Correcting Misimpressions of Securitization: The Bill Gates Owes Me Syndrome

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

I’ve figured out that because I wasn’t clear in the way I said it, some people have been led astray. So let me state it clearly that the appearance of a loan on an internet site is neither proof nor even evidence and may not be a worthwhile guideline in determining the “ownership of the loan.” If someone files something with the SEC and claims that XYZ loan is in a pool of assets, that is merely a report that is supposed to be true but in 99% of cases, it is is my opinion that is NOT true. If the loan shows up on the Fannie Mae site that does not mean FNMA owns it, but it might mean they think they own it or they claim to own it. The law recognizes the difference between a self-serving claim like writing a letter confirming that Bill Gates owes you a billion dollars, versus actual evidence with proper signatures, authority and following the appropriate rules and provisions of contracts.

The documents you prepare to substantiate the fact that Bill Gates owes you a billion dollars may LOOK good, but if they are not signed by him or anyone on his behalf, based upon authority signed by him, they mean nothing except that there is a fraudulent attempt to convince someone that Bill Gates owes you a billion dollars. Under no circumstances will Bill Gates ever pay you that billion nor will anyone ask him to do so. And that is true even if you put your documents on the internet. The difference I am making here is the distinction between saying you are going to do something (the securitization documents) and actually doing it. Saying you will or you want to is not a legal act.

This is the case with the mortgage mess. The securitization structure was set up and everyone acted as if the the loans were actually being legally transferred, except they were not legally transferred and no effort was made to do so. In fact, no effort COULD be made because the only party that COULD have transferred rights to the note or mortgage was the party named on those instruments. And THAT party never loaned you any money, so the documents are void. Transferring void documents does not improve their quality.

So if the loan appears on the site of FNMA that doesn’t necessarily mean anything. That does not mean that the loan is actually owned by them, it is merely a report. In turn, nearly all loans processed through the GSE infrastructures were sold into the secondary markets and “securitized.” The question is what was securitized. It is becoming increasingly clear that since no actual documentation of any transfer actually was created, signed or delivered, that the legal ownership of the loan would be presumed to be in the name of the party of record (in the county title records) who is named as the mortgagee or beneficiary. However, since this was only the originating party in most instances, and was acting merely as a broker, the actual money came from another source to whom an obligation is owed. Therefore in my opinion, (you should check with a licensed attorney before making any decision or acting on anything in this email or any of our reports) the MOST likely unavoidable legal result would be that the mortgage encumbrance was incorrect and void at the time it was created, which in the law, we say void ab initio. That would be because it names the wrong party to whom money is owed. The net result according to the laws I know, is that the obligation exists, but it is (a) unsecured and (b) due to an unknown creditor (solely because the securitization parties refuse to provide the information).

While the securitization of loans is thought to mean that the actual loan documents were used as a the basis for parceling out risk in subsequent documents, thus creating mortgage backed securities whose value was enhanced because of the reduction of risk, this did not turn out to be the case. In truth the only actual legally recognizable events or process was that numerous parties were given access to cash flows to and from the investors, the borrowers, and the co-obligors and guarantors whose obligation induced the investors to believe that their investment was safe, but whose existence was hidden from the borrower and whose actual participation was obscured from the investors.

So where does that leave us? “Securitization” is nothing but a code word for access to money. It’s like MERS, which was a vehicle for hiding the real action. Access is not the same as ownership. Just because you can get in the car doesn’t mean you own it, even if you are in the driver’s seat and now and then. So why do title and securitization analyses? Because until there are more Judges that understand this than there are judges who don’t the burden is always going to be on you to disprove things that the other side SHOULD first be required to prove but isn’t.  Unless you and your attorney really understand this stuff, they will dance rings around you. You can’t be a securitization expert or a title expert. But you can walk into court with reports showing inconsistencies and breaks in the chain of title, authority and ownership and THEN maybe the judge will demand that the pretender lender, stop pretending and either put up or shut up. And the other reason you get the the COMBO analysis is so you can follow the probable path of the money in order to claim offset for reduction of the “loss.”

19 Responses

  1. its a shame that it has come to this but the greed of the banks have brought this on and wish those luck fighting the system luck because it is corrupt …

  2. Hi David,

    If you live in California, visit

    It’s focused on California, but help you with a starting point in other states, as every state varies a little on the particular law and how things must be executed.

    For example, I believe in Florida, a “Nominee” may conduct a foreclosure, but in California a Nominee can’t.

  3. Hi Karen,

    Great responses… The more we can respond with solid common-sense comments – the easier it will be for public opinion & courts to realize the reality & truth. IMHO – it is critical for folks to have a reasonable response for the typical lambasting borrowers receive by the public and especially the courts.

    What is so frustrating is to know these lenders have broken the law – yet, we don’t have a website pointing directly to those laws and with an explanation of the violation. Everything is left vague and folks simply cannot figure out where to even begin. It started with TILA violations… then securitization and both are still viable and…

    Now it’s Recordation Violations – but how – what about the UCC laws & Recordation… yes, recordation is primarily a State Real Property Law issue – but these laws are adopted from the UCC.

    I wish we could simply narrow down to 4-5 basic points these loans have in common and the laws broken. If the typical path these loans takes looks like this…?

    • Borrower goes to Originator to get mortgage loan
    • Originator sells loan to Sponsor
    • Sponsor sells loan to Depositor
    • Depositor sells loan to Trust

    The above occurs to establish securitization. That equates FOUR transactions. Do each of those transactions REQUIRE recordation in county land records to maintain a Chain of Title? If so, what MUST be attached – permanently affixed to the Deed of Trust? If this is required, but was not – what laws are violated? What consequences are dictated by law for their violation?

    This (or something like it) is what I feel we desperately need. Desperately needed because our laws are being changed as we speak. These lenders have their lobbyists working 24/7 to influence the changes they need so we have no legal recourse.

    The laws broken are within States Real Property – UCC – some Fed and some TILA. The States Real Property & UCC – are KEY to cut-off the lenders rights to the collateral. Cutting OFF that collateral SHUTS THEM DOWN and that alone will help most folks get true remedies.

    I realize I do-not understanding all the facets of the law but zeroing – in on these areas will help many folks force a level playing field with the lenders. This what they were supposed to do but didn’t – because of that these are the consequences… If the judge ignores it, file charges and lawsuits against the judges using the same laws.

  4. To DNY: You have a very good point. Removing files from the Office of David J. Stern that are being investigated is very strange Indeed. In fact, that could be construed as destruction of evidence or obstruction at the least. Are the files being inspected before they are sent back to Fannie and Freddie? Something does not smell right.

  5. Dny. Agreed isn’t that funny but beco
    ing oh do usual Fannie and Freddie are dirty they are all dirty the human suffereung thus is causing and will continue to cause because of greed

  6. @David!

    When I was interviewed with Bloomberg, the reporter just kept after me…..”Your goal is a free house, isn’t it?”
    I kept telling him, this is NOT free! I am defending our due process, I am defending our recordation system, I am defending PROPERTY RIGHTS! I told him that I was doing my civic duty and HIS civic duty.

    I asked him, “If you knew that if you walked away, you were walking away from a fraud perpetrated on you to take my $70,000 down payment, would YOU walk away?” His answer was my answer, “NO!”

    I also asked him since this has caused me to conduct my own research 12 hours a day during my unemployment and approx 5 hours a day after I again became employed, who in their right mind would want to give up their free time, give up their social life, basically give up 2 years (and counting) of their life to this fight? WHO? He couldn’t answer that. But, finally, he agreed, it was no free house. It came with a big price.

  7. The Issue/Problem with Courts & Public Opinion is Perception

    How many people signed the loans to get a Free House? None
    How many knowingly borrowed more than they could afford? None

    Perception is Key – These borrowers were SOLD a Defective Product. This is no different than the Toyota fiasco not long ago nor even the Ford Pinto problem back in the 70s.

    If we want to change the courts opinions we must change their perception & understanding of the issue. The lenders sold a defective product. They knew it was defective and that is why they introduced so many middlemen into the process. They were attempting to insulate themselves from liability.

    If we start using them own tactics against them, we can change public opinion. These were PINTO LOANS. They were left with KNOWN design flaws with a very likely potential to EXPLODE.

    Why do you think they use the term LIAR LOANS? Because anyone having one of these loans is now “perceived” to be a LIAR. They knew they could not afford the loan – that is why they’ve twisted the LIAR LOAN as a bumper-sticker for banks. Initially, LIAR LOANS was aimed at the BANKS & Wall Street because THEY KNEW they were lying to both the borrower & investor. They quickly grabbed that comment to BLAME the borrower.

    WE must do the same thing to change public & judges opinions. These loans were DEFECTIVE PRODUCTS. That is the truth. It is critical we pound that hammer until it is NAILED & permanently “AFFIXED” to public opinion & courthouse doors. This is all about perception.

    Perception opens the door to understanding. That door is shut because folks with those loans are liars. That is how they play the game. Look at every controversial issue and the game is perception. We are fighting PROFESSIONAL liars who are EXPERTS with changing perception.

  8. THE A MAN

    Yes – but when did our judicial system get like this?? Old enough to know that our court system has some flies in the ointment – but not to this extent. This is now a court system – hijacked. These foreclosure law firms know how to play the game – and the tiniest “technicality” – will get you tossed. And, the defense law firms, except for a few, are taking a long time to “catch up.”

  9. Anonymous the judges get their orders from higher up they are just rubber stamps. This is a political issue.


  10. An other way of looking at it might be:

    MERS is a Mortgage Exchange not unlike a stock exchange. It allows banks to buy and sell home mortgages much like stock. Stock exchanges don’t own the stock on their exchange, only the investors do.


  11. Do not have much to argue with what Neil states here. Most is correct.

    Neil writes “Because until there are more Judges that understand this than there are judges who don’t the burden is always going to be on you to disprove things that the other side SHOULD first be required to prove but isn’t.” – this also correct – and just heard an attorney state the same – “it should not be my duty to prove that the mortgage loan is not where they (plaintiffs) state it is – it should be THEIR duty to prove it is where they state it is – and there is enough evidence to at least question that it is not where they they say it is. ” But, the judge is fixated on foreclosure – (although no decision yet).

    Why are the judges fixated on granting foreclosures??
    While their is some success in some courts – the majority of courts are just pushing the foreclosures through without question. Some of this can be explained by the fact that judges had already put through so many foreclosures BEFORE people starting challenging. Thus, to admit they are wrong NOW – would be to admit they were wrong before – and NO judge EVER wants to admit they were wrong. Also, judges listen to the media (and Pres. Obama) calling home owners “deadbeats” – judges are, too often, not impartial and treat victims like the criminal – simply because they are swayed by the media.

    Dying Truth – agree organizing is extremely important.

  12. “The rise of the tea party is a direct result of foreclosuregate.”

    Uhhh, sorry. The tea baggers can’t even begin to comprehend this fraud. They just know they’re mad. Why don’t you ask them. They will tell you…..the government should stop regulation, business will regulate itself.

    They are idiots.

  13. This is a giant Ponzi scheme of unparalelled proportions. My experience out in the real world with people who are not behind in their mortgage, still refuse to believe what has happened. Everything is boiled down to “I am paying my mortgage, so what’s right is right. You have to pay yours or lose your house.” They can’t wrap their minds around the fact that their note and mortgage is mixed into the Ponzi scheme and that their line of title has been broken. Wait until they try to sell their house, and the title company will not insure the title. We somehow must be able to reach more people and get the word out.

  14. David they broke the chain of title so they can sell the loan multiple times. Because they knew ahead of time that they can foreclose and get the borrower out of the picture. Find another borrower so that the Ponzi Scheme can continue. But the plan like all criminal plans are doomed to fail.
    They can get rid of us the borrower but they can’t find another one fast enough. The messiest of the bunch Bank of Amerifraud is gonna take the first shelacking. They have also pissed off the politicians. The rise of the tea party is a direct result of FORECLOSUREGATE.

  15. OK, so check out this going down in Florida: Foreclosure investigation: AG is looking for evidence of kickbacks by Harriet Johnson Brackey November 4, 2010 10:46 AM (Sun-Sentinel story at ):

    “Follow the money.”

    “Florida Attorney General Bill McCollum’s office is looking for it, in its investigation of the foreclosure law firm of David J. Stern.
    What’s at the bottom of the AG’s investigation was almost a throw-away line in a recent hearing in Fort Lauderdale.”

    “Assistant Attorney General Theresa Edwards, in her very last response to a question from Judge Eileen M. O’Conner, says that yes, the AG’s office did receive thousands of documents from Stern’s firm but not the documents it wanted.”

    “The documents it wanted “may involve kick backs (sic) to the servicers who are hiring them, which surprisingly weren’t included in the documents. So that’s why we want to keep looking.”

    BUT – Guess what was reported in the Wall Street Journal the day before, on November 3: Fannie, Freddie Cut Ties to Law Firm (at

    “Fannie Mae and Freddie Mac terminated their relationships with a top Florida foreclosure attorney on Tuesday, one day after the companies began taking back loan files from the firm that has processed thousands of evictions on behalf of the mortgage-finance giants.

    “Fannie and Freddie dispatched employees on Monday afternoon to begin removing loan files from the law offices of David J. Stern in Plantation, Fla. Those files are needed to process foreclosures, which must be done through courts in Florida.”

    SOOOO… Perhaps those documents that the Florida AG is looking for – documents that evidence kickbacks – are in the “loan files” that are quietly going out the back door, back to the masters at Fannie and Freddie. Isn’t it more than a bit odd that, while an investigation is going on, documents are allowed to be removed from the offices?

  16. DyingTruth.. pretty bleak reality.. and it is the reality.
    Our gov has to make sacrifices too-but WE ARE THE SACRIFICE… TODAY_this is OUR GOV, now afflicted with [ BANK Disease] the patient will not survive treatment.This GOV IS a RED TAPE MONSTER that thrives on & I.
    We have been sacrificed to THE debt collectors – when NEIL posted the question of-re- ALL OF THE DEBT COLLECTION in this country, these practices & debts are at best highly questionable,at worst totally, illegal ,usurious ,predatory , designed to exist into perpetuity. The money changers must be purged!

  17. If the originator sold the loan thus was Paid in Full, why is there “no” Certificate of Satisfaction recorded in Land Records? Doesn’t that leave a “back-door” open (sort-a-speak) so the originator could come back and re-claim the debt even though they’ve already been paid? The borrowers have no defense.

    Why can’t homeowners file a “Corrective Assignment” PAID IN FULL to themselves?

    The fact of the matter is that subprime borrowers were sold a DEFECTIVE PRODUCT. The DEFECTIVE PRODUCT was designed with known defects. It is akin to saying – accident victims from the Toyota brake failure cases were at fault because they were given an Owners Manual therefore the accidents are evidence of the accident victims’ failure to properly maintain their vehicles. Brakes are an essential part of the vehicle. They should have checked them more thoroughly…

    These Borrowers were sold Defective Products. The simple fact that Toyota LEARNED of the defect – then PAID a subcontractor to use Toyotas’ BLUEPRINTS to continue building the same defective brake and then installed that defective brake in their vehicle does (should) NOT eliminate their culpability.

    The problem is perception. Judges are convinced these borrowers KNEW of the defects and in fact, believed those defects were beneficial to them thus they took the risk and signed. That is NOT true. The borrowers went to the Toyota dealership to buy a SAFE vehicle – but were sold a defective vehicle. As it pertains to these loans – it is much WORSE because all the dealerships KNEW about the defect and figured they could earn extra profits by charging service fees as warrantees expired. It didn’t work because too many brakes began failing. NOW they are all pointing towards the accident victims claiming they did not properly fulfill their end of the deal…

  18. Thanks for explanation. Securitization is becoming more clear to me now.

  19. What is the point to any of this? Why not come out and speak the truth. Unless the REAL People of America strategically organize enough people to sign petitions demanding IMMEDIATE removal of ALL cops, sheriffs, judges, AGs, legislatures, congress, governors, president and any other FAKE federal agency, all of whom are nothing but a drain on society and do ABSOLUTELY NOTHING TO HELP BUT WHITEWASH THE PROBLEM, THEN MORE AMERICANS WILL CONTINUE TO LOSE THEIR HOMES AND KILL THEMSELVES JUST LIKE THE GOVERNMENT WANTS, AND THERE WILL BE EVEN MORE MASS DEATHES FROM HOMELESSNESS AND STARVATION JUST LIKE THE GOVERNMENT WANTS. Because just like they told us WE have to make sacrifices THEY don’t.

    Speak the TRUTH Neil, quit given the run-a-round and recognize the inevitable. Those are the only 2 choices We as Americans have.

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