Fannie Mae, Freddie Mac and Government Sponsored/Owned Entities in the Title Chain?

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

EDITOR’S COMMENT: The piece below is a cut and paste from the FNMA site without any editing. The latest round of finger pointing has put Fannie and Freddie in the path raising even more obstacles to identifying the creditor, and the holder of any right to foreclose on a home mortgage. So I thought it would be helpful if you knew what these entities are and what they are not. First and foremost they are NOT LENDERS. They never were and they never will be. Nobody ever applied to Fannie for a mortgage and Fannie never gave them funding or documentation for a loan.

The problem that keeps coming up is that FANNIE, although never the foreclosing entity that I have seen, is showing loans in its portfolio on its website while at the same time some private entity is doing the foreclosure. And some private entity, frequently new to the party is submitting a “credit bid” at the auction. And some private entity, frequently a third player new to the party is getting title to the property at the auction. Go to any title examiner and ask him or her what they make of that and they will have no answers — but they WILL have a bunch of questions, which is why I keep saying that there are questions of material fact that are being ignored by the courts in their rush to get their dockets cleared.

The mere fact that a title examiner would not have any answers and would have questions is enough to say by definition that title is clouded and probably unmarketable. Any in-depth analysis would lead to the conclusion that the situation is worse — that title is defective and digging deeper, that title is fatally defective. What this all means is that each foreclosure judgment and each foreclosure auction sale whether in a judicial or non-judicial sale is probably corrupting the chain of title — in the absence of a court order declaring the status of title and encumbrances (i.e., a Quiet Title Action).

Amazingly, the situation might be worse than that: digging still deeper, one finds that the mortgagee (or beneficiary) under the deed of trust is frequently defined as something different than the lender and that the lender is not the creditor because the money came from an undisclosed third party.

So the inescapable question is whether the note is indeed “evidence of the obligation” as was presumed before the era of securitization, and therefore whether the mortgage was a valid or perfected encumbrance since it refers to the note, when the obligation both in its terms and the parties is different than what was described in the note.

Back to Fannie. Did they fund the mortgage? Probably not as we have seen no cases in which a wire transfer or check came from Fannie to fund any mortgage loan. Even if they guaranteed the receivable are they a secured party? I’ve asked that question to quite a number of very smart lawyers and professors and they have no simple answer. May third parties act for Fannie in foreclosures? Perhaps, but not without saying so and proving their authority.

So if Wells Fargo or some other entity says they are the owner and holder of the note, that might mean something and it might not. Because if the note is invalid and not a description of the obligation from the borrower it doesn’t matter who owns the note. And if the note is valid, the same robo-signing questions come up as to delivery of the original note, endorsement and assignment. Either way you have a question of fact that would-be foreclosers are presently using great skills to finesse the evidentiary questions presented here. And if Fannie is showing ownership on its site, the question is ownership of what?

There is a big difference: On one hand you have the multiple receivables created by the origination of a loan and the attempted securitization of the receivables from that loan, as additional parties are added as co-obligors, guarantors and insurers, mostly with an express waiver of subrogation — meaning that damages might be mitigated but there is no transfer of the right to enforce or foreclose (thus the collateral source rule would allow set-off). On the other hand you have partially completed, undelivered documents with no indorsements or assignments sitting somewhere, lost or destroyed.

Thus the inevitable question is “what do you do with an obligation that has no valid documentation when the original intent was clearly a mortgage loan?” Is the obligation unsecured? How should it be listed in a bankruptcy petition? Who, if anyone, has the right to file a motion to lift stay? The second question is “how do you value an obligation when loss mitigation payments were received by a presumed creditor with an express waiver of subrogation?”

And the third question, which is the subject of this article is “how do you identify the creditor when Fannie has the loan on its website?” Who can make a credit bid without cash? To whom should title be transferred?


About Fannie Mae — see FNMA Description of Itself

Fannie Mae is a government-sponsored enterprise (GSE) chartered by Congress with a mission to provide liquidity, stability and affordability to the U.S. housing and mortgage markets.

Fannie Mae operates in the U.S. secondary mortgage market. Rather than making home loans directly to consumers, we work with mortgage bankers, brokers and other primary mortgage market partners to help ensure they have funds to lend to home buyers at affordable rates. We fund our mortgage investments primarily by issuing debt securities in the domestic and international capital markets.

Fannie Mae was established as a federal agency in 1938, and was chartered by Congress in 1968 as a private shareholder-owned company. On September 6, 2008, Director James Lockhart of the Federal Housing Finance Agency (FHFA) appointed FHFA as conservator of Fannie Mae. In September 2008, we also entered into an agreement with the U.S. Department of Treasury that was most recently amended in December 2009. Under the agreement, Treasury will provide us with capital as needed to correct any net worth deficiencies that we record in any quarter through 2012. The agreement is intended to ensure that we are able to continue providing liquidity and stability to the housing and mortgage markets.

Fannie Mae has three lines of business – Single-Family, Multifamily and Capital Markets – that provide services and products to lenders and a broad range of housing partners. Together, these businesses contribute to the company’s chartered mission to increase the amount of funds available in order to make homeownership and rental housing more available and affordable.

38 Responses

  1. Any updated thoughts on this subject?


    For immediate Release / Los Angeles, Calif. – December 29, 2010 – Make certain you understand the following points of contention that address the introduction of GSE “Government Sponsored Agencies” valuation for mortgage serving rights that somehow resolves the wrongful foreclosure issue at the expense of law abiding title holders to realty.

    The entire controversy centers on procedural requirements providing the holder in due course a right to accelerate and foreclose upon determining a breach and borrower default.

    A wide spread gap exists for the traditional understanding of “Main Street” and lenders right of a “conventional “ foreclosure and Wall Street’s “Pavlovian” adherence to Generally Accepted Accounting Principles under the FASB (“Federal Accounting Standards Board”) and watchful eye of the International Accounting Standards Board “IASB” and European community.

    Fannie Mae will insure its Government Sponsored Agencies “GSE” originations including both “flow” and bulk execution’s to traditional secondary markets. Mortgage servicing rights “MSRs” address “NPV” of the cash flows associated with a servicer’s obligation (the liability) to service mortgage loans for the underlying investor.

    The “NPV” is the net present value of the collections or borrower servicing rights that include the right to earn service fees, ancillary fees and float income on custodial funds and borrower escrows (the asset).

    Servicers are mindful of the reps and warranties made in a transfer and assignment of collections with regard to repurchase exposure to government-sponsored enterprises (GSEs). Fannie Mae and Freddie Mac transfers with ownership of the MSRs. This includes any right to demand of the servicer provide servicing advances on delinquent loans.

    Controversy begets more controversy and leads to claims upon analyzing treatment of MSRs as an asset or liability. Further confusion is brought to the matter when both are subject to further analysis.

    A servicing agent holding servicer rights will execute calculated as a percentage of the underlying mortgage loans determined against the unpaid principal balance (UPB) applying a multiple to the weighted-average service fee (net of guaranty fees) to which the servicer is entitled to earn on the pool.

    Consider an aged pool of private lable assets having a variety of limitations upon evaluation of the MSR’s offered in an execution. This includes execution as a whole loan asset with a significant set of issues inherent with a private placement variety of mortgage loan receivables.

    A pass through variety of receivable sold into a REMIC as a private label offering inasmuch the portfolio is subject to accounting rules limiting the serving to a “lock Box” mentality for assets whose liabilities were transferred off balance sheet when executing a whole loan trade.

    The Fannie Mae introduction into these controversial originations sold into an investment Trust are something compelled as pre-emption by the Fed, predominantly under the FDIC jurisdiction Contention of an irregular and unfair advantage will assure the markets of continuing the need for resolving difficult issues tied to arduous accounting standards and contention for highly controlled registrations that violate GAAP

    An irrational or stubborn view towards this nation’s recovery cannot afford a litigant any level of confidence for bringing valid claims against parties foreclosing. Fannie Mae’s contribution to the Feds powers of avoidance are an ominous threat under Preemption and FDIC Repudiatory Powers and charge of view towards rescinding the FDIC understanding for registrations Safe Harbor rules.

    There is huge value in getting Fannie Mae to step in for AMBANC and AIG. It’s a preemptive strike by the government that can once again, it is called Subrogation by the United States “tax payers”, and I mean government.

    Fannie Mae endorsements do in fact significantly increase value of the pool via the Servicing rights. Servicing rights and ownership in a transfer thereof are determined at the time of execution.

    A servicing released execution “SRelE” assumes the assets traded include a third party as a servicer component of the trade. Herein you would have a Litton or Saxon; who purchase the Servicing rights.

    A servicing retained execution “SRelE” assumes Countrywide sells the assets to a partner, as in commercial bank such as BofA. Herein the assets traded to the partner commercial bank (also Mellon Bank or BONY) excite having serving rights retained by the seller.

    Both provide sufficient means and methods for accessing liquidity and the “Seller” in a “SRelE”. The owner of the servicing rights reports the transfer of servicing as a valuable asset , Again the servicing rights include borrower payments in the company’s financial reporting (i.e. 10K ) See, servicing rights are valued in excess of the pools “par” value of the receivable.

    If purchased at execution by a Litton or Saxon, in a “SRelE” transfer by assignment, all servicing rights are owned by successor servicing parties mentioned herein?

  3. JDL,
    I got my supposed pool number in pre-discovery disclosure. However, when I asked about the pool/trust in my Requests for Admission to Fannie Mae, all my Requests were objected to on the grounds that my Note “is not in a Trust.”

    Well, that may be true NOW (or maybe not–as Neil says, “Assume nothing and challenge everything”), but was my Note EVER in a trust? Got interrogatories serviced recently to try to ferret that out. I’m sure they’ll use the same objections…but we shall see…

  4. JDL

    What I would do is enter into a sales contract with an associate for the purchase of your house. Have your associate bring the Quiet Title action or dispute the debt against the property. That way you’re not doing it and you shouldn’t take a hit to your credit rating, as you are not the one doing the disputing.

  5. I agree that those in default are working from a disadvantageous position. I feel bad for them.

    I am lucky to not be in default. But I still want to know that 1) I’m paying the right creditor and 2) they can give me clean title when I’m done paying. I’m very doubtful about both of those questions.

    I want to take the offensive and push for resolution. I want to make them prove they legally own my note or stop paying and quiet the title. But the Frannie angle makes it even more complicated to sort these things out.

  6. JDL

    Have seen Fannie/Freddie pool number “quotes” — but when traced — dead end — not there.

    Consensus (absurdly) is — those in default have no rights — not even to the truth.

    But, not everyone questioning — is in default.

    Conflict is widespread – and mortgage title — forget it..

  7. Several commenters say they know the Fannie/Freddie pool number where their note went. How did you find that?

    I looked in the county records, our DoT is to MERS, no mention of Fannie (who claims to have my note). Service provider and Fannie have not replied to any QWRs. Thanks.

  8. Bob G.

    Yes — there are also “wrap” deals — This straight from the horse’s mouth —- Fannie/Freddie deals were apparently “wrapped” by financial institutions.

    Suspect that in wraps — any non-compliant loans (missing documents, breach of representation, etc.) may have been dumped into subordinate tranches held by financial institutions. Then they were removed and subsequently “resecuritized” as scratch and dents” (not really securities).

    In other words, financial institutions were grabbing up Fannie/Freddie rejects — at least at first. Then financial institutions started operating without Fannie/Freddie — intercepting loans before Fannie/Freddie could get them.

    It is one big mess — every foreclosure should be tossed out of courts.

  9. FNMA Factual Background:

    4-15-03 — Fixed-rate mortgage (PN & DoT) w/ WaMu delivered in California.

    5-1-03– Mortgage loan securitized w/ FMNA Pool #0000701969; CUSIP# 31400Y2A3.
    (*see ~MBS_Prospectus_4_1_03_Final.pdf)
    (*see ~FNMA_RetrievePDF_Supplement To Prospectus.pdf)
    (*see ~fixed rate trust indenture.pdf)
    (*see ~2003-055_Trust_Agreement.pdf)
    (*see ~syndicated.documents.mbs.remiccollateral_hdr.2003-55-Group4.pdf)
    (*see ~syndicated.documents.mbs.remicsupp.2003-055.pdf)

    2007 — Corporate Assignment of DoT: WaMu-to-Wells Fargo Bank, N.A., as servicer.
    (*see ~Mary Jo McGowan_WAMU-to-WFB,NA_Assignment of DoT.pdf)


    Moral of the story:

    1. FNMA Pool information was only identified in the RECORDED CORPORATE ASSIGNMENT of DoT at the COUNTY RECORDER’S OFFICE.

    2. You MUST research official records at COUNTY RECORDER’S OFFICE, including SEARCH BY YOUR NAME & ASSESSOR PARCEL NUMBER (APN). In this instance the Corporate Assignment of the DoT was not identifiable or located by the APN; it was recorded by NAME & THE DOCUMENT NUMBER of the DoT.

    3. On the Corporate Assignment is the Pool #XXXXXXXXXX.

    4. Go to:

    5. Use the SEARCH TOOLS to query the Pool # to learn the CUSIP #. KEEP SEARCHING ALL AVAILABLE LINKS!!!!!!!! DRILL DOWN!!!!!!!!

    p.s. Tomorrow I will upload to Scribd the links for the above-referenced documents and post them in this thread.

  10. I have a loan claimed to be owned by Freddie. It was placed into a Freddie Mac gold certificate, so it was securitized by them. I have their pool number.

    Does anyone have experience locating the REMIC and PSA at the SEC when Fannie or Freddie are involved?

  11. By the way Neil, nice job on the website, over the last year, or a little over, I’ve seen your Alexa rank go from 200K plus, to almost under a 100K, which really is quite a traffic boost and anticipatory reach indicator. It also says a lot for the WordPress accessibility for allowing sites to climb in traffic, without being sequestered behind a million firewalls like and GoDaddy, a free and commercial offering.

    IMO, this web would not have been as osmotic in data and info flow and accessibility on as it is on WordPress.

  12. Oh, what a clever labyrinth the lawyers, politicians and zombies have built for us, how delightful…

    But, Karl Marx, you can roll over in your grave again, because, hey, maybe capitalism will self-cannibalize in the math once stated, coming true…

    But, on a happier note:

    Yet, like capitalism is related to communism, so was so-called grunge related to glamrock, and like communism self-destructed, apparently so will it’s sibling in various real-time events of criminal constructs (good old lawyers), stupidity and desperation, and as the communist st…ate mechanism was cannibalized into an inbred private Frankenstein, cloned around the world, now the bankrupt private mechanism of capitalism is floating upon and melting into the deck of the bankrupt nation-state’s Titanic of illusion, anchored to the doominati’s ‘novus ordo seclorum’ delusionism, forming the ultimate commune to convene upon a global melting ice berg in the sea of America’s overdue sink into oblivion, prior to the cold dark plunge, down to the gates of Atlantis, and into the murk and shadowy rubble of the perpetual collective failure of human management disasters, over centuries of arrogant, self-inflicted concussions, lobotomies and assumptions, wearing life jackets made of solid gold (the banks), paddling uranium boats with plutonium oars(the war device), saying a thousand hail Mary’s and praise Allahs (the infantile religious blood factories)… ??

    or not…LOL

    but probably, or not, or maybe, or not, or perhaps, or… LOL

  13. dny

    “Control Fraud.” Spot on. Captures the essence of the deal.

    I’m a student of history. What we’re trying to get the rest of the country, the media, the pols and judges to believe is a crime so incredible that it defies belief.

    This is exactly what most of the Jews of Europe experienced in the 1940s. They could not possibly believe the magnitude and horror of the crime that was being perpetrated against them.

    “They are just sending us east for relocation purposes,” or

    “They couldn’t possibly be doing that, that’s ridiculous” or

    “How could they possibly be doing that? Don’t be silly. They NEED us to keep the economy running smoothly.”

    So sad. Human nature is unchanging.

  14. Bob G, I stand corrected. And, as you point out, there probably have already been secret meetings to relieve them of the terms of that stip.

    It’s like anybody’s guess what the hell the GSE’s are doing. Probably like a shark feeding frenzy, “debt collectors” swimming with Wall Street and the big fish, Fannie and Freddie and gobbling up “collection rights.” And its the blood of Americans in the water.

    And as in most control frauds, the top people are protected, offered even higher paying positions in government. The GSE’s thus offer yet another vast money-making opportunity for the power elite, like the 2008, 2009 access to the federal window that only the big players got, with the Fed all the while fighting to keep secret their identities.

  15. Might be that we have to win one at a time, with sealed settlements, so that they never have to fess up across the board and pay off every one.

    If they can keep foreclosing nationwide, and only a small fraction of the folks win and agree to nondisclosure, then it is in their best interests to keep that biz model humming along.

    One thing the folks have going for them is the complexity of the machine that these fiends have created. Even their lawyers don’t know what the hell is going on, and that may be to our advantage.

    Look at what one atty for BAC sent in opp to my guy’s OSC, whereby he asserted that BAC lacked standing because it wasn’t the creditor and had already been made whole by Fannie:

    “The Note and Mortgage were executed in favor of Plaintiff, thus Plaintiff has always been the holder of the Note and Mortgage and the proper party to commence this action. The fact that this is a Fannie Mae loan does not affect Plaintiff’s standing. Fannie Mae is the investor that provided the financial backing and has nothing to do with Plaintiff’s standing in this action.”


  16. ANON – much worse than I imagined. A shell game with dozens of shells and distractions.

    “We also invest in mortgage-backed and asset-backed securities that have been issued via private-label trusts. These trusts are structured to provide investors with a beneficial interest in a pool of receivables or other financial assets, typically mortgage loans, credit card receivables, auto loans or student loans. The trusts act as vehicles to allow loan originators to securitize assets. Securities are structured from the underlying pool of assets to provide for varying degrees of risk. The originators of the financial assets or the underwriters of the transaction create the trusts and typically own the residual interest in the trusts’ assets. Our involvement in these entities is typically limited to our recorded investment in the beneficial interests that we have purchased. We have invested in these vehicles since 1987.”

    They have close to $9 billion in auto loans and credit card receivables according to their 2009 10-K. Unbelievable but true.

    Need a judiicial-political mental sea change in order to beat these guys with facts, logic, law and evidence.

  17. dny

    “The agreement * * * bars the company from growing one of its most profitable but risky business lines, that of buying and holding home loans for its own investment portfolio.”

    Reporter got it wrong. Limited to 12/31/05 amounts. But that obviously is not being adhered to any more based on their meeting certain conditions, or they are under the 2005 limit in any event.

  18. Extremely complicated issues regarding Fannie/Freddie — and Congress has kept much secret.

    Fannie and Freddie branched out to include paths divergent from their typical function. Not only did they issue their own MBS – but they also purchased private label MBS. So trying to decipher Fannie’s role – is nearly impossible. Sorry for length of this post.

    Here is some info from Fed Res (TILA Opinion) regarding Ginnie Mae — only a guarantor — but appear Fannie/Freddie also acted a a guarantor is certain instance — and we all know issuers defaulted:

    “The Board has received a letter from
    the Department of Housing and Urban
    Development’s Office of General
    Counsel, in its capacity as legal counsel
    for the Government National Mortgage
    Association (Ginnie Mae), seeking to
    clarify Ginnie Mae’s status under
    Section 404(a) of the 2009 Act. Ginnie
    Mae guarantees securities that are
    collateralized by mortgage loans. HUD’s
    letter states that, as the guarantor of
    these securities, Ginnie Mae obtains
    equitable title in the mortgage loans but
    further states that the issuers of the
    securities retain legal title to the loans
    that collateralize the securities.
    According to HUD, legal title to the
    loans is not conveyed to Ginnie Mae
    unless the issuer of the securities
    defaults in its obligations. If the
    securities issuer defaults, Ginnie Mae
    can immediately extinguish the
    securities issuer’s interest in the loans
    and take legal title. Based on HUD’s
    representations and legal opinion
    regarding Ginnie Mae’s status, the Board
    believes that the requirements of
    § 226.39 do not apply to Ginnie Mae
    until it finds the issuer in default and
    acquires legal title to the loans.”

    Below is from Fannie’s website:

    “Understanding Fannie Mae as a Securities Issuer
    Fannie Mae provides the following information to help users develop a further understanding of the mortgage-backed securities Fannie Mae issues. We also give information about the company’s financial performance, as well as introductions to the two categories of securities we issue — debt securities and mortgage-backed securities.

    Congress originally created Fannie Mae as a government agency in 1938 to establish a national secondary market for government-insured mortgages. Since then, the company has evolved into a shareholder-owned, private corporation supporting the secondary market for conventional and government loans. It continues to operate under a congressional charter with oversight from the U.S. Department of Housing and Urban Development and the U.S. Treasury.

    Our two primary lines of business:
    · Portfolio Investment, in which the company buys mortgages and mortgage-backed securities as investments and funds those purchases with debt. By doing so, it expands the total amount of funds available to finance housing in the United States.
    · Credit Guaranty, which involves guaranteeing the credit performance of single-family and multifamily loans for a fee.
    When Fannie Mae guarantees a security, it is important to note that the guaranty is based on the financial health of the corporation and is not backed by the full faith and credit of the U.S. government.”

    And, from an academic journal

    “The guarantee side of the GSEs’ business involves the securitization of mortgages, i.e., purchasing loans from lenders, bundling the loans into mortgage-backed securities (MBS), and selling the securities through Wall Street firms. Fannie Mae and Freddie Mac assume the underlying credit risk on the mortgages they securitize in exchange for a guarantee fee. Because of their government ties, investors have traditionally seen this guarantee as carrying the full faith and credit of the federal government. The outstanding securities of the GSEs now stand at approximately $5 trillion.
    The investment side of the GSEs’ business involves their retained mortgage portfolios, which include whole loans, their own MBS, and “private label” securities primarily backed by multifamily, subprime and Alt-A mortgages. The GSEs fund their investment portfolios by issuing corporate debt, and generate income from the spread between the interest rates on their mortgage holdings and their funding and hedging costs. The GSEs’ combined portfolio holdings are now roughly $1.6 trillion.
    1 For ease of exposition, we use the term GSE to refer only to Fannie Mae and Freddie Mac. Our comments do not include references to the Federal Home Loan Banks, which are another form of GSE.
    Until recently, the risks associated with these two lines of business were distinctly different. Securitization primarily exposed the GSEs to credit risk, i.e., the risk that the loans default. Since their securities are sold into the capital market, investors—as opposed to the GSEs–assume the “interest rate” risk. Traditionally, the investment side of the GSEs’ businesses mainly exposed them to interest rate risk. Since Fannie Mae and Freddie Mac primarily invested in their own securities, no additional credit risk was involved. However, this situation changed.
    in recent years as both GSEs began to invest heavily in “private label” securities, which are typically not insured.”

    Now — you just have to figure out what role Fannie/Freddie played in your mortgage loan (HA HA). And, in such a large portfolio – maybe Fannie/Freddie – in some way – has/had some involvement in your mortgage. But, will tell you this — know of “interceptions” of mortgage loans from Fannie/Freddie path — and bank will tell you — we do not have to “sell” to Fannie/Freddie — Ok — maybe — but then what did you do with the loan????

    And what agreements do Fannie/Freddie have for disposal of non-performing loans?
    Foreclosure attorneys will only tell you — your PAST “possilbe'” creditor – never your CURRENT creditor.

    In addition, lack of transparency by both GSEs and financial institutions has allowed foreclosure parties to conceal all — from you — from court — from judges.

    In judges defense — and I am stretching — there has been no guidance from the US government in the foreclosure mess. The US government is allowing a free-for- all to occur — all in order to “clear the market.” Top officials are to blame.

    We want disclosure, transparency, document trace, valid conveyance, valid affidavits, valid notarization, complete disclosure of status of paid for trusts and tranches, derivative disclosure, distressed debt buyer disclosure, completely indorsed notes, valid assignments – etc. etc.

    None of this is happening — and it is anyone’s guess as to WHO currently owns your mortgage loan collection rights. Foreclosure auction only provides a profit to THAT party that currently owns collection rights.

    Do not think we will get any clear answers until those in top positions are replaced. However, we can continue to demonstrate that NOTHING adds up — NOTHING was done right — Foreclosures are fraudulent – and SECURITIZATIONS are/were fraudulent.

    Judges are beginning to get the picture — but too little and too late — for many.

    A mess — and we will not be the scapegoat of the mess..

  19. Does anyone know what the significance is of these trusts 15-15D Certification and Notice of Termination of Registration under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports under Sections 13 and 15(d) of the Securities Exchange Act of 1934?

    They file the 15D forms and then assign notes/mortgages into these trust 3-4 years later?

  20. Dny, I’m with you. Fannie probably says my note isn’t in a trust because they repurchased it from the trust, making Fannie a non-holder in due course by virtue of the fact that such a repurchase would necessarily be with “notice of being overdue,” thus negating Fannie’s claims to being holder in due course.

  21. Unfortunately, Fannie is in on the scam and does not want to be discovered as in on the scam. It needs to come out, so we can fix it. This mortgage mess cannot remain like this. We need a moratorium on foreclosures so the market can recover. The houses are going down the tubes in value very fast now. Most of the loss of value has happened in the last six months. It is getting worse. This affects everyone not just the people in foreclosures.

  22. Bob G: the 10-K you refer to – do you think that refers to Fannie “purchasing loans” “in the secondary market” (per MSM mythology – I don’t) or “purchasing” non-performing loans out of MBS pools? I see no obligation for Fannie to purchase loans out of pools, though they might be doing so, and if they were, they could not be holder in due course of those loans. Also begs question, what did Fannie pay for them?

  23. Bob G: in your referenced link, seems to be there on front page under “GROWTH LIMIT” also may be found in the stip in Article III, section 4 under “Fannie Mae shall not increase its “mortgage portfolio” assets as shown in the minimum capital report to OFHEO for December 31, 2005, except as provided in the following…”

    So, IMHO, Fannie was only a securitizer participant after the stip. I’m not an attorney, so check this out for yourselves, folks.

  24. dny

    here’s the 2006 agreement. it’s meaningless.

  25. Bob G–yes, that’s what Fannie SAYS…what Fannie DOES is probably something else entirely, especially in light of revelations that Countrywide didn’t transfer the notes…

  26. Fannie owns some of the loans and issues its own MBS backed by those loans. In other cases it acts as a trustee for MBS pools, or so it looks like to me.

  27. FWIW, my BK attorney listed my mortgage as unsecured as part of my Chapter 7. Anyone else try this and if so, with what results?

  28. All I know is, I asked Fannie to produce the note, and they sent me a printout of some “investor reporting” software that contains errors instead. Fannie doesn’t own my loan.

    Fannie also said my note isn’t in a trust. Fannie said it sees no conflict between an assignment to BAC which declares BAC owns the note and Fannie’s claim to own the note. Say what? How does an assignment to BAC mean that Fannie holds my note? Simple answer–it means Fannie doesn’t hold/own my note.

    One more thing–Fannie says on its own website that the loans in the pools are NOT Fannie assets, I.e., Fannie doesn’t own them. Fannie
    gave a pool number for my loan, ergo, Fannie doesn’t own my note.

    Thanks for the SEC ruling, dny…I’ll look into it…

  29. The Fannie Mae Loan Lookup enables mortgage borrowers to quickly determine if Fannie Mae owns their loan by providing a street address, unit, city, state, and ZIP code.

    Typed in my address…Fannie Mae…CLAIMS ” it owns the loan” for my address. such misrepresentation and bunk.

    Match Found.
    Based on the property information entered, it appears Fannie Mae owns a loan at this address.

    A “Match Found” status does not guarantee or imply that you will qualify for a Making Home Affordable refinance or modification.

    If you’re interested in a refinance, please contact your mortgage lender or servicer (the organization to whom you make your monthly mortgage payments) to confirm these results and ask about the Home Affordable Refinance Plus program.

    You can find more information at

    View Frequently Asked Questions for this Loan Lookup tool.

    Thank you for contacting Fannie Mae.

  30. dny

    something must have changed. i just reread Fannie’s 10-K. They claim that they’ve purchased hundreds of billions of dollars worth of mortgage loans in 2009.

    can u provide us with a link to your cite source re the 2006 SEC agreement?


  31. Brings to mind a phrase someone used I forget who….went something like this ” they passed the instrument around like a rugby ball at an International match” they did this behind the mers screen,

  32. BofA or BAC Home Loans Service, LP is the loan servicer for a cliamed Fannie Mae owned loan per RESPA QWR responses. Fannie Mae has failed to repsond to four RESPA QWr’s sent over the past two years.

    BAC, LP has gone so far as to hire a law office to answer our RESPA QWR’s and they have even contridicted themselves on who claims ownership?

    BofA and Fannie are sneaky

  33. dny

    ok, fair enough. let’s find out for sure.

  34. Neil and others:

    See Whitestone Svgs & Loan v. Allstate Insur. Co., 28 NY2d 331 (1971), at the following link:

    This case by the NY Court of Appeals really needs to be dissected and studied closely. This is a 1971 case, that has not been cited to any extent by any other court. Its holding was issued prior to the securitization fiasco, so there was no consideration of MBS in the decision.

    Nevertheless, it is NY law, the law most securitizations claim is governing in their docs. If you want your Answer to survive a motion to dismiss, and want to get discovery and evidence, I really think that you need to plead this case. If you can plead collateral source of payment via UCC 3-603 or otherwise, this may give you a leg up in the litigation.

  35. Bob G: I will respectfully disagree with your statement, “[Fannie] can own the loans and do in fact own them.”

    Fannie can say whatever it wants. However, as part of Fannie’s May 2006 settlement agreement with the SEC, (look it up) Fannie was barred from buying and holding loans in its own investment portfolio. I think that Fannie thinks of itself as a “Trustee” or “Master Servicer” for pooled loans underlying MBS issuances. But exactly WHO is the loan “owner?” – Same game as Wall Street, only zero oversight, zero accountability. I don’t think Fannie actually “owns” any loans (originated since May 2006) in its own name, nor can they per the settlement agreement.

    Note that Fannie’s website (raising the question of an additional claimant on a loan), states, “It APPEARS that Fannie Mae owns a loan…” This is not a conclusive statement and I think it is weasily legalese. Of course, IMHO, the “servicer” doesn’t own the “Fannie” loan either.

    And then we have US Congresswoman Kaptur, when rightly going after MERS, drafting legislation that would DEMAND that Fannie, Freddie, Ginnie simply assign those GSE-related loans to the “servicer,” like that will really “fix” things!!!

    I thank Neil for commenting on this topic. As far as I am concerned, the GSE’s are a complete unknown, since they seem to have been exempted from SEC disclosure rules years back. The GSE’s are about as transparent as coal.

  36. Incidentally, Fannie Mae requires that their retained attorneys go after the borrowers for their fees in the event of bankruptcy petition.

    I’m not sure Fannie’s chartered mission is accurate – they are “helping” people become homeless.

  37. Neil

    Good post.

    Check out Fannie’s latest 10-K at

    See pages 8, 16-25.

    Fannie buys or guarantees pools of mortgages from originators such as WF, BAC, etc. Fannie also issues its own MBS based on these loans in its portfolios. Whereas Fannie doesn’t provide origination funds for the mortgage loans, it does buy them in the secondary markets from the big originators. In 2009, BAC and WF provided 20% of Fannie’s book of business.

    So they can own the loans and do in fact own them. They just didn’t originate them. Problem is, BAC and WF et al are claiming that they are the owner or holder of the notes, and even though Fannie shows the loan as owned by it on its own website, the courts are saying “tough. u borrowed the $$$, and you didn’t pay on the note. judgment for plaintiff.”

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