the originator remained your “lender” for all legal purposes including TILA/RESPA. But, these originators are “dead” – so who is the lender for TILA/RESPA?? – not the Trust and not the security investors, not the servicer, and certainly not the Trustee – all according to the Federal Reserve Interim Opinion on May 2009 TILA Amendment (now rule). The lender/creditor is the entity on whose balance sheet the loan rights lie.

Conveyance of Mortgage Loans is usually found under Article II in the PSA. – but conveyance is NOT “on behalf of the securitization Trust.” Conveyance is for the “benefit of the Certificateholders” to the Trust.

one cannot assign a loan to a REMIC if there is knowledge of default. Thus, if assignment occurs (to cure defect) after default – and after removal of receivable from Trust – this is simply – fraud.

submitted by a very good friend “Anonymous” responding to “the other side”

It was a former attorney from Thacher Proffitt, now Sonnenschein , and whose name appeared on many SEC documents – that informed that the “Trusts” are a “shell” – meaning “empty.” This is for many reasons – and, these Trusts are no longer performing as originally intended..

1) You have to look at how these mortgage loans – not the Trust itself – were funded. The loans were funded with warehouse lines of credit – set up specifically for originators to utilize at origination and with conditional prearranged agreements to sell the loan to the Banks. NO WHERE DOES THE transfer of loan to warehouse lender and subsequent sale of the loans to the Bank exist. The originators did not remove THEIR receivables from THEIR balance sheets for securitization – the BANKs removed THEIR receivables from their own balance sheets for securitization.

2) If the process described above is accurate and currently working, then the originator remained your “lender” for all legal purposes including TILA/RESPA. But, these originators are “dead” – so who is the lender for TILA/RESPA?? – not the Trust and not the security investors, not the servicer, and certainly not the Trustee – all according to the Federal Reserve Interim Opinion on May 2009 TILA Amendment (now rule). The lender/creditor is the entity on whose balance sheet the loan rights lie.

3) According to FASB 166 and 167, these off-balance sheet trusts – owned by the banks – are now back on the banks balance sheet.

4) Why did the banks own the off-balance sheet trusts? Because the Depositor was their subsidiary – as was the security underwriter – who purchased ALL the certificates to the Trust excluding the servicer owned residual tranche. The bank would then use their certificate owned tranches in derivative CDOs, and squared CDOs – on which many credit default swaps were written.

5) When you look at PSAs – you have to know – who is the seller/sponsor, who is the originator, and who is the Depositor. The above author states – “pooling and servicing agreement, which conveys the mortgage loans from the depositor to the trustee on behalf of the securitization trust” The author does not complete his statement. Conveyance of Mortgage Loans is usually found under Article II in the PSA. – but conveyance is NOT “on behalf of the securitization Trust.” Conveyance is for the “benefit of the Certificateholders” to the Trust. The security underwriters purchase all the certificates to the Trust – they OWN the Trust . The Depositor is a subsidiary of the Bank, as is the security underwriter a subsidiary of the Bank. By the “Conveyance” – the loans are converted from on balance sheet receivables (Depositor parent owned – to off-balance sheet securities (security underwriter owned). But, all of this is without the first step – sale of mortgage loans to the bank. Now, you may consider that the sale to Depositor – since it is a subsidiary of the parent bank, counts as the sale to the Banks – but the Depositor does not provide the warehouse funding to the originator – the bank does. Which brings us to the Mortgage Loan Purchase agreement.

6) The Mortgage Loan Purchase Agreement (MPLA) is the sale of the loans from the Sponsor/Seller to the Depositor. Sometimes, the Sponsor/Seller is the originator – sometimes it is not the originator. In the case of the latter – a sale of the loans from the originator to Sponsor/Seller is often missing in the chain. Under either case, the Depositor did not provide the funding to purchase the loan – only the parent corporation bank had this ability. Neither did subsequent security investors fund the loan (this has always been my disagreement with Neil) – because the MPLA occurs PRIOR to the sale of the loans to the Trust and prior to the sale of trust certificates to the security underwriters. The loan originations were funded by warehouse lines of credit funded by the bank to the originator. And then sold to the parent bank by the originator via the warehouse funder.

7) MERS is nothing more than a “nominee” for the actual bank that funded the origination and purchased the loans via warehouse lending – which was concealed at mortgage origination..

8) Therefore, none of the assignments, endorsements, etc. are accurate because the FIRST SALE To the bank is not part of the chain.

9) All of this is MOOT – for two reasons A) the default loans are removed from the Trust via swap contracts and/or sale of collection rights once the receivables are charged-off. The REMICs were set up for pass-through of current receivables only. The trustee will not account for foreclosure recoveries. The only tranche that may be applicable is the residual servicer owned tranche – which means the servicer is servicing default loan for itself – or for the entity that funds the servicer payment advances. But the servicer will only advance payments for a certain amount of time – after that the servicer is servicing default loan for the entity that has purchased collection rights via swaps or direct sale of collection rights.

B) The author describes a process that was utilized WHEN the securitizations were actually functioning as intended. This is no longer the case. The trusts have been dismantled, torn apart, and paid via swaps, and with any remnants either now back on the banks balance sheet (FASB) or with the US Government’s balance sheet..

10) As far as the REMIC 90-day rule, the author’s premise MIGHT be correct – IF the loans are still performing. But, one cannot assign a loan to a REMIC if there is knowledge of default. Thus, if assignment occurs (to cure defect) after default – and after removal of receivable from Trust – this is simply – fraud.

11) Finally, none of the above accounts for any loans that may have been been a forced “Repurchase” by the originator (Repurchase Agreement is part of MPLA) – or SHOULD have been repurchased – as is being argued by derivative security investors – such as the Federal Reserve – today.

In conclusion, what the author argues does not include the flaws in chain of sale of loans at the time of loan origination and trust setup and PURCHASE of loans by the banks. And, the author does not include how default loans are removed from the trusts, or subsequent default of the Trusts themselves. As a result, the mortgage loans are back on banks (or government) balance sheet – whether performing or not – OR with collection rights sold to unidentified swap provider and/or third party distressed debt buyers/hedge funds.

While the author would love to assume that all is still well (these guys signed their names on numerous SEC documents), all is not well. All has collapsed – and there lies the foreclosure fraud.

22 Responses

  1. Bob G.

    Your welcome – not that I agree it with. Especially the part in footnote that states – “Also, it appears from the hearing that One West, through its counsel, holds the Note.”

    Through its counsel??? Very disturbing.

  2. ANON – interesting GA case. Thanx for the cite.

  3. Bob G

    Okay – not that I do not agree with you – but, and this is the same for Dan Edstrom – often need to play devil’s advocate to help counter the devil.

    See below


    2010 U.S. Dist. LEXIS 45993

    April 20, 2010, Decided
    April 20, 2010, Filed

    Second, Plaintiff contends that the “splitting” of the mortgage and the note rendered the mortgage a nullity. In her brief, Plaintiff argues that the mortgage and the note are inseparable and must be transferred together. Essentially, Plaintiff [*12] is arguing that American Mortgage rendered Plaintiff’s mortgage unenforceable when it initially transferred the security deed, but not the mortgage to MERS. However, the nominee of the lender has the ability to foreclose on a debtor’s property even if such nominee does not have a beneficial interest in the note secured by the mortgage. Morgera v. Countrywide Home Loans, Inc, No. 2:09-cv-1476-MCE-GGH, 2010 U.S. Dist. LEXIS 2037, 2010 WL 160348, *8 (E.D. Cal. Jan 11, 2010) (citing Trent v. Mortgage Elec. Registration Sys., Inc., 288 Fed. Appx. 571 (11th Cir. 2008)). Here, assuming that the Security Deed and the Note were separated initially when American Mortgage transferred the Security Deed to MERS, Defendant now retains possession of both instruments. [Doc. 9-3 at 9-10]. 3, 4 Thus, to the extent there was any problem regarding the separation of the Security Deed from the Note, such defect has been cured by Defendant. 5

    – – – – – – – – – – – – – – Footnotes – – – – – – – – – – – – – – –
    3 In fact, it appears it appears that MERS was the holder of both the security deed and the note when it assigned both to IndyMac. [Doc. 9-3 at 11].4 Also, it appears from the hearing that One West, through its counsel, holds the Note. The Note is a bearer obligation. [See Doc. 9-3 at 5].5 The Court [*13] notes that the case law cited by Plaintiff to support her position that the splitting of the security deed and the note rendered the security deed a nullity are inapplicable to the present case. First, the Court notes that Plaintiff has merely listed a long list of string citations without any explanation as to why these cases are applicable to the present case. Second, although not obligated to do so, the Court’s review of these cases shows that Carpenter v. Longan, 83 U.S. 271, 21 L. Ed. 313 (1872), concerns a loan that had not yet matured and not a home mortgage in default as in the present case.

  4. ANON

    I’ll try and address tomorrow. Too much wine tonite.

    Your post need clarification from a legal standpoint. Yes, it is the 1872 SCt case. Stare Decisis is what is going to govern at the SCOTUS level, whether we like it or not.

  5. Mortgage servicer are debt collectors – and they always fail to identify the CURRENT creditor. They think identifying the PAST creditor is sufficient – IT IS NOT SUFFICIENT.

  6. Bob G.

    Are you referring to th 1872 case for Carpenter v Longan? Only other case I have seen to seriously address the issue is a somewhat old Connecticut case (but not centuries old) .

    You are not missing anything. The courts are. The courts are relying on ancient law. It is well known that courts are the last to catch up to financial engineering. As I have said before – Enron defense attorneys banked on this for legal defense.

    This is why we have to address the flaws in the PSA/Prospectus that fraudulently conveyed – nothing. And, the missing chain link for sale of the whole to banks – before securitization of the purchasing BANK’s receivables. And, the concealment of all by MERS/fraudulent documents/notaries/assignments – and all other docs that contradict what was supposedly submitted to SEC- as compliant for security pass-throughs. .

    The bottom line is this – even if they try to assume that the mortgage follows the note – and vise versa – the loans are NEVER stuck in time. They are constantly moving – constantly changing – with no required regulation to show the changes/movement.

    I find it incredible that courts remain “stuck” in a time warp – as to “possible” securitization into a shell Trust. – years ago – and attempted “recording” – years later. How can the courts really believe that NOTHING happened after original “earmarked” securitization?? – and this is regardless of whether or not the court abides by ancient law as to whether mortgage follows note.

    The problem is that we do not really know the path of the mortgage or note. Any supposed transfer to a trust – even if valid – which is doubtful – was temporary – and NOT necessarily the CURRENT place of the mortgage or note.

    Strongly disagree with Dan Edstrom – as to the servicers currently making payments to the trust. But, none of this can be ascertained without complete discovery which includes Trustee ledgers.

    End result – it does not matter whether or not the courts still find old law applicable as to whether or not the mortgage follows the note. If we do not know the REAL and CURRENT place of either the mortgage or note – we know nothing. And, —-as it now goes – we know nothing.

    Look – if I was “married” ten years ago – and then subsequently divorced – and I still claimed to be “married” today – I would BE LYING. And, that is assuming the marriage was valid and legal – to being with.


    Please cite me to the location of the Securities and Exchange Act of 1933 that supports your contention. Need to know. Money on the line.


  8. The argument of “splitting” the note from the mortgage is the “non-recording” of the trust entity as the holder of the mortgage.

    I.E. Wells gives me a loan, has me sign a “mortgage” to “secure” repayment of the note. Now, they sell the note forward to a trust, but the recording (perfection of security interest) in the name of the trust in county records never occurs. This results in a break in the chain of title. The Securities and Exchange Act of ’33 requires the perfection of the lien to protect the investors. This is where the ship sinks. Everybody dies except “Molly Brown” and a few others (the National Banks).

    Amazing how many lawyers there are that have no clue or even an interest in learning about and pursuing these claims. Talked to a couple of them today. Very discouraging, to say the least.

  9. ANON or others in the know…

    If the mortgage travels with the note per Carpenter v. Longan, how can the mortgage ever be separated from the note? Regardless of who says it holds the mortgage, if the mortgage travels with the note, it cannot be separated. So what am I missing here?

  10. Dan Edstrom

    Thanks for the help with MPLA to Bob G – correct – most often you will find an amendment – or a “preliminary” agreement.

    While a “liquidated” loan (as you refer to) can mean that a foreclosure has occurred – and all payments have been advanced by servicer up and until the foreclosure was finalized, it does not necessarily mean this. It is also used in accounting in which the loan is accounted for as liquidated – but the property not actually foreclosed upon. The servicer is only obligated to make payments until the servicer deems the loan as non-collectible and the loan is then placed on non-accrual. There is no reason for servicer (actually entity who is funding servicer) to keep the loan as part of the pool – just to keep it there. While some may do this – at some point it makes no sense as to profit. Typically, in practice, default loans are bundled together and removed – and for a price.

    Search for “Countrywide Fixed Rate Seconds Charge-Off Policy Changes for …” – a PDF.

    And, I have seen loans reported on certificate holder statements – with current amount owed (not zero) – when in fact the loan was repurchased. Cannot explain why this happens – other than servicer can report anything they want as to current status. And, certificate holder statements cannot be back-tracked. Thus, you cannot trace any deviations or changes that were paid prior to the current statement.

  11. Bob G

    Mortgage Loan Purchase Agreements are hard to get – as they are not usually filed with the PSA. Even if I could find one – too long to post here. Try to google – or search Lexis to see what you can find. Perhaps, Neil can provide one here – as it would be interesting for others to see that Repurchase Agreement is part of MLPA.

    As far as I know, the YSP – is the fee paid to mortgage broker to “search” for best loan to borrower. The bank pays the YSP to the broker. This is also interesting because the originator would not pay this fee IF they are selling the loan to the bank. The “fee” is actually paid for by the borrower in the form of a higher interest rate above the market rate. Of course, the certificate holders (who are security underwriters) would benefit by the higher rate paid by the borrower.

    As I point out before, if there was a prearrangement for loan to be sold – the broker clearly did no work to find a “best interest rate” for the borrower.

    Believe YSP may have been recently banned by the Federal Reserve. Cannot confirm this. See Below:

    DealBook – A Financial News Service of The New York Times
    August 17, 2010, 1:56 am
    Fed Adopts Rules to Protect Home Buyers

    The Federal Reserve on Monday moved to end a controversial lending practice that had helped propel the housing boom to unsustainable heights and then accelerated its collapse, David Streitfeld reports in The New York Times.

    The Fed announced that it was adopting new rules banning yield spread premiums, which allowed mortgage brokers and lenders to gain additional profit from loans by charging borrowers higher-than-market interest rates.

    Reaction to the change was muted. For one thing, the recent package of financial reforms passed by Congress this summer already addressed the issue. And some thought a ban should have been imposed long ago, at a time when it could have directly affected loan quality.

    Michael D. Calhoun, president of the Center for Responsible Lending, described the action as “a real milestone,” but he said that he had been trying to convince regulators for at least 15 years that yield spread premiums were no more than illegal kickbacks.

    Many borrowers had little idea of what a yield spread premium was, even when it was costing them money.

    Historically, mortgage brokers have been paid directly by the home buyer. The rise of the premium allowed the brokers to be compensated by the lender as well. Lenders in effect started paying bonuses to brokers who brought them high-interest loans that were naturally coveted by mortgage investors.

    From there, critics said, it was a short step for some brokers to put unsuspecting buyers into these loans and tell them it was the best deal they could get. Subprime lenders in particular often used yield spread premiums.

    Go to Article from The New York Times »
    Go to Federal Reserve Press Release »

  12. Bob,
    Here is a link to an MLPA, but it is an amendment so it does not include the entire original MLPA.


    Notice that the CLTV (Current Loan-to-Value) is referring to a loan that has been substituted. Very interesting.

    Here is a link to an assignment and assumption agreement:


    In my reading of many different monthly certificateholder statements I have yet to see a repurchase or substitution being reported to the investors. They always (so far) show as zero. I am not implying they don’t happen, just that they are not reported as happening. Additionally in 99% of the cases I have seen the servicers are making principal and interest advances. Deutsche Bank has admitted in discovery (not my case) that the servicer makes principal and interest advances until the loan is liquidated. My research indicates the loan is not in default unless the servicer stops making advances. Why would the loan need to be removed from the trust if the loan is current? The servicer makes advances as a guaranty or surety. According to the section of the borrowers note (usually but not always section #9) titled “Who is obligated” a party acting as a guaranty or surety is responsible the same as the borrowers who signed the note. If the servicer is obligated and required to make advances and responsible the same as the borrowers then how can the loan be in default if no payment has ever been 30 days late? It appears to me the primary reason for the advances is to keep the REMIC status of the loans intact.

    Dan Edstrom
    dmedstrom “@”

  13. ANON – my reading of the PSAs indicate that the yield spread acct — as well as overcollaterization–was for the benefit of the certificateholders, not the mortgagors. They stated that this would be cheaper than providing certificate insurance.

  14. ANON – can u provide a link to even 1 MPLA ?

  15. concerned

    And, that is the problem. There are more “horror” stories than you can even imagine.

    Bob G

    The MPLAs are not always available – usually you will see “Exhibits attached” and the end of PSA – but they are rarely attached. Although, you are sometimes able to find the MPLA in other SEC filed documents – or, at least a “generic” form. Nevertheless, the MPLA should be attached to any PSA submitted in courts – as should be the Mortgage Schedule – which is also an Exhibit attached to PSA – but very often, not filed. And, the Mortgage Schedule – for some 3, 4, 5 years, etc. ago – is never accurately updated – and may not have been the final Mortgage Schedule for Trust inclusion of the loans – due to Repurchases and removal of default and/or “non-compliant” loans.

    Only accurate source of confirmation of loan in said Trust – is the Trust ledger – as mandated by the PSA. To date, I do not know of one Trustee ledger submitted to a court of law – and I know of few attorneys who have asked for it. Doubt trustee will sign any affidavit that falsely asserts they have received all payments and advances from the servicer – as required by the PSA. At least not today – will they sign that affidavit – I do not think so.


    Understand. And, courts have not done their duty to ascertain this – save a few courts – such as Judge Schack’s court.

    b davies

    Yep – as far as loan numbers.
    And, Opteum – will not say anything else here – but where were they organized ?? headquartered? Maybe you can should research this. What state allowed them to get away with all?? Debt buyers – anyone??

  16. Well, I guess that helps partially explain why I got two different sets of debt validation letters, one claiming my debt was owed to Litton Loan Servicing and then a few days later I got another swarm of the same form letter, supposedly citing the anount owed as of the same date, but stating the Mortgage Electronic Recording System was the entity the debt was owed to.

    Both statements were incorrect.

    I probably also explains why during a court case in 09, Litton advanced the information, in filings with the court, that CWABS 2005-10 certificate-holders were the investor. Simultaneously BofA was claiming to the the beneficiary by succession to “America’s Wholesale Lender – A Corporation” which was the identified ‘lender’ on my original docs. Only AWL was only an improperly documented and registered ‘D/B/A’ of CountryWide’s.

    I guess that explains too Litton using MERS in 2009 to substitute a new Trustee.

    Only it leaves the question of WHO Litton is actually working for. Regardless of the assertions to the court in 2009, in 2010, Litton used MERS to generated an assignment of the DOT to the Trustee for the CWABS 2005-10 certificate-holders.

    I suspect that MERS is being used to hide the fact that the “collection rights (were) sold to unidentified swap provider and/or third party distressed debt buyers/hedge funds.”


    Where can i find a sample MPLA associated with a sample Trust or PSA ?

  18. As usual, I didn’t understand any of this! LOL It’s just too dang complex. I guess I’d better break out the dry erase board and try and make sense of it.

    Bottom line, who owns our loans? Who can foreclose, if anyone?

  19. Important Points to Understand

  20. RAST 2007-A5–PSA

    As promptly as practicable after any transfer of a Mortgage Loan under this Agreement, and in any event within thirty days after the transfer, the Trustee shall (i) affix the Trustee’s name to each assignment of Mortgage,as its assignee, and (ii) cause to be delivered for recording in theappropriate public office for real property records the assignments of the Mortgages to the Trustee, except that, if the Trustee has not received the information required to deliver any assignment of a Mortgage for recording,the Trustee shall deliver it as soon as practicable after receipt of the needed information and in any event within thirty days.

  21. Also the warehouse loan number is different from those provided and used for tax statements proffered to the IRS.
    So there were 4 different loan numbers for my loan. The hidden one Colonial Bank Warehouse was not disclosed.

    I have now done suponeas for all records from Opteum including contracts for the warehouse line of Colonial Bank.

    By the way the DOJ shut down and arrested those with the warehouse line for Colonial Bank. Opteum is now Bimini Capital and file with the SEC.

    With research all the ducks line up. The OCC, OTS, SEC, FDIC, AG’s, California Corp. governing lending, and anyone who would listen have been provided these documents.

  22. In discovery I found the document below.
    My originator–Universal American Mortgage
    the loan number was xxxxxxxxxxxxx.
    Second in line Opteum Financial allegedly sold in 3 weeks. Loan number yyyyyyyyyyy
    Then there was Indymac Bank FSB loan number zzzzzzzz

    Now the SEC records show that there was no relationship with Colonial Bank and Universal the originator.

    The SEC has records that Opteum used Colonial Bank for their warehouse line.

    Further that the security collateral was sent to Colonial.

    Now look below. From a closing screen shot from INDYMAC BANK sent to me in error. it shows what Anonymous wrote above. Lending by Colonial on my date of funding by the warehouse for Opteum Colonial Bank and that Colonial was the warehouse for Indymac as the investor.

    The endorsed notes show Universal—->opteum on an allonge
    Indymac–>>endorsed in blank wihout recourse.

    Then MERS filed the NOD.
    Then MERS for Originator to trust
    Then Substitution of Trustee by Trust
    Then second Mers assignment to fix the married sole and separate defect to include single sole and separate.

    This documentation suggest the story above is verified by documents from Indymac

    FINAL DQCS 3-26-2007 7:22:42PM
    BORROWER NAME : Davies, Brian
    LOAN # 8600018614
    STREET ADDRESS: 43-277 Sentiero Drive
    Indio, CA 92203
    DATE FUNDED 11/17/2006
    DATE DISBURSED: 11/17/2006 40,11
    ,WAREHOUSE BANK- Colonial Bank
    DESCRIPTION 30 Year Fixed Alt A 1/0 Buydown Interest
    LOAN TYPE : Cons,
    Indy Mac Bank 3/15/2007

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