantees) the mortgage back securities sold by the gses. The GSEs, in years past could raise funds on a par with the US Treasury which no competitor could match. As a business person, I never heard of anyone having a 90% plas market share to begin with (the first red flag).
    According to the “GSE Business Model” all “players” ( lenders, servicer, securitizers, insurance, etc. etc), must abide by Fannie Mae “Guidelines” which protect and addresses the safety and soundness of the mbs securities. Every player in the chain of this Model incorporates the “boilerplate” GSE Guides as a minimum standard. It is that very same language inherent in the agreements between “players” that is now resulting in lawsuits across the board.
    The “investors” are not innocent in this transaction as any simple due diligence by any of of the “players” would have resulted in a determination that all along the line of the Model, there was a failure to abide by the “Guidelines” set as the minimum standard.
    The following is an exchange I had with Bank of America chairman Ken Lewis the annual shareholder’s meeting in 2005:

    Bank of America Corporation 2005 Shareholders Meeting – Final
    FD (Fair Disclosure) Wire
    May 11, 2005
    KEN LEWIS, CHAIRMAN AND CEO, BANK OF AMERICA CORPORATION: Thank you, good morning. It’s my privilege to call the 2005 Bank of America Corporation Annual Shareholders’ Meeting to order. I’m Ken Lewis, Chairman of the Board of your Company. Joining me on the stage is Bill Mostyn, our Corporate Secretary……( to the Davet exchange)
    RICHARD DAVIT, STOCKHOLDER: Yes, Mr. Chairman, Richard Davit (ph), shareholder and stakeholder. As you’re aware, investors worldwide cannot help but pickup the frightening news on a daily basis about the gross irregularities at Fannie Mae. As recently as April 6, 2005, Mr. Armando Falcon, Director of the Office of Federal Housing Oversight or OFHO, testified before Congress before a House Financial Service subcommittee citing numerous violations by Fannie Mae of the generally accepted accounting practices or GAAP.
    These GAAP violations undermine the confidence in the safety and soundness of Fannie Mae activity. As you know, Bank of America is a loan servicer for Fannie Mae and Fannie Mae, therefore, could require Bank of America to repurchase its portion of the $1.5 trillion in notes that their portion serviced by Bank of America. If Bank of America fails to follow the very strict guidelines proffered by Fannie Mae as part of its charter bestowing Fannie Mae with the full faith and credit of the U.S. Treasury. Consequently, Bank of America stockholders face a huge liability if Bank of America is found not to be in full compliance with Fannie Mae guidelines.
    Recent reports indicate many problems with the loan servicing industry with predatory lending legislation sweeping the country. Consumers are demanding that mortgage servicers be stripped of any exemptions previously enjoyed by banks making them subject to all debt collection statutes, which they claim is the essence of the business.
    Predating Enron, I’ve been in contact with the management of Bank of America, as well as Mr. Guinn, the Chair of the Audit Committee and its members calling to their attention the numerous violations by Bank of America to Fannie Mae Guidelines. For years, when possible, I’ve attended these annual meetings to attest to these violations. To date, Mr. Guinn and the other members of the Audit Committee have been derelict in their duty to respond pursuant to their fiduciary responsibility to all shareholders and stakeholders.
    I have basically three interrelated questions. One, so that Bank of America stockholders around the world can gauge their potential liability, how can Bank of America assure its stockholders that Bank of America is in full compliance with all of the Fannie Mae guidelines with respect to the millions in loans Bank of America services for Fannie Mae? What specific policies and procedures followed on a daily basis are in place to ensure full compliance? And what methods are in place to audit for that compliance? And how can shareholders acquire a report of that audit of compliance?
    Two, in light of Sarbanes-Oxley, can Bank of America Audit Committee, management and legal counsel and members of the accounting firm be personally and criminally liable for the failure to comply with the Fannie Mae guidelines?
    And three, will it be necessary for me to again raise these issues at the next year’s stockholder meetings or should I go elsewhere to take action?
    KEN LEWIS: Elsewhere would be fine. I don’t recall the issues that you’ve had before being issues. It seemed to be more about your mortgage, I thought, than what you’re talking about now.
    RICHARD DAVIT: The mortgage activity gave me a window of opportunity to look into this situation. And if you have consulted with your Audit Committee, it’s clear that I’ve brought these issues to their attention.
    KEN LEWIS: And the Audit Committee has looked into every single issue and have looked at them in depth and have said that we feel that we are complying with all of the issues that would arise around Fannie Mae or Freddie Mac and we’re in compliance. And we have looked very – in great detail and we do have audits of our procedures. And we think that you’re incorrect with your assessments.
    RICHARD DAVIT: So, you say that you are in compliance with all the Fannie Mae guidelines?
    KEN LEWIS: Yes, to the best of my knowledge.
    RICHARD DAVIT: Your Audit Committee has evidence to the contrary, sir. Thank you.
    The moral of the story……………………………………….it is the “GSE Business Model” that is fatally flawed. In my case supposedly FNMA made Bank of America repurchase my mortgage as they wanted no part of me asking them why BAC miserably failed to abide by the Guidelines in servicing my mortgage. It starts with Barney Frank and Christopher Dodd putting their imprimatur (guarantee) on the securities, and ends with the “investor” who now wants their money back based on the “boilerplate” language inherent in their agreements. Everybody looked the other way as long as they were receiving a check……when the checks stopped………..the taxpayer must step up. This is a sham, both criminal and treasonous.

  101. Some additional thoughts…

    Remember, according to the Note, there is the “Lender” and the “Note Holder.” Most all of the obligations of the Note run to the “Note Holder.”

    Section 1 of the Note and Definition D of the typical Fannie/Freddie Mortgage defines the “Lender.” Then Definition E describes the Note as saying, “The Note states that the Borrower owes Lender…” It goes on to state, “The Lender or anyone who takes this Note by transfer and is entitled to receive payments under this Note is the “Note Holder.”

    We might assume that if one took the Note by transfer, one should automatically be “entitled to receive payments under the Note.” But the “Lender” might already be relying on the language of a PSA and agreements between multiple parties still undisclosed to the Borrower. So there may be many parties “entitled to receive payments under the Note.” Remember, it’s 1) take by transfer and 2) entitlement to payment under the Note. As I recall, this is pretty much the definition of “holder in due course.” But with what’s going on, I don’t think there is a real “holder in due course” of the Note. Or the “Lender” is pretending that, as a servicer that 1) holds the Note (for some other entity, as Custodian?) and 2) is entitled to payment under the Note (under a PSA) that the “Lender/Servicer” conveniently meets their own definition of “holder in due course.” But such a convenient definition absolutely runs counter to other provisions in PSA’s and MLPA’s (that refer to “true sales” of the Notes/loans).

    Section 20 of the typical Fannie/Freddie Mortgage specifically removes the Borrower’s ability to know the identity of the persons/entity that may purchase the Note or partial interest in the Note (together with the Security Instrument). How can the Borrower really fulfill the obligations running to the “Note Holder,” if the Borrower is deliberately in the dark as to that party’s identity/location?

  102. Is there any hope for the Homeowner?

  103. Thanks, angry & not taking it! Angry’s comment seems to answer my previous question, at least in part when Angry said:

    “in the SEC 10k filings
    its not really a “buy” back but a equal value ‘replacement”
    when a security instrument in the pool defaults ie ..
    the ” revenue stream is impaired” this triggers what was referred to as a buy back/replacement of the instrument with a equally valued asset.
    hence allowing the remic to retain its tax status.”

    If this is in fact the plan for the “buy back/repurchase,” doesn’t that leave the Note–the evidence of indebtedness–still not in Countrywide’s hands? Is it possible that a “buy back/repurchase” would repay the amount of the Note yet again and perhaps therefore finally cancel it? How many times can one Note generate its face value or even a large portion of its face value yet still have the maker on the hook for that amount plus interest before one can say “The Note has been paid?”

    So again, if Countrywide ponies up the money for my Note in a buy back scenario but still doesn’t get my Note in that transaction, how can they purport to either modify or foreclose my mortgage if they don’t own the evidence of indebtedness?

    Will a mere receipt from the MBS trust suffice as evidence of indebtedness? If so, couldn’t I (or we) contest any foreclosure attempts based on such a scenario as being invalid because Countrywide would have essentially paid off our debt for us (i.e., the “buy back/repurchase”) as the culmination of a series of deals to which, as Neil often points out, the borrower was not a party?

    I mean, how many times will a judge allow an asset given by a borrower to a “lender”–i.e., the Note–to be paid and repaid by various corporate interests while still expecting the borrower to cough up the amount of the Note plus interest? For Pete’s sake, the mortgage “loan” isn’t even a loan, it’s an exchange of a valuable asset–a “borrower’s” signature on a Note–for a check to a seller.

    Since the amount of the Note and the amount of the lender’s check to the seller are equal, the lender’s books are balanced and the lender has essentially given nothing and certainly risked nothing. Sure, the borrower gets the house, but the house didn’t come from the lender, it came from the seller. So quite literally, a lender doesn’t “lend” anything.

    Well, I guess it “lends” itself the power to generate nothing but pure profit , having the ability to make more or less three times (at least) the amount on the Note: once when the Note is sold to investors, once more when the borrower repays the principal amount, and once more when the borrower pays the interest. Meanwhile, this situation creates nothing but debt for the so-called borrower.

    Sorry for the rant. This stuff just infuriates me.

  104. i’m not sure of this but from what i read in the SEC 10k filings
    its not really a “buy” back but a equal value ‘replacement”
    when a security instrument in the pool defaults ie ..
    the ” revenue stream is impaired” this triggers what was referred to as a buy back/replacement of the instrument with a equally valued asset.
    hence allowing the remic to retain its tax status.
    these banksters have hired all the hands needed to cover all of their holes!

  105. Except Countrywide would not have sought to remove the case to the federal level unless it was to be to their great advantage.

    The NYS Attorney General (along with other states’ Attorneys General) was instrumental in finding Countrywide responsible for predatory lending violations. Then the federal government stepped in and brokered an apparently “Countrywide-friendly” deal – which Congress didn’t quite go along with, since they didn’t give Countrywide carte blanche to modify loans with immunity (as mere servicers). The Judge in this case elaborates well on why it was not a “federal case.”

    What I do not understand is 1) how can the MBS investors have the loans “bought back” by Countrywide when that would seem to violate concept of “true sale,” REMIC and therefore jeapardize the tax-preferred treatment of ALL the alleged intermediate transactions and 2) what happened to the concept of “without recourse” “sale” of the loan notes?

    If the investors truly own the loans (via “without recourse” alleged “true sales”), how can there be a “buy-back” of the mortgages? If Countrywide’s “unauthorized” loan modifications went ahead, perhaps the investors in certificates could sue for breach of contract and damages? I guess for the investors it is more about the latter than federal lending law issues?

    When I read the PSA’s and Trust Agreements, I’m not so sure the investors “own” the loans. The Servicers CERTAINLY don’t own the loans. This all seems to be convoluted financings masquerading as true sales in order to avoid taxes.

    Some clarification here, please, anybody?

  106. Neil,

    I am sorry, I have to disagree with you with respect to this decision. IMHO, this was a federal jurisdiction question. Basically, the investors sued Countrywide. Countrywide then attempted removed the case to federal court based on two statutes – CAFA and TILA.

    Under CAFA, the removing defendant must show the case involves (1) monetary claims of 100 or more plaintiffs; (2) common questions of law or fact between the plaintiffs’ claims; (3) minimal diversity, where at least one plaintiff is diverse from one defendant; (4) aggregated claims in excess of $5 million; and (5) a showing that at least one plaintiff’s claim exceeds $75,000.

    In the Greenwich case, the court agreed that the removing defendants had met the 3 and 4. However, there is an exception and that has to do with securities. The court analyzes the question of securities based on the decision in Estate of Barbara Pew. Using that case, the court concluded that the removing defendant had failed to meet the federal jurisdiction question.

    As for TILA, the removing defendant raised TILA, not the plaintiffs. The court opined that if TILA is used as a defense, there is no federal jurisdiction.

    Based on the above, the court granted the plaintiffs motion to remand the case back to state court.

    I will concede that this is a victory for the investors.

  107. Thinking about this some more…

    Suppose Countrywide eventually loses the case and/or does decide to “repurchase” the loans. In order to modify or foreclose, would they have to “repurchase” the actual original note, or would modification/foreclosure authority be granted to them if they simply get a receipt for the amount of the repurchase?

    Any thoughts on that?

  108. Some more information regarding the stance of investors regarding mortgage-backed securities can be found here:

    http://www.absinvestoradvocate.com/

    Very interesting stuff.

    There is an article on the front page by one of the attorneys for the investors–here’s a quote:

    “As readers will recall, in October 2008, Countrywide announced that it was settling charges of predatory lending by agreeing to modify mortgage loans to reduce payments by $8.4bn. A few days later, Countrywide admitted that it owned only 12% of the mortgages to be modified, and the trusts that owned the rest would bear the brunt of the reduced payments.”

    From the same site, here’s another article regarding securitization and the new “servicer safe harbor” provisions passed in May:

    “As expected, the House approved the Senate version of servicer safe harbor this week, and President Obama signed it into law on Wednesday, May 20, as section 201 of the Helping Families Save Their Homes Act of 2009 (here). Fortunately for ABS investors, the Act gives servicers much less safe a harbor than the bills previously passed by the House and Senate.

    Just before the final vote in the House, the following section was inserted:

    Rule of Construction – No provision of [the Act] shall be construed as affecting the liability of any servicer or person … for actual fraud in the origination or servicing of a loan or in the implementation of a qualified loss mitigation plan, or for the violation of a State or Federal law, including laws regulating the origination of mortgage loans, commonly referred to as predatory lending laws.

    This language is important for both what it says and what it may imply. First, the obvious. The pooling and servicing agreements that govern ABS deals include many representations and warranties by the originators and the servicers of the loans in the collateral pools. For example, there are representations in the PSA in virtually every mortgage ABS deal that the loans in the collateral pools were not originated in violation of state predatory lending laws. This language in the servicer safe harbor protects investors’ rights to enforce these representations and warranties if they prove (as many them already have) to have been false.”

  109. Alina
    re your question on why clersk accept assignments…because, if like on my recorded assignment, the pretender lender signed it over to
    U.S. Bank, N.A (so it just appears to be a bank)…it was not until very, very recently that I finally understood that U.S. Bank, N.A. was the ‘securitization trustee’..only discovered because I got a copy of the Mortgage Loan Sale and Servicing Agreement and then that led me to the PSA (found on the SEC website). The PSA was made between two Chase entities….so that is where they set up the ‘securitization trust’ and named U.S. Bank, N.A. as securitization trustee.

    Much, much later (after foreclosure started)…the pretender lender (in my case HOME123 -part of New Century) then did the assignment over to U.S. Bank, N.A. There never was any recording of Chase having any significant role, other than becoming the new loan servicer.

    The Clerks don’t have a crystal ball. They only record what is given to them. I bet they do not even have a clue about all the securitization that went on.

    I went the last 8 months never being able to figure out how U.S. Bank, N.A. was involved in my foreclosure.

    Also, in the case of the MLSA that I have….there were over 4200 loans sold from New Century to Chase.
    When Chase did the PSA–they then sold the Certificates (ABS) to investors for 100K per pop!!

    That deal between New Century and Chase was close to 1Billion dollars!!

  110. oh yea
    those poor investors… let them chase the banksters for the modified difference of the revenue stream.

    btw this is why loan modifications is all bullshit..smoke&mirrors while the clock runs out to forclosure.

  111. whooo is this author??
    [neil i recognize your usual spot on commentary a [in yellow/shaded “quote”]

    but…
    a –
    what the hell does “cannot have a lawsuit” mean? like no you cannot have a cookie? haha
    i can see how [he/she] was attempting to phrase this.. eyes rolling

    b- the only statement of fact made was – ” Judge Richard Holwell ” ruling on lack of jurisdiction in fed court by way of the latest statutes .

    most of everything else was authors opinion . i luv media hype NOT!

    neil. can there be a partial ruling if lack of jurisdiction prevents FDJ Holwell from rendering a conclusive decision?

  112. alina,

    it is a very good argument and explanation. but some investors have an PSA agreement that in case the SVP is in default they ( investors) has no legal recourse to go after ( bond sellers) who sold them a junk bonds which in this case is a securities back by mortgages. in other word ,buyer (investors) beware. i have the feelings that those investors who has that provisions in PSA ( Pooling Servicing Agreement) without recourse has probably causes the increase of foreclosure in U.S.A. and the loan servicer could just sell the foreclosed properties which are not subject to investors lawsuit against the bond sellers such as banks, Wall ST. and lenders. so my theory, this is another “FRAUD” initiated by loan servicing and lenders and use others means to intimidate the homeowners to foreclosed. the profits they could get it goes to their wallet and who’s the loser we, the HOMEOWNERS AND THE REAL INVESTORS WHO BOUGHT THE TOILET PAPERS CERTIFICATE. there were so many faces in securities mortgages “FRAUD” this is just one of them, and who knows in the years to come , we could find more “Fraud”.

  113. Greed, greed greed. I watch as they strip out the cramdown provision in the modification bill in the ‎senate. Because this financial intermediaries doesn’t want to waterdown there portfolio they had ‎fought against it at the same time getting compensated under the program. Now even the safe ‎harbor provision doesn’t help them anymore to modify loans since the law negated investors right ‎to sue under the pooling agreements. I’m optimistic congress will re-introduce the cramdown bill ‎once more because this is the only effective way in my opinion to stop the tide of foreclosures. ‎

  114. erlinda,

    IMHO, I don’t think the investors have thought it out that far ahead maybe because the investors do not realize the extent of the fraud committed.

    Not only that, but it appears they can claim indemnification from the originator, seller, etc. The PSAs have built in protections for the investors against homeowner lawsuits.

    Don’t forget, the investors were lied to also by the seller, originator, pretender lender, etc..

    the way I look at it, this is the way the lies went:

    pretender lender lied to seller and homeowner
    seller lied to originator
    originator lied to investors
    servicers lied to homeowners in order to protect investors bottom line

  115. suppose the investors won in suing bank of america, the investors are also putting themselves into a position that they (investors) are subject to a lawsuit form the homeowners due to TILA and RESPA violations and other violation made by the table funded loans which sold to Wall St. Are they ( willing) to exposed themselves? i think it is cheaper just to accept and allow modification than facing a lawsuit.

  116. Here is a dumb questions:

    When I worked briefly in Wills, Trusts, and Estates years ago, I remember that in order for a transfer of anything to be valid it had to be to the “Estate of ____”, “Trust of ____”, etc. I mainly worked with family trusts and at the end of year, the gift transfers of shares would be made. The transfers had to read “Trust of _____). The transfers were not made to a third party as trustee of the “trust of ____”

    My question is this: On each and every single one of these foreclosures, the assignments are to the trustee or some other third part such as the servicer. Am I correct in presuming that such assignments would be invalid on their face? And if the answer to this question is yes, then why do the county clerk offices accept these assignments?

Leave a Reply

%d bloggers like this: