“Recommendation regarding verification of “ownership” of the mortgage” — Bostrom, General Counsel to FreddieMac

This is what Mr. Robert E. Bostrom, Executive Vice President, General Counsel & Corporate Secretary of Freddie Mac had to say to the Supreme Court Task Force on Foreclosures.
“Recommendation regarding verification of “ownership” of the mortgage”
“The Task Force has recommended a requirement for a plaintiff in a foreclosure action to verify that it owns and holds the noteTypically, the plaintiff in a foreclosure action does not own the underlying note or loan that is secured by the property subject to the foreclosure proceeding. Freddie Mac’s servicers initiate foreclosure actions in their names, even though they are not the owners of the notes or loans in question, because they are the mortgagees as shown on the land records (by fraudulent, fabricated assignments) and they are the holders (not in due course) or otherwise in possession of the (fabricated) notes. During foreclosure proceedings, our servicers and foreclosure counsel have authority to negotiate and execute loan restructurings (against what the pooling and servicing agreements state) and other foreclosure alternatives (trial modifications that are ultimately denied) with borrowers as well as attend (pointless) mediation.
Robert E. Bostrom
Freddie Mac
Executive Vice President
General Counsel & Corporate Secretary

11 Responses

  1. Continue…. The lender is Wells Fargo

  2. Hello, my story is this. I was paying on time for 15 years on my house. I called my servicing agent to inquire if I can make my house payment at the end of the month instead of the 1st, so technically within 30 days. The servicer said, that woiuld be fine and not reported as late as within 30 days. All what would happen is I would be accessed a late fee. They told me that I have never been late on my mortage and would not be a problem. That information is correct. I lived at this address for 15 years and never been late. The lender proceeded to inquire about what was going on and if they could help. I told them my husband is very ill and I just could not make the payment on the first and was concerned as I never have been late. They said,” Have you heard about our HAMP programs”? I was not famiilar with these, but they convinced me it would be the best thing and it is offered by the government which they could clearly see I qualifed and would be approved. So, they moved my payment up as they told me that it woiuld not start until the following month, so no pymt would be due and I could skip a whole month? It would also show modication on my credit report as this was my concern as well. Six months later, they said I was not approved and that I owed around b$18,000.00. Payment due within 30 days. Question: How can they put you on a loan, and say your approved, then several months later state you are not? How did they come up to a figure like that, when I was only paying maybe $200.00 less per month? Well, long story short. My husband is not better, my house is being sold at an auction on the steps of the courthouse in washington in June. Sad irony of this is,I made my payments on time and never would of gone on this program if they did not reccommend it. I was fine before. I wish I could turn back time to not have ever made that call that day. They continue to send me modifcation paperwork but not doing anything with it. Is there any attorneys out there that can make sense of this litigation nightmare? Who are these people and why does the goverment and white house step in to put controls in for, WE THE PEOPLE? Thank you

  3. Can someone send me a form Qualify Written request
    lanelois76grace@yahoo.com Help cook county il

  4. Gain on Sale accounting is no different for any durable good or mortgage asset. What you printed below goes without mention…why?

    Also,no receivable maybe “sold” shall be subject to a gain if there exists any repurchase language in the related contractual agreements.

    “The originator will be obligated to repurchase from the issuing entity any receivable sold by it to the issuing entity as to which a perfected security interest in the name of the originator in the vehicle securing the receivable did not exist as of the date such receivable was transferred to the issuing entity.”

    Another significant is foul when using the Enron SPV SPE or VIE whereby the indenture suggests if the repurchase must occur it shall by way of an affiliated compnay. GAAP say no can do. reated parties (1) Parent of Subsidiaries (2) owner company and its JV ventures or part.(3) An investor and its investees

    Therefore the ability to exercise significant influence must be present before the parties can be considered related. If two or more entities are subject to the significant influence of a parent, owner investor or common officers or directors then those entities are considered related to each other .

    Is it a sale or is it debt. The first gets you your home back. The second throw the balance sheet in receivership.

    M.Soliman
    expert.witness@live.com

  5. See the full original document here…

    http://wp.me/pFWnq-43

    4closureFraud

  6. More auto loan stuff. Check this out – they use “tangible chattel paper” or “electronic chattel papar” … Uhhh I don’t remember agreeing to that when I signed my car loan … I would call it “tangible intangibles” or “intangible tangibles” …

    Material Legal Issues Relating to the Receivables

    General

    The receivables are “tangible chattel paper” or, in the case of certain of the receivables if so specified in the prospectus supplement, are “electronic chattel paper”, in each case as defined in the UCC. Under the UCC, for most purposes, a sale of chattel paper is treated in a manner similar to a transaction creating a security interest in chattel paper. The originator and the depositor will cause financing statements to be filed with the appropriate governmental authorities to perfect the interest of the depositor and the issuing entity in the related receivables. The master servicer will hold the receivables transferred to each issuing entity, either directly or through subservicers, as custodian for the related indenture trustee or owner trustee, as applicable, and the issuing entity. The depositor will take all action that is required to perfect the rights of the indenture trustee or the owner trustee, as applicable, and the issuing entity in the receivables. However, the receivables will not be stamped, or otherwise marked, to indicate that they have been sold to the issuing entity. If, through inadvertence or otherwise, another party purchases or takes a security interest in the receivables for new value in the ordinary course of business and takes possession of the receivables without actual knowledge of the issuing entity’s interest, the purchaser or secured party will acquire an interest in the receivables superior to the interest of the issuing entity. The depositor and the master servicer will be obligated to take those actions which are necessary to protect and perfect the issuing entity’s interest in the receivables and their proceeds.

    Some of the receivables may be evidenced by electronic installment sales contracts and installment loans, which are classified as “electronic chattel paper” under the UCC. A security interest in electronic chattel paper is perfected through the secured party maintaining control of the electronic chattel paper. Each sale and servicing agreement relating to an issuing entity that owns installment sale contracts or installment loans maintained in electronic format will obligate the master servicer to maintain control of any electronic chattel paper evidencing the issuing entity’s receivables. The receivables of an issuing entity may not include electronic installment sale contracts or installment loans unless the master servicer has licensed the use of a specific software suite and constructed an electronic vaulting system to maintain such contracts and loans in electronic form that is designed to meet all UCC Article 9 and American National Standards Institute standards to permit the perfection of a security interest in receivables evidenced by electronic installment sale contracts and installment loans and to transfer the security interest in such receivables to the applicable issuing entity. In the event that an issuing entity owns electronic contracts or loans, another person could acquire an interest in that type of receivable that is superior to an issuing entity’s interest in such a receivable if the issuing entity loses control over the authoritative copy of the related electronic installment sale contract or installment loan and another party purchases that receivable without knowledge of the issuing entity’s security interest. The issuing entity could lose control over an electronic installment sale contract or installment loan if, through fraud, negligence, other misconduct or error, or as a result of a computer virus or a hacker’s actions, a person other than the issuing entity were able to modify or duplicate the authoritative copy of that contract or loan. We cannot assure you that the system will maintain control over an issuing entity’s electronic installment sale contracts or installment loans.

    The law governing the perfection of a security interest in electronic installment sale contracts by control was relatively recently enacted. As a result, there is a risk that the systems employed by the master servicer to maintain control of the electronic installment sale contracts and installment loans may not be sufficient as a matter of law to create in favor of an issuing entity a perfected security interest in the receivables evidenced by such contracts and loans.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  7. These risks are for auto loans that have been securitized, but much of this information pertains to home loan securitization:

    Risk Factors

    You should consider the following risk factors in deciding whether to purchase any of the securities. The risk factors stated here and in the prospectus supplement describe the principal risk factors of an investment in the securities.

    You may have difficulty selling your securities or obtaining your desired price…………………………
    There may be no secondary market for the securities. Underwriters may participate in making a secondary market in the securities, but are under no obligation to do so. We cannot assure you that a secondary market will develop. In addition, there have been times in the past where there have been very few buyers of asset backed securities and thus there has been a lack of liquidity. There may be a similar lack of liquidity in the future. As a result, you may not be able to sell your securities when you want to do so, or you may not be able to obtain the price that you wish to receive.

    The securities are not suitable investments for all investors……
    The securities are not a suitable investment for any investor that requires a regular or predictable schedule of payments or payment on specific dates. The securities are complex investments that should be considered only by sophisticated investors. We suggest that only investors who, either alone or with their financial, tax and legal advisors, have the expertise to analyze the prepayment, reinvestment and default risks, the tax consequences of an investment and the interaction of these factors should consider investing in the securities.

    The issuing entity assets are limited and only the assets of the issuing entity are available to pay your securities…………………….
    The securities represent interests solely in an issuing entity or indebtedness of an issuing entity and will not be insured or guaranteed by the originator, the depositor, the master servicer, any of their respective affiliates or, unless otherwise specified in the prospectus supplement, any other person or entity. The only source of payment on your securities will be payments received on the receivables and, if and to the extent available, any credit or cash flow enhancement for the issuing entity. Therefore, you must rely solely on the assets of the issuing entity for repayment of your securities. If these assets are insufficient, you may suffer losses on your securities.

    Performance of the receivables is uncertain ……………………..
    The performance of the receivables depends on a number of factors, including general economic conditions, unemployment levels, the circumstances of individual obligors, the underwriting standards of the originator at origination and the success of the master servicer’s servicing and collection strategies. Consequently, no accurate prediction can be made of how the receivables will perform based on FICO scores or other similar measures.

    Interests of other persons in the receivables could reduce the funds available to make payments on your securities…………………….
    Financing statements under the Uniform Commercial Code will be filed reflecting the sale of the receivables by the originator to the depositor and by the depositor to the issuing entity. The originator will mark its computer systems, and the originator and the depositor will each mark its accounting records, to reflect its sale of the receivables. However, because the master servicer will maintain possession of the physical installment sale contracts and installment loans evidencing the receivables and will not segregate or mark the contracts and loans as belonging to the issuing entity, another person could acquire an interest in receivables evidenced by a physical installment sale contract or installment loan that is superior to the issuing entity’s interest in those receivables by obtaining physical possession of the installment sale contracts or installment loans representing those receivables without knowledge of the assignment of the receivable to the issuing entity. If another person acquires an interest in a receivable that is superior to the issuing entity’s interest, some or all of the collections on that receivable may not be available to make payment on your securities.

    Additionally, if another person acquires an interest in a vehicle financed by a receivable that is superior to the issuing entity’s security interest in the vehicle, some or all of the proceeds from the sale of the vehicle may not be available to make payments on the securities.

    The issuing entity’s security interest in the financed vehicles could be impaired for one or more of the following reasons:

    o the originator or the depositor might fail to perfect its security interest in a financed vehicle;

    o another person may acquire an interest in a financed vehicle that is superior to the issuing entity’s security interest through fraud, forgery, negligence or error because the master servicer will not amend the certificate of title or ownership to identify the issuing entity as the new secured party;

    o the issuing entity may not have a security interest in the financed vehicles in certain states because the certificates of title to the financed vehicles will not be amended to reflect assignment of the security interest to the issuing entity;

    o holders of some types of liens, such as tax liens or mechanics’ liens, may have priority over the issuing entity’s security interest; and

    o the issuing entity may lose its security interest in vehicles confiscated by the government.

    The originator will be obligated to repurchase from the issuing entity any receivable sold by it to the issuing entity as to which a perfected security interest in the name of the originator in the vehicle securing the receivable did not exist as of the date such receivable was transferred to the issuing entity. However, the originator will not be required to repurchase a receivable if a perfected security interest in the name of the originator in the vehicle securing a receivable has not been perfected in the issuing entity or if the security interest in a related vehicle or the receivable becomes impaired after the receivable is sold to the issuing entity. If an issuing entity does not have a perfected security interest in a vehicle, its ability to realize on the vehicle following an event of a default under the related receivable may be adversely affected and some or all of the collections on that vehicle may not be available to make payment on your securities.

    Consumer protection laws may reduce payments on your securities……..
    Federal and state consumer protection laws impose requirements upon creditors in connection with extensions of credit and collections on retail installment sale contracts and installment loans. Some of these laws make an assignee of the contract or loan, such as an issuing entity, liable to the obligor for any violation by the lender. Any liabilities of the issuing entity under these laws could reduce the funds that the issuing entity would otherwise have to make payments on your securities.

    Amounts on deposit in any reserve fund will be limited and subject to depletion……………………..
    The amount required to be on deposit in any reserve fund will be limited. If the amounts in the reserve fund are depleted as amounts are paid out to cover shortfalls in distributions of principal and interest on the securities, the issuing entity will depend solely on collections on the receivables, including amounts recovered in connection with the repossession and sale of financed vehicles that secure defaulted receivables, and any other credit or cash flow enhancement to make payments on your securities. In addition, the minimum required balance in the reserve fund may decrease as the aggregate principal balance of the receivables decreases.

    A bankruptcy of the depositor could result in losses or payment delays with respect to your notes…………………………
    WDS Receivables LLC, as depositor, intends that its transfer of the receivables to the issuing entity will be a valid sale and assignment of the receivables to the issuing entity for non-tax purposes. If the depositor were to become a debtor in a bankruptcy case and a creditor or trustee-in-bankruptcy of the depositor or the depositor itself were to take the position that the sale of receivables by the depositor to the issuing entity for non-tax purposes should instead be treated as a pledge of the receivables to secure a borrowing by it, delays in payments of collections on or in respect of the receivables to the related securityholders could occur. If a court ruled in favor of any such trustee, debtor or creditor, reductions in the amounts of those payments could result. A tax or governmental lien on the property of the depositor arising before the transfer of the receivables to the issuing entity may have priority over the issuing entity’s interest in those receivables even if the transfer of the receivables to the issuing entity is characterized as a sale for non-tax purposes.

    Bankruptcy of Wachovia Dealer Services, as originator, could result in delays in payment or losses on your securities……….
    If Wachovia Dealer Services, as originator, were to become the subject of a bankruptcy proceeding, you could experience losses or delays in payment on your securities. Wachovia Dealer Services will sell the receivables to the depositor, and the depositor will sell the receivables to the trust. However, if Wachovia Dealer Services is the subject of a bankruptcy proceeding, the court in the bankruptcy proceeding could conclude that the sale of the receivables by Wachovia Dealer Services to the depositor was not a true sale for bankruptcy purposes and that Wachovia Dealer Services still owns the receivables. The court also could conclude that Wachovia Dealer Services and the depositor should be consolidated for bankruptcy purposes. If the court were to reach either of these conclusions, you could experience losses or delays in payments on your securities because:

    o the indenture trustee will not be able to exercise remedies against Wachovia Dealer Services on your behalf without permission from the court;

    o the court may require the indenture trustee to accept property in exchange for the receivables that is of less value than the receivables;

    o tax or other government liens on Wachovia Dealer Services property that arose before the transfer of the receivables to the issuing entity will be paid from the collections on the receivables before the collections are used to make payments on your securities; and

    o the indenture trustee may not have a perfected security interest in one or more of the vehicles securing the receivables or cash collections held by Wachovia Dealer Services at the time that a bankruptcy proceeding begins.

    Wachovia Dealer Services and the depositor have taken steps in structuring the transactions described in this prospectus to minimize the risk that a court would conclude that the sale of the receivables to the depositor was not a “true sale” or that Wachovia Dealer Services and the depositor should be consolidated for bankruptcy purposes.

    For more information regarding bankruptcy considerations, see “Material Legal Issues Relating to the Receivables–Certain Bankruptcy Considerations and Matters Relating to Bankruptcy”.

    Any credit support provided by financial instruments may be insufficient to protect you against losses………………………..
    Credit support for the securities may be provided through the use of financial instruments like interest rate or currency swaps, letters of credit, credit or liquidity facilities, surety bonds, insurance policies regarding payment of the securities, guaranteed investment contracts, yield supplement agreements or cash deposits. These types of credit support are limited by the credit of the provider of the related financial instrument and by its ability to make payments as and when required by the terms of the financial instrument. Any failure of the credit support provider to meet its obligations under the financial instrument could result in losses on the related securities. The terms of any financial instrument providing credit support for the securities may also impose limitations or conditions on when or in what circumstances it may be drawn on. Any form of credit support may apply only to certain classes of securities, may be limited in dollar amount, may be accessible only under some circumstances and may not provide protection against all risks of loss. The prospectus supplement will describe the provider of any financial instrument supporting the securities and any conditions, limitations or risks material to the securityholders.

    You may suffer losses upon a liquidation of the receivables if the proceeds of the liquidation are less than the amounts due on the outstanding securities………….
    Under certain circumstances described in this prospectus and in the prospectus supplement, the receivables of an issuing entity may be sold after the occurrence of an event of default under the related indenture. The related securityholders will suffer losses if the issuing entity sells the receivables for less than the total amount due on its securities. We cannot assure you that sufficient funds would be available to repay those securityholders in full.

    Subordination of certain securities may reduce payments to those securities…………….
    To the extent specified in the prospectus supplement, the rights of the holders of any class of securities to receive payments of interest and principal may be subordinated to one or more other classes of securities. Subordination may take one or more of the following forms:

    o interest payments on any distribution date on which interest is due may first be allocated to the more senior classes;

    o principal payments on the subordinated classes might not begin until principal of the more senior classes is repaid in full;

    o principal payments on the more senior classes may be made on a distribution date before interest payments on the subordinated classes are made; and

    o if the indenture trustee sells the receivables, the net proceeds of that sale may be allocated first to pay principal and interest on the more senior classes.

    The timing and priority of payment, seniority, allocations of losses and method of determining payments on the respective classes of securities of any issuing entity will be described in the prospectus supplement.

    Prepayments on the receivables may adversely affect the average life of and rate of return on your securities …………………….
    You may not be able to reinvest the principal repaid to you at a rate of return that is equal to or greater than the rate of return on your securities. Faster than expected prepayments on the receivables may cause the issuing entity to make payments on its securities earlier than expected. We cannot predict the effect of prepayments on the average lives of your securities.

    All receivables, by their terms, may be prepaid at any time. Prepayments include:

    o prepayments in whole or in part by the obligor;

    o liquidations due to default;

    o partial payments with proceeds from amounts received as a result of rebates of extended warranty protection plan costs, insurance premiums and physical damage, theft, credit life and disability insurance policies;

    o required purchases of receivables by the master servicer or repurchases of receivables by the originator for specified breaches of their respective representations, warranties or covenants; and
    o an optional repurchase of an issuing entity’s receivables by the master servicer or the originator when their aggregate principal balance is 10% (or such other percentage specified in the prospectus supplement) or less of the initial aggregate principal balance, or under such other circumstances as may be specified in the prospectus supplement.

    A variety of economic, social and other factors will influence the rate of optional prepayments on the receivables and defaults.

    As a result of prepayments, the final payment of each class of securities is expected to occur prior to the related final scheduled distribution date specified in the prospectus supplement. If sufficient funds are not available to pay any class of notes in full on its final scheduled distribution date, an event of default will occur and final payment of that class of notes may occur later than scheduled.

    For more information regarding the timing of repayments of the securities, see “Maturity and Prepayment Considerations”.

    You may suffer a loss on your securities because the master servicer may commingle collections on the receivables with its own funds. …………………….
    The master servicer, so long as it continues to satisfy certain requirements, directly or through Wachovia Dealer Services Financial Inc, as subservicer, will be permitted to hold with its own funds collections it receives from obligors on the receivables and the purchase price of receivables required to be repurchased from the issuing entity until the day prior to the date on which the related distributions are made on the securities. During this time, the master servicer may invest those amounts at its own risk and for its own benefit and need not segregate them from its own funds. If the master servicer is unable to pay these amounts to the issuing entity on or before the distribution date, you might incur a loss on your securities.

    For more information about the master servicer’s obligations regarding payments on the receivables, see “Description of the Receivables Transfer and Servicing Agreements–Collections”.

    The senior class of securities controls removal of the master servicer upon a default on its servicing obligations…………..
    Generally, unless otherwise specified in the prospectus supplement, the holders of a majority of an issuing entity’s most senior class of securities, or the applicable trustee acting on their behalf, can remove the related master servicer if the master servicer–

    o does not deliver to the applicable trustee the available funds for application to a required payment after a grace period after notice or discovery;

    o defaults on a servicing obligation which materially and adversely affects the issuing entity after a grace period after notice; or

    o initiates or becomes the subject of certain insolvency proceedings.

    Those holders may also waive a default by the master servicer. The holders of any subordinate class of securities (which includes, in the case of an issuing entity that issues both notes and certificates, the holders of the certificates) may not have any rights to participate in such determinations for so long as any of the more senior classes are outstanding, and the subordinate classes of securities may be adversely affected by determinations made by the more senior classes.

    See “Description of the Receivables Transfer and Servicing Agreements–Events of Servicing Termination”.

    Geographic concentration of an issuing entity’s receivables may adversely affect your securities…
    Adverse economic conditions or other factors particularly affecting any state or region where there is a high concentration of an issuing entity’s receivables could adversely affect the securities of that issuing entity. We are unable to forecast, with respect to any state or region, whether these conditions may occur, or to what extent these conditions may affect receivables or the repayment of your securities. The location of an issuing entity’s receivables by state, based upon obligors’ addresses at the time the receivables were originated, will be described in the prospectus supplement.

    Ratings of the securities are limited and may be reduced or withdrawn….
    At the initial issuance of the securities of an issuing entity, at least one nationally recognized statistical rating organization will rate the offered securities in one of the four highest rating categories or in the categories otherwise specified in the prospectus supplement. A rating is not a recommendation to purchase, hold or sell securities, and it does not comment as to market price or suitability for a particular investor. The ratings of the offered securities address the likelihood of the payment of principal and interest on the securities according to their terms. We cannot assure you that a rating will remain for any given period of time or that a rating agency will not lower or withdraw its rating if, in its judgment, circumstances in the future so warrant. A reduction or withdrawal of an offered security’s rating would adversely affect its value.

    You may experience a greater risk of loss on your securities as the result of armed conflict and terrorist activities…………………….
    The long-term economic impact of the United States’ military operations in Iraq and Afghanistan, as well as the possible response to these operations, other terrorist activities and tensions in other regions of the world remains uncertain but could have a material adverse effect on general economic conditions, consumer confidence, market liquidity and the performance of the receivables of an issuing entity. You should consider the possible effects of these events on the delinquency, default and prepayment experience of the receivables. Under the Servicemembers Civil Relief Act, members of the military on active duty, including reservists, who have entered into an obligation, such as a retail installment sale contract or installment loan for the purchase of a vehicle, before entering into military service may be entitled to reductions in interest rates to 6% and a stay of foreclosure and similar actions. In addition, pursuant to the laws of various states, under certain circumstances payments on retail installment sale contracts or installment loans such as the receivables of residents of such states who are called into active duty with the National Guard or the reserves will automatically be deferred. No information can be provided as to the number of receivables that may be affected. If an obligor’s obligation to repay a receivable is reduced, adjusted or extended, the master servicer will not be required to advance such amounts. Any resulting shortfalls in interest or principal will reduce the amount available for distribution on the securities.

    The securities will not be listed on an exchange and this may make it difficult for you to sell your securities or to obtain your desired price…………………………
    Unless otherwise specified in the prospectus supplement, the issuing entity will not apply to list the securities on an exchange or quote them in the automated quotation system of a registered securities association. The liquidity of the securities will therefore likely be less than what it would be in the event that they were so listed or quoted, and there may be no secondary market for the securities. As a result, you may not be able to sell your securities when you want to do so, or you may not be able to obtain the price that you wish to receive.

    Thanks,
    Dan Edstrom
    dmedstrom@hotmail.com

  8. Daniel Murray: We have the DVD’s completed and mastered/ They should be ready for production within a few days. But until I am satisfied that they are 100% ready, I won’t put them up for sale on the website currently under construction http://www.livinglies-store.com.

  9. How can one get a hold of the DVD’s mentioned in the YouTube videos?

  10. I have to say the guys got balls! YES WE ARE COMMITTING FRAUD AND IT’S THE RIGHT THING TO DO. Too big to fail?

  11. See the full original document here…

    http://wp.me/pFWnq-43

    4closureFraud

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