MBS Investors in Revolt: Ultimatums to US Bank and Wells Fargo


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EDITOR’S ANALYSIS: For those who have followed this Blog for any length of time, this news will come as no surprise. Ultimately, the proof and the relief sought by homeowners will come from investors who demand answers to what happened to their money when they purchased mortgage backed securities and pooled their money to fund mortgages.

The result is a pincer action, to put it military terms, where the creditors and the debtors are making the same allegations against the intermediaries who stole from both sides, “borrowed” the loss to claim Federal bailout money, and left both sides holding the bag.

Lawyers for the investors are clearly smelling blood and are on the hunt. Unlike the foreclosure defense side where the arguments and theories are the same, these lawyers will represent institutional investors whose credibility in court will rival, if not exceed, the credibility normally allowed to anyone with the word “Bank” in their name. These lawyers are going to make a fortune, as will any foreclosure defense lawyer who realizes the true nature of what is going on.

What they already know and they are demanding answers: that the mortgage origination process was defective in multiple ways that created fatal defects in the the quality and quantity of loans as well as the security of the collateral (the homes). The proof that will emerge is that the homes were not subject to a perfected lien because the intermediaries wanted to claim the loans themselves to create “trading profits” before they provided for any accounting to the investors and with no intention of ever providing an accounting to the borrower.

The document trail from the closing with investors, the document trail from the closing with borrowers, the actual money trail and the representations made in court are all at variance with each other. “Transfers” to the pool occurred only after the alleged default by the borrower, which was misrepresented because the default claimed did not match the actual receipt of funds that should have been reported to investors. All of this is in direct violation of the PSA and other securitization documents.

The final result will be the investors disavowing any interest in the loans, absent a broad settlement that allows for modifications of the mortgages based upon realistic values and terms. The investors will see, that the deep pockets here for recovery of their losses are where the money went in the first place — the investment banks.

The money advanced by investors was not used to fund mortgages as advertised but rather was sponged into a complex matrix of fees, trading profits for the investment banks, credit enhancements that inured to the benefit of the banks, and bets that the bonds would fail — a sure thing because the banks reserved the right exclusively to declare the failure.

All of this projects broad similar actions from investors around the world demanding answers on each and every pool. All loans will be thrown into a grey area of ownership and the end result may well be that the “free house” spin by the Banks will come back and bite them. With the creditors disavowing the transaction and making no claim against the homeowners there might be nobody to pay. Short of that, the proof will most likely provide a relatively easy way for homeowners to strip their homes of the liens of record as they relate to loans in which a securitization claim is present — because in most cases, the loan was not made or paid for by the originator who appears on the note and mortgage.

TILA rescission is most probably going to get much easier as a result of these actions. Meanwhile US Bank and Wells Fargo are going to experience the frustration that they have caused homeowners. Their attempts at foreclosure are going to met with stiff resistance as the investors emerge and have their say in foreclosure actions.

HSBC and US Bank to Investigate Ineligible Mortgages in Over $19 Billion of Wells Fargo-Issued RMBS

(Source: Gibbs & Bruns, LLP) – HOUSTON, Jan. 5, 2012 – Gibbs & Bruns LLP announced today that its clients have issued instructions to US Bank and HSBC, as Trustees, to open investigations of ineligible mortgages in pools securing over $19 billion of Residential Mortgage Backed Securities (RMBS) issued by various affiliates of Wells Fargo.  Collectively, Gibbs & Bruns’ clients hold over 25% of the Voting Rights in 48 Trusts that issued these RMBS.

“Our clients continue to seek a comprehensive solution to the problems of ineligible mortgages in RMBS pools and deficient servicing of those loans.  Today’s action is another step toward achieving that goal,” said Kathy D. Patrick of Gibbs & Bruns LLP, lead counsel for the Holders.

The Holders anticipate that they may provide additional instructions to Trustees, as needed, to further the investigations.  The securities that are the subject of these instruction letters include:

WFALT 2005-1 WFMBS 2005-9 WFMBS 2006-19 WFMBS 2007-13
WFALT 2007-PA2 WFMBS 2005-AR11 WFMBS 2006-20 WFMBS 2007-8
WFALT 2007-PA3 WFMBS 2005-AR12 WFMBS 2006-6 WFMBS 2007-9
WFALT 2007-PA4 WFMBS 2005-AR14 WFMBS 2006-7 WFMBS 2007-AR3
WFALT 2007-PA6 WFMBS 2005-AR16 WFMBS 2006-8 WFMBS 2007-AR8
WFHET 2005-3 WFMBS 2005-AR3 WFMBS 2006-AR10 WMLT 2005-A
WFHET 2006-3 WFMBS 2005-AR5 WFMBS 2006-AR13 WMLT 2005-B
WFHET 2007-1 WFMBS 2005-AR8 WFMBS 2006-AR14 WMLT 2006-A
WFMBS 2005-12 WFMBS 2005-AR9 WFMBS 2006-AR18 WMLT 2006-ALT1
WFMBS 2005-17 WFMBS 2006-11 WFMBS 2006-AR2
WFMBS 2005-18 WFMBS 2006-13 WFMBS 2006-AR4
WFMBS 2005-3 WFMBS 2006-14 WFMBS 2006-AR8
WFMBS 2005-4 WFMBS 2006-17 WFMBS 2007-10

Gibbs & Bruns is a leading boutique law firm engaging in high-stakes business and commercial litigation.  The firm is renowned for its representation of both plaintiffs and defendants in complex matters, including significant securities and institutional investor litigation, director and officer liability, contract disputes, fraud and fiduciary claims, energy, oil and gas litigation, construction litigation, insurance litigation, trust & estate litigation, antitrust litigation, legal and professional malpractice, and partnership disputes. Gibbs & Bruns is routinely recognized as a top commercial litigation firm in the US.  For more information, visit www.gibbsbruns.com.

Source: Gibbs & Bruns, LLP


101 Responses

  1. WFMBS 2007-11
    Loan Refinanced with Wells Fargo with Stated Inflated Income. Now Im 3 months behind Wells Fargo the Master Servicer Denies Permanent Loan Mod due to Investor Guidlines. I read the PSA and it states ok to modify if in Default due to income loss its for the best Interest of the trust! What can I do.

  2. […] Wall Street and the banks, in their greedy quest for wealth, opted to not follow their own documents.  They got sloppy and never bothered to actually transfer the Notes into the REMICs.  This is why you are seeing lawsuits such as the FHFA’s[1] suing banks (Click here for listing and details)  and investors suing for the “empty REMIC” trusts (google “investors suing for empty trusts” and read) – here is one quick recap by Paula Rush[2] called “Investors Sue” and another over at Livinglies called “MBS Investors in Revolt: Ultimatums to US Bank and Wells Fargo”. […]

  3. I have another question. I check with my town and the only thing register is when we first got the house.Our refinance is not register.It was Resgister only threw MERS.Dose a refinance have to be register with the town.

    I have another guestion.Do you think banks would make deal that you sign over your home they want to forclose on and give you a finance for another home in another state that cheaper then your first home.

  4. JG

    look at old American Home Mortgage bankruptcy and prior activities

  5. @smurf absolutely—the foreclosures are defective so they want you to sign away your interest under false pretenses –you waive–they then can avoid title insurance issues–buyers with any sense will not touch a foreclosure

  6. Question Do they need our signiture to do anything with our mortgage.Is that why they are trying to get people to do a short sale.

  7. @dcb – if you came up with a situation where this happened, I could at least study it. In the meantime, CA homeowners:

    2940. A certificate of the discharge of a mortgage, and the proof or acknowledgment thereof, must be recorded in the office of the county recorder in which the mortgage is recorded.

    2941.(a) Within 30 days after any mortgage has been satisfied, the mortgagee or the assignee of the mortgagee shall execute a certificate of the discharge thereof, as provided in Section 2939, and shall record or cause to be recorded, except as provided in subdivision (c), in the office of the county recorder in which the mortgage is recorded. The mortgagee shall then deliver, upon the written request of the mortgagor or the mortgagor’s heirs, successors, or assignees, as the case may be, the original note and mortgage to the person making the request.
    (b) (1) When the obligation secured by any deed of trust has been satisfied, the beneficiary or theassignee of the beneficiary shall execute and deliver to the trustee the original note, deed of trust,request for a full reconveyance, and other documents as may be necessary to reconvey, or cause to be reconveyed, the deed of trust.

    (A) The trustee shall execute the full reconveyance and shall record or cause it to be recorded,except as provided in subdivision (c), in the office of the county recorder in which the deed of trustis recorded within 21 calendar days after receipt by the trustee of the original note, deed of trust,request for a full reconveyance, the fee that may be charged pursuant to subdivision (e), recorder’sfees, and other documents as may be necessary to reconvey, or cause to be reconveyed, the deed of trust.
    This is part of a document at scribd. I don’t know who wrote it.
    Here’s all of it:


    I am posting this here because if a loan is in fact expensed or paid off, like it or not, the party who owned the note has a statutory obligation to record the appropriate document. It’s logical that the party should, but here are the laws which say they must.

  8. @ JG
    Sorry im a bit tited and its complex. but yes, if you are aghast you got it.

    Yes the failed trusts–not news to anybody since it was part of the scam—missing loan lists—-common for certain subprime independent originator-securitizers.

    the bk trustee does two things that are sort of incompatible—one he lets mbs holders continue to receive income streams from current payers

    and two–he cuts off duties of servicer arm of bankrupt to make the advances on default loans–

    that creates a valuable asset for the estate –something to sell to give money to big banks–the naked collection rights–that used to be part of the [never really effective] psa–conundrums

    outside vulture hedge funds move in and buy the naked collection rights that maybe never really existed because psa never was effective

    the vultures collect everything once acct goes to default–trust and ct abandons to this outfit that really is a stranger to the whole deal

    the there is nothing left for the defaulted promissory notes but the collection process —nobody involved but the collection agency collecting on phony rights and the hapless homeowner

    this is why i say law of escheat kicks in vis the promissory notes–the bkruptcy ct cant create rights and sell them–but that was the effect

    the abandonment by the ct and/or the trust–upon default –creates a right of escheat—forfeiture not allowed to benefit the stranger–if bk ct did create rights it did so w/o actual knowledge the trusts had failed

    so although we suspect ct knew –certainly creditor committee knew—the record does not reflect it and the abandonment is arguably wrong? in cases where something was abandoned or lost by error it falls by escheat to the state

    i do not know how to unravel this pile of frauds and mistakes based on frauds any other way–it is what happens in case of doubt over ownership –the king wins

  9. @dee – I guess it’s noteworthy that the court in TX ruled MERS can’t assign notes. But it isn’t anything new – other courts have ruled that way, too (because of course “MERS” can’t). It’s good news for people in that court’s jurisdiction, I guess. Maybe you’re one of those people?
    I think it was that case where the court made the (unsolicited) comment that the note was or would’ve been transferred after it was delinquent, which I took as a hint to the borrower that the holder was not a holder in due course whatever that fact might be worth.

    Holy crap, batman, what a racket. So and so expenses notes it may or may not have had a right to expense and then the shell-company “MERS” sells them OR someone else the use of its name to do self-assignments of the deeds of trust so they can go after the real estate which has no debt on it. This is so horrifying to me, I almost hope we’ve got it wrong.
    How do we know the banksters don’t do a combination write-off and sale of the defaulted debt, btw? But, if they did, the debt collector could only get the amt it agreed to pay and had actually paid. I’ve been trying to make this distinction clear about notes, at least my understanding of them: if I agree to pay you 20k for a 100k note and pay you the 20k, I guess I can go after the 100k. But, if I agree to pay you 20k for a 100k note and I have only paid you 1k of that 20k, I can only go after the 1k, the amt I have actually paid. If anyone knows I have this wrong, now would be a good time to say so.

  10. @dcb – yikes! You’re right up there on the ‘mouthful’ and ‘brain-teasor’ scale yourelf. Had to really try hard to follow you and still not sure…. But, Bk trustees get paid a percentage on what they collect for the estate. So it stands to reason to me that they would only relinquish an asset (no, not asset, can’t be?) if there were no legal recovery available. Do you really mean what I think you said? There is no legit recovery available, but bottom – feeders manage to pick them up and try anyway? I guess no crime by the bk trustee if he abandons these claims (IF no recovery is truly legitimately possible), but mustn’t he participate somehow, beyond his abandonment, for those bottom-feeders to pick them up? Maybe it’s Hoyle, but looks generally like a hot-bed for collusion of some kind, never minding the horror of the rest of it. That’s if I followed anything you said because it’s all news to me. and, joann, I hope you will keep after it.

  11. “On January 1, 2010, Fannie Mae adopted new accounting standards for transfers of financial assets and the consolidation of variable interest entities – SFAS 166 and SFAS 167.

    **As a result, the cost of purchasing most delinquent loans from MBS and holding them in portfolio will be less than the cost of advancing delinquent payments to security holders. ** ”

    FNMA said (earlier in the post this quote is from) it had the option to purchase delinquent loans from trusts.
    Well, since the right to purchase a delinquent account is not generally seen as a ‘privilege’ (unless it’s at a steep discount) – it’s more of a liability – this is a clue to fnma (et al’s) guarantees. They are saying purchasing these delinquent loans is more cost-effective than keeping up with *advances* to “security holders”. Now the word ‘advance’ is interesting, because it implies reimbursement.

  12. @JOANN

    Wow thats a mouthfull–and brainteaser–ill simplfy what I have distilled from what little iv actually seen which is lots less than most–

    The banks or the flyby nite originators often used the off balance sheet stuff to avoid capital requirenments etc–enhance reported returns—lots shuffed under the rug when accts quit looking at it because its supposedly no longer an item on the ledger

    but those that failed to make the intercompany or intracompany sales, the deposits –and that failed to follow the UCC article 9 on establishing a lien on the assets for the trust—–neither the securities nor the promissory notes left the balance sheet of the originator-securitizer———although they ignored those accts in reporting and the accountants should be sued by all———-then the originators go bankrupt—so the trustee in bankruptcy gathers up assets and asks people to make claims for debt—-the mbs holders dont realize the mbs are really unsecured debt–no claims–besides they would rather be secured creditors till they see the crap

    so the bankruptcy trustee asks the creditors [bigbanks] committee “what the heck do i do with these failed off balance sheet deals?” the creditors say “lets just pretend they were real sales etc–and pretend they were secured” —so judge just abandon those assets to the trusts and the PSA–then the ct releases the servicer arm of liability for duties like paying the MBS holders if the loans go into default—-a new serviicer comes along smells the rose—- and buys these collection rights tosses away the psa and goes gungho on collecting—–and you have the situation where you have servicers that have no duties–just rights to seize and liquidate assets [homes] for their exckusive benefit

    dont believe the crap about owners not consenting to mods—its the collection agencies view its their assets exclusively

  13. @JG re leases and other off balance sheet stuff–as you noted it can occur by equity acctg —–but usually had to be disclosed in footnotes—-when i was doing M&A —id have to take the reported financial balance sheet and gross up all the netted asts and debts to get a proper picture–examples today include certain types of leases–operating vs financial—-and what else–im old and cold on—-but an item that is commonly netted is accounts receivable sold to banks as well as some inventory financing–buy-sells–im sure there is a long list—patents come to mind–lots use it–banks abuse it–bewar retail investors when you sign onto your ira accts and buy stoks–assuming you havent already had it stolen by the corzinni syndicate

    i shudder at the dark pools and offshore hedge funds–pirates

  14. @DCB
    “I believe the off-balance sheet treatment has been halted by FAS 166”

    Just trying to understand things. Think this all relates to qualified and non-qualified contracts and it went over my head when this got discussed previously (was trying to translate indymac, onewest and deutche bank to wamu chase us bank) but I am getting there…this is not directly related to that or perhaps it is but my interest is ownership and value (how much is owed who and who gets to foreclose) right now….

    After the bogus assignment “For Value Received” by the servicer who has no beneficial interest to the trust (and why this fraudulent not-really-a-sale-transfer bypassing sales that supposedly already occurred had to be done at all…when simple recording of assignments from originator to depositor to trust is all that is needed to satisfy state statutes for non- judicial foreclosure and UCC…why indeed is the key) – the foreclosure then proceeds in the name of the trust as beneficiary (thinking the fraud assignment actually cancels their interest and maybe they don’t care because they already released their interest..) but moving on…

    FASB “Summary of Statement No. 166” says among other things:

    “This Statement requires that a transferor recognize and initially measure at fair value all assets obtained (including a transferor’s beneficial interest) and liabilities incurred as a result of a transfer of financial assets accounted for as a sale.”

    Chase says one thing to homeowners and courts when it comes to foreclosures and then turns around and says another thing to Deutsche Bank in lawsuit regarding its “ownership” (and liability):

    “Under the plain terms of that agreement, JPMC did not become WMB’s successor in interest. Since its closure, the FDIC as receiver has controlled WMB. While JPMC purchased all of the assets of WMB, it assumed only specified liabilities: those that had been reduced to a dollar amount on WMB’s “general ledger and subsidiary ledgers and supporting schedules which support the general ledger balances”

    Then there is this in the FDIC PART 360—RESOLUTION AND RECEIVERSHIP RULES in the section “360.6 Treatment of financial assets transferred in connection with a securitization or participation”:

    “(4) The transfer was made for adequate consideration;
    (5) The transfer and/or security interest was properly perfected under the UCC or applicable state law;
    (6) The transfer and duties of the sponsor as transferor must be evidenced in a separate agreement from its duties, if any, as servicer, custodian, paying agent, credit support provider or in any capacity other than the transferor; and…”

  15. Ok JG re “off balance sheet” debt–i believe you can explain it better tan I but you are being kind and telling me to simplfy —

    Ok people here goes; Companies for many years worked hard to finance assets with debt that would not be reflected on their balance sheets–financial statements. There are often loan covenants for unsecured bonds etc that prohibit debt ratios [to equity] . The companies did not want to trigger these and create events of default–which would be like you not paying your re taxes on a house –although you paid the pmts.

    The other financial ratios can also be skewed by offbalance sheet debt. Say that you have an asset that is 100% financed without recourse to you the borrower—it nets out on the balance sheet–the debt is equal to the asset so the accts said –just leave that deal off both sides of the ledger ——the only thing that remains in the financials is the income stream from that “off balance sheet” transaction. So lets say I had a billion dollar offshore oil platform financed that way–non-recourse off balance sheet–i get to include the income but not the asset or liability—-if the project works profitably my income statement will give me huge income on a small apparent asset base–so return on assets is great

    The banks picked up on this and set up these purported trusts—they stuffed promissory notes into the trust and sold their own named securities [mbs] on a non-recourse basis—provided they did not cheat on the representations and warranties—in which case the debt and assets move back to the lender balance sheet–usually more liability than assrts—losses——capital devouring assets—banks undercapitalized etc—

    bottom line the whole scheme was initially devised to allow off balance sheet manipulation of income statements that understated the bank exposure–so the bank investors themselves should be suing as well as the mbs holders

    im a finance guy–tax atty so i know all this is complex and manipulative—–the acctg board and IRC encouraged it—-it went out of control–it should have been expected–i believe it was expected based on seminar info iv seen from 2004-5 —-how to profit from distressed debt and assets before there were any

    and is it likely that alan greenspan had no idea that the wheels would fall off the wagon—- if his bank-board of directors raised interest rates after pushing ARMs like crazy? apparently he could not read stats and slept at the reserve mtgs–and they want us all to work till we are that old–im kidding –any 78 yr old should catch that one

  16. @ian—just look up far debt collection procedures act—there are state consumer protection laws that are both wider and narrower

    there is a list of things that are prohibited–last time i walked down while looking soley at the assignment of mortgage stuff–i counted maybe 4 items—–creating appearance something done by an atty–look up ron meharg——–appearance of govt action—wow think about what happenms with the fake assignment–filed with county recorder–stamped [appearance of govt action/] then attached to a complaint [appearance again] then served by a sheriff [appearance] –on and on–filings in sec that arent—filings in state ag that arent

    sorry it keeps bugging me that nobody at sec cares cared about that missing largest piece of the file –the loan schedule–but that early event needs to be tied to collection now–so the reason for failure to file and impact tofday converges on fdcpa

  17. I went to wikipedia: Maybe dcb will put it in context – in one syllable words!.

    “Off-balance sheet (OBS) usually means an asset or debt or financing activity not on the company’s balance sheet.

    Some companies may have significant amounts of off-balance sheet assets and liabilities. For example, financial institutions often offer asset management or brokerage services to their clients. The assets in question (often securities) usually belong to the individual clients directly or in trust, while the company may provide management, depository or other services to the client. The company itself has no direct claim to the assets, and usually has some basic fiduciary duties with respect to the client. Financial institutions may report off-balance sheet items in their accounting statements formally, and may also refer to “assets under management,” a figure that may include on and off-balance sheet items.

    Under current accounting rules both in the United States (US GAAP) and internationally (IFRS), operating leases are off-balance-sheet financing. Financial obligations of unconsolidated subsidiaries (because they are not wholly owned by the parent) may also be off-balance sheet. Such obligations were part of the accounting fraud at Enron.

    The formal accounting distinction between on and off-balance sheet items can be quite detailed and will depend to some degree on management judgments, but in general terms, an item should appear on the company’s balance sheet if it is an asset or liability that the company owns or is legally responsible for; uncertain assets or liabilities must also meet tests of being probable, measurable and meaningful. For example, a company that is being sued for damages would not include the potential legal liability on its balance sheet until a legal judgment against it is likely and the amount of the judgment can be estimated; if the amount at risk is small, it may not appear on the company’s accounts until a judgment is rendered.

    Contents [hide]
    1 Confusion between on- and off-balance sheet
    2 The Banking Example
    3 References
    4 External References

    Confusion between on- and off-balance sheet

    Traditionally, banks lend to borrowers under tight lending standards, keep loans on their balance sheets and retain credit risk—the risk that borrowers will default (be unable to repay interest and principal as specified in the loan contract). In contrast, securitization enables banks to remove loans from balance sheets and transfer the credit risk associated with those loans. Therefore, two types of items are of interest: on-balance sheet and off-balance sheet. The former is represented by traditional loans, since banks indicate loans on the asset side of their balance sheets. However, securitized loans are represented off the balance sheet, because securitization involves selling the loans to a third party (the loan originator and the borrower being the first two parties). Banks disclose details of securitized assets only in notes to their financial statements. [1]

    The Banking Example
    A bank may have substantial sums in off-balance sheet accounts, and the distinction between these accounts may not seem obvious. For example, when a bank has a customer who deposits $1 million in a regular bank deposit account, the bank has a $1 million liability. If the customer chooses to transfer the deposit to a money market mutual fund account sponsored by the same bank, the $1 million would not be a liability of the bank, but an amount held in trust for the client (formally as shares or units in a form of collective fund). If the funds are used to purchase stock, the stock is similarly not owned by the bank, and do not appear as an asset or liability of the bank. If the client subsequently sells the stock and deposits the proceeds in a regular bank account, these would now again appear as a liability of the bank.

    As an example UBS has CHF 60,316 Million Undrawn irrevocable credit facilities off its balance sheet in 2008 (USD 60.37 Billion.) [2]

    Citibank has USD $960 Billion in off-balance sheet assets in 2010, which amounts to 6% of the GDP of the United States.[3]

    [edit] References1.^ 2009 Poramapojn Dissertation
    2.^ UBS 2008 Annual Report
    3.^ Pandit Speaks, Fox Business
    [edit] External ReferencesOff-Balance-Sheet Entities: The Good, The Bad And The Ugly – Investopedia
    Risk Glossary explanation
    Retrieved from “http://en.wikipedia.org/w/index.php?title=Off-balance-sheet&oldid=469493512”

  18. @dcb – I don’t understand statements like “off balance sheets”. can you explain in words of one sylable what that means or point me and others to something similarly with words of one syllable? thanks

  19. dee – I don’t see anything distinctive about that case. Some of it is peculiar to TX law. I know next to nada about TX state law, x from cases I read years back. TX was at least at one time pretty protective of its citizens and their homes.
    If it were up to this judge to hear the idiotic question posed just now in MA and AZ (can a deed of trust be enforced without interest in the note – gag, etc. – unbelieveable), the answer would be a resounding NO. TX is a title-theory state ftr. I swear these guys just use a particular case to see what will fly for later reliance in other cases.

    I will say I thought the court ‘s reasoning tripped over itself, but that’s not even unusual these days. And I will also opine the Judge got it wrong when he said a ‘nominee’ as opposed to an agent may do certain things in regard to real property. Later on that one. **

    The judge believes a lien follows a note, ala Carpenter. Okay, take 10, a lien (mortgage) might, but not a deed of trust. Until courts recognize the significant legal distinctions between mortgages and deeds of trust, they’re not going to get this. The dot is itself a weird creature, but it’s what was created to implement non-judicial foreclosure for lenders whining about judicial foreclosure. The privilege, and that’s what it is – a privilege – of non-judicial f/c has been abused, and that’s kind, majorly, hugely kind.
    The Judge says notes and dot’s can’t be separated, with which I beg to differ and I have some case law somewhere which recognizes this if I didn’t lose it.* In fact, I believe they have been bifurcated with the use of MERS, and that’s a reckoning no one in power or in the judiciary wants to have or see. Looking at it objectively, we’d have to concede that’d be a heck of a mess, but, a mess where imo if the law is followed, homeowners win….accross the board.
    Attorneys Treva Hearne and her partner, Mr. Hager, (who is co-counsel on a case recently posted here, fought the good fight for a very, very long time on bifurcation and ultimately were denied the ruling I thought they had coming. I lost track of that mdl a long time ago, so can’t rattle off their particular arguments or even the court’s justification for the ruling against bifurcation. Obviously, the ruling sought would have had monster, unprecedented consequences (unprecedented consequences if we all just overlook the TARP, etc. gimme funds).
    * Never mind MERS for a minute. I loaned Sam 100k and got a note and dot on his property from him. Later, I need to wrestle up some cash, so I get Tom, a co-worker, to loan me 50k and I assign him Sam’s deed of trust, but nothing else. I own the note and Tom has the deed of trust. How is this not bifurcation? The bifurcation was deliberate, or even if not, it was done. So what? I still have the note and Tom still has the deed of trust. They are bifurcated. Neither one of us can independently come after Sam’s property if he defaults on the note. (and Restatement blah blah says they may not be re-joined, doesn’t it?) I can still sue on the note as an unsecured debt, but Tom would be sol. He might be able to come after me, but that itself does NOT create rights in the note or even the property. He has no path to Sam or his home. Tom might get a court to grant him some equitable relief out of me (but not Sam), but that’s it.

    I think the “MERS” dot is unenforceable in the first place because it doesn’t meet statutory or contractual isms by its very language imo. It’s a weird piece of dog-doobage. This is theory 1.
    Throw out the other adjectives, and MERS is the beneficiary, right? What MERS et al may have intended – hard to say with those guys, might have been their own deliberate mess to cause confusion – and what got stated are two different things imo.
    The dot says 1) MERS is the nominee of the lender. It says 2) MERS is the mortgagee (there’s no such thing in a deed of trust – just a beneficiary). It says 3) MERS IS the beneficiary. IF MERS is the beneficiary, the note and dot are in fact bifurcated. This is theory 2, and here’s the “later” on the very legally tweaked and skewed “MERS dot”:


  20. DCB- exactly, the debt collectors are collecting through intimidation and abuse of process. Why is ALL the paper trail forged, backdated, fabricated? Because without that, they don’t have anything. Any good links to FDCPA tutorial, I am in the dark about most of it. Thanks, appreciate all your posts and research.

  21. yeah but, GO BRONCOS! (puhlease tolerate this indulgence)

  22. @JOAN re tax write offs—-if the debt securities were off balance sheet per old FAS and REMICs–then loss occurred to MBS holder if he sold it in the downdraft in 2008–when the vultures were buying at bottom on 15% /$ basis—what you would see today is the vulture selling his 15 % paper for say 30 cents–making big profits–especially if fed steps back in and starts buying at $1–which looks like is the plan for QEIII–it just gets worse

  23. @joann
    ‘who’s books did the assets sit on all these years and for what purpose? ”

    If the originator did not follow the rules to put the notes into a trust which secured the issue of MBS—–then the originator has simply issued unsecured debt securities –ie securities but not mortgage backed——-the promissory notes should have remained on the originators balance sheet as investments—-notes

    the securities as general liabilities—–i believe that FASB 144 and or 166 or soi cover these—similar to IRS REMIC status etc—-if failed then on balance sheet and not just net skim amounts going thru P/L as NG has pointed out –and which I agree

    i believe the off-balance sheet treatment has been halted by FAS 166 or so–somebody here has exact cites on the FASs

  24. AJG and IAN

    perhaps the naming of tf the county prosecutor in a foreclosure is really just one more element of a collection agency’s FDCPA violations added onto false document preparation to induce issue of process etc-if the collection agency is a volunteer because as you correctly point out –no trust–no psa–no legitimate servicng rights–more like the collection agency found a note on the floor and is trying to collect on it by intimidation and abuse of process

    by all these things they reinforce the appearance of right—-misleading appearance–FDCPA????

  25. @johngault

    “Shouldn’t a court, any court, be interested to know if a ‘lender’ has taken a tax write-off on our notes?”

    When it comes to who the borrower owes it ought to matter. Seems like the other side of the question is equally important. Once something is written off no one can pretend they purchased it and collect full value or any value on it can they?

  26. @johngault

    “they must be using double sets of books”

    Wonder how that relates to ownership of mortgages never received by the trusts (“writings” and wet ink documents that evidence ownership of a real asset or interest in a real asset and the exchange of money for the same….intent to transfer the real goods is not the same as transferring the real goods) Anyway -assuming they did pay for them (which they think they did) – paying for something and actually receiving it is two different things and if they paid there is no ownership by the seller either.

    So now there is a late date – bogus for many reasons – transfer….who’s books did the assets sit on all these years and for what purpose? Neil has said trading profits. Are investors on to this yet? Wondering about other reasons. And whose books are they sitting on now?

    I am thinking the reason no one is looking into any of this is still that it is not in anyones interest to do so. The same insitutional funds that were paid by the bs mbs are now being paid by the bs no mbs no worry 10th party debt collectors and probably the default swap traders as well. Is there no way out?

  27. @Ian

    “The persons making tax payments are doing so in order to make it look like they are legitimate lenders or banks, instead of third rate debt collectors.”


    I am supossedly in a trust and have always paid my own property taxes and insurance – there may be different rules in different states or whether it is a purchase or a refinance and who the lender is ect that have to do with whether the owner is required to have an escrow account. I think Fannie Freddie mortgages have to be escrowed for instance.

    The issue with all transactions made by the pretender servicers is they haven’t got any standing to do anything unless they are servicing on behalf of a “lender” – beneficiary….recording their names in ownership docs on title, seizing homes, refinancing or modifying anything – keeping the benefit of payments made….if they no longer service for the trust or never did and never purchased anything for value, they are thieves plain and simple.

    I figure I still have title and the right to live here unitl sold in a legitimate sale (only bare legal title is in the hands of trustee – who is also identified as a debt collector right on the NOD) on deed of trust who is trying to declare a default has occurred to the original defunct lender who sold the loan in full years ago and became a servicer only – and at the same time the successor servicer is assigning “For Value Received” to the trust who purportedly purchased it in full years ago.

    Something makes me think it’s important to pay the taxes and insurance while fighting the nonsence that ought to be obvious to courts. Not that it would matter but can’t help wondering – even in a request for injunctive relief – seems to me the day will come when courts get it – there is no harm to the pretenders who own nothing and have a right to nothing until the real beneficiary stands up if he is not dead (know of at least one case where the judge took that stance relating to tender anyway) – Who’s paying the taxes could make a difference….but what do I know….Just don’t want to do business with the “lender” ever again and sure don’t want him paying my property taxes. That is my relationship as a long-time owner with my county…It’s kind of a stance that I own it – he doesn’t and that I intend to keep living here. Not a strategic default.

  28. @Ian – good point. The thing that comes to mind, tho, is SOMEone owns that note (but heck, I’m not even sure that’s true anymore), at least unless we are able to demonstrate otherwise, including its retirements by any third party payments. That’s why , well one reason, we have a need to know clearance on who the heck owns these notes if a) they made it into a trust or 2) they didn’t. It may be that pretenders are making voluntary real property tax payments (and as such, I argue they are not entitled to reimbursement).

    As to property taxes, I’d have to say it’s best to err on the side of caution and pay your taxes, even if you think a pretender is. I don’t
    ‘go there’ with the king argument exactly. I don’t argue the principals of escheat in general fwiw, but I sure as hey would hate to find out the hard way I’m wrong. I don’t know what ‘statement’ paying your taxes when they are being escrowed but you’re not making payments would be or really how it could be beneficial or even work against you. But, like I said, I would go with paying them myself if I had to make the choice in the dark. I guess my real reason is that if I am saying you’re nobody as to my property, I should be paying my taxes and not give them anything, not even if the law MIGHT hold that the bankster’s tax payments were voluntary and not actionable. It’s a choice one has to make.

  29. Joann said: “If true beneficiary is identified and that beneficiary is paid in full by anyone or he has released the lien

    **and taken a tax write off (can’t take a tax write off and then turn around and sell it too) – there is nothing owed to him anymore and he cannot sell it to anyone else. Would be fraud if he sold it.**

    There is no lien anymore (jg: seems logical if there’s no debt, even tho the rat-b’s aren’t doing the reconveyances to homeowners they should be doing when they take the write-off) So there is a reconveyance as defined in the deed of trust. It is owned free and clear.”

    Turns out there was more to your comment than met at least my eyes first time ’round.

    ** I’ve struggled with that and looked for answers.
    The only ref I have is the one-action rule. Or maybe the answer is found in simple accounting stuff. I don’t know. I have never understood how party A can purport to assign or sell to party B claims party A has written off already. That was an “election of remedies”, and as joann says, there is no longer anything owed to party A for party A to sell.
    If this is going on, and it seems like it probably is, they must be using double sets of books. Only thing I can think.

    The only other thing which comes to mind is that the bankster takes the tax write off in one year and then realizes the bs sale price of the written-off asset in another (or the part of the sales price actually paid by party B). But, I don’t believe any money changes hands when an expensed item is yet sold. I’d bet the farm on this one:
    the debt collector only makes a promise to pay upon recovery, altho there may be a token payment to seal the deal. Fwiw, under the UCC, the debt collector (even if this were legit which it doesn’t appear) may only collect from the borrower the amt he has actually paid. He cannot collect on a note the amt he promised to pay, but has not yet paid. We need to find a way to get to the bottom of this, even if it takes a consortium of attorneys to get discovery in a particular case.
    And when you think about this, isn’t it a reasonable inquiry to a court? Shouldn’t a court, any court, be interested to know if a ‘lender’ has taken a tax write-off on our notes?

  30. Johngault- re: the banks paying property taxes. Someone just the other day brought up the point that, if the “loan” never made it into the trust, then it is not governed by the PSA, and all the conditions of the note ,for instance,paying property taxes, are void and unenforceable. The note, REMIC, etc. is built upon inclusion in a “Trust”. If there is no trust, then what do we have? Not much, it would appear. The persons making tax payments are doing so in order to make it look like they are legitimate lenders or banks, instead of third rate debt collectors.

  31. @ DCB

    I have viewed online some of the BK disposition and the online analysis from the court examiner. So far, I have not been able to find, what may be proprietary information about the insurance, but I will keep at it. My Federal Case is on the docket and I too, need the information. Right now they are trying to rear-end me with a foreclosure hearing in District Court…have filed a restraining order, injunction and Lis Pendens. Pretty Busy with this…trying to stop them and get into Federal Court

  32. “The banks can’t foreclose if you don’t pay your property taxes if they are not included in escrow.” I don’t think that’s true. I think a lender can accelerate a note if taxes aren’t paid because somewhere the borrower says he will pay them. Can’t swear to it without reading stuff I don’t wanna read just now.

  33. I am no where near an expert on TILA claims and rescission. Having said that, I’ll say this: The a.p.r. being off is a friend of yours, and I would bet the farm the a.p.r. is fatally off on a lot of loans, especially subprime loans with teaser rates. The normal ‘tolerance’ for error is I think 1/8 of 1 percent (been awhile). And once a foreclosure action has been initiated, there is cause for rescission I think (this is a disclaimer) when the amt of the amt financed is off by more than 35.00 either way, up or down. It’s higher, like 100.00 or so before f/c is initiated. The amt financed is easy enough to calculate; the a.p.r. takes software or an “HP”-type calculator. Or maybe it can be done on line these days. If someone will post a link to a good faith estimate and a reg Z truth in lending that goes with it, I can take a shot at remembering how to calculate the amt financed and show you.

    As to the three years the bankster fed “bytheway”, don’t think so.
    It’s my lay understanding the clock starts ticking from the time of discovery of the violation. Probably varies, which it really shouldn’t, from one jurisdiction to another. I have some tila case around which I’ll try to locate and link. Have to read case law or scour the rules (or consult an attorney specializing in TILA cases, of course) to know for sure about that three year thing and also the bankster’s apparent refusal to acknowledge the rescission. Something I do recall from reading tila cases in 2008 is that courts take it very seriously when they are apprised each borrower was not provided two copies of the right of rescission at closing (on owner-occupied refinances). So look in your copies of your closing docs. Don’t tell fibs, though! If you do, it will bite you in the heiny when the bankster produces your autograph on your acknowledgement of receipt from closing. Sorry to say I’ve seen that, too.

  34. @johngault


  35. @dee – okay. Just give me your email address.

  36. @CHRIS; This may be very important,

    Im looking for the host process where reside the insurance algorhithms.

    If you have seen older records projecting losses, then it may be solid proof that there was predatory intent at the investment banker level where the structures’ flows were designed to run away from the investors–the govt pension funds.

    It may point to the decision-making occurs with respect to “seize and freeze” casualty insurance fraud. This is criminal. In connection with uncertain rights in the promissory note it seems to grow to a type of money-laundering. Uncertain claimant seizes cash by wire–by mail.

    Did you have to physically review these documents or is it online–i am looking for original evidence of party records –not an interpretation–i need to compare it with other data sources to piece together a more complete puzzle.

    Pls contact me dcbreidenbach@aol.com if you can help me find and examine that evidence –thanks

  37. @johngault

    I really would like to get your thoughts on some documents.

  38. gary h said:

    “Please, please understand that “Certificate HOLDERS to a Security or Securitized Trust” are Not and DO NOT have any propritory interest to any Mortgage Loan. THEY ARE CERTIFICATE HOLDERS ONLY TO AN MBS SECURITY….”

    Okay, mr gh, I will understand what you said. . .and what you are saying is that is the (well, one of the) big lie(s). “The investors got duped” – they don’t own the notes and deeds of trust. So then are the certificates the evidence of collaterized debt obligations? Are the loan docs collateral of any kind to the investors? Is there no recourse for the duped investors as to the notes and dots? I think I get it that they don’t want them with all their attendant ‘headaches’, but that’s not the querry. The querry is do they contractually have recourse on the notes and dots or no? If the loan docs are cdo’s between the depositor or security issuer (is it? got me who) and the investors, then they would, right? Do they iyo on an equitable basis (if they were so inclined, which again, it appears they’re not) have recourse as to the notes and deeds of trust? I’m gonna say you’re gonna say no, based on the comparison to a casino bet, and No-Oil-No-Revenue x the guarantees, as well as the posture of current litigation from these investors. Isn’t their main thrust that the quality of the assets backing their investments was “overstated”?
    If this is true and it’s being related here at LL, then this BIG LIE must be “out”, and now being generally acknowledged? But that begs some other questions, like why the charade on endorsements and assignments? Or is that it’s own answer? I’ve never seen a legitimate, timely endorsement to a trust (has anyone?) and clearly the assignments of the deeds of trust weren’t done, except some rogue ones “in blank” – never have I seen a timely assignment of a deed of trust to a sec’n trust (which is not a MERS’ member), or to its alleged trustee. Was all that jazz just part of the scheme to make investors believe they had interests, rights they didn’t? If so, isn’t this a “big” intent to deceive? (But none of this tells me why TARP was necessary, unless it were to postpone the inevitable, mind-blowing, game-changing discovery of these “practices”?)

    Well, it’s something, alright, if this charade is being acknowleded. In which case, WHO owns the loans? If investors did have any recourse as to the notes and dots interests, it might take court action, and not the kind we’re seeing, to enforce or seek that kind of remedy. And what is the name of the part of the game being played when banksters use sec’n trustees to go after collateral if the investors have no such right, as if doing that will benefit the investors? More trying to delay the inevitable? Get it while you can to keep your balance sheet up?
    Play the odds on getting nailed? Does it benefit the investors, even in some small measure? They get 42 cents of the 100 they invested as compensation or some kind of hush money for the cow dung they were fed? I don’t know, but I’m guessing not. Do you know?

    If it is true investors don’t own the loans, they might have all been paid off by them nonetheless, but not necessarily. Wouldn’t one have to look at the exact language to see what investors were actually paying for? If they only paid for payment streams on an asset and not the asset, then their investments didn’t retire the debt, as much as that pains me. This would also explain how those Wall-Bangers could get insurance on the assets. Why not? They own them, and this looks like a good reason to make the loans in the first place – fees, lots of fees, and then insurance on top of that – damn, assuming arguendo everything “else” were done properly. But, then, does this never end, why aren’t the loans retired by those insurance payouts? Oh, they are. They just forgot to mention those to us and the dot trustees and the judiciary.

  39. @chris thanks

  40. @ DCB

    I am rummaging…cannot find the link, but here is the information. I took notes on the relevant pages. It is 581 pages, by court examiner Michael Missai…from KPMG who worked for and with New Century, allowed the misuse of money, fraud, etc…everything is not relevant, but does point out all the things that were done at New Century. I found it compelling.

    Try this too, if you do not already have it:
    HSBC Bank USA in NY, (Judge J. Schack, he is kicking their asses) as lndenture Trustee for Loan Trust-2007-2, Plaintiff v. Taher, et al

    Also there is more in Delaware court for the 2007 Bankruptcy of New Century, the disposition of the mortgages and many of the nuances of the break down of New century.

    Hope this helps, when I gather more I share.

  41. @chris
    If you check New Century forensic audit…you will find excel sheets with projected defaults, with insurance to cover the potential losses

    do you have a link

  42. @ johngault:

    I have been asking about this insurance for some time. Sold insurance…one must have an “insurable interest” to hold a policy on someone/something. If you check New Century forensic audit…you will find excel sheets with projected defaults, with insurance to cover the potential losses. In fact, they have no rights to those proceeds, as they are originators, not owners/investors of the mortgages. The monies need to be used to pay off-pay down the principles of all of our mortgages. This money has been stolen and acquired by fraud!

    Then you have the “scratch and dent” sales of mortgages, where principles of mortgage/ value were significantly reduced by New Century, the 2007 bankruptcy, 2007 cease and desist orders, trust collapse in 2005-2006, SEC K-8 paperwork, the lenders check used to re-buy stocks in their company instead of funding the mortgage…the list is very long. The paper trail is profound and very, very dirty!

  43. @ian—-you said
    “collection agencies/servicers are attempting to make it look as if they are abiding by their contractual agreements with the trusts”

    i said the paperwork reads that way but in practice they make little apparent effort to “make it look..” the recods dont match——your house may have been seized an liquidated–ie sold cashed out—-and yet it may show up on trust docs as a performing loan–maybe “troubled” status

    may have two accounts in your credit report—one an “open” account performing loan –presumably last reported by trustee[or the servicer???]—as well as a “closed ” account with comment foreclosed —

    sooo your credit report looks like you owe a substantial debt—-on your primary residence perhaps while your second acct for same property gives you a black mark too——–this is not credit slander–its credit assassination

  44. @pat
    you are a holdover non-paying tenant at best–they should be expected sooner or later to put a notice on your door ordering to leave real quickly or police will physically carry you out-[-see keith sadler in ohio] —imagine you were a tenant in an apt house—-would you care about insurance and taxes?

    but you are respnsible under the note–so you have an interst in pmt —-and if you are about to be thrown out by somebody who merely had access to an excell spreadsheet–and some professional forgers

    question now is whether this oufit has a right to have walked into the courtroom—–you would have to lodge some suit to deter eviction rather than waiting for it–mitigate damages to taxpayers value of the home–if they take it –it will be destroyed for salvage–and insurance proceeds—who is your servicer? whose name on the deed?

  45. From a sample certificate (you can find these in any psa):

    “Evidencing a beneficial interest in a trust that owns a pool of assets consisting of, among other things, conventional one- to four family mortgage loans formed by…..(Depositor)……This Certificate is issued by…..(name of trust)…….This Certificate represents ownership of a “regular interest” in a “real estate mortgage investment conduit,” as those terms are defined in Sections 860G and 860D, respectively, of the Internal Revenue Code of 1986, as amended. The issue date of this Certificate is…”

    Investor lawsuits are going after shoddy underwriting. They didn’t get a shoddy product – they got nothing at all – much bigger reason to sue.

    “Evidencing a beneficial interest in a trust that owns a pool of assets”

    Where’s the paper trail and the money trail that evidences their ownership? Their trustee bank has the responsibility to produce this don’t they? Isn’t the trustee bank breaking a whole bunch of rules if it accepts assinment to trust years later from non owner (not depositor) for loans in default “For Value Received” when those funds supposedly paid for that mortgage in full years ago? Doesn’t this fraudulent transfer unermine their interest even further?

  46. @ PETER

    There is no trust in actuality. It is a set of books and records that is loosely accounted for by a rights servicer–ie collection agency—that owes little duty to the bank-trustee. In my humble opinion the bank trustee barely knows which rights servicer controls each trust consisting of some claim to ongoing payments of pools of notes. The dinged ones, often majority, in “default” status —are seized and liquidated into cash soley by dint of SOME of the clauses of the PSA which itself was a fraud on the investors and collateral damage to homeowners and the real estate itself in which all taxpayers in an area have an interest.

    You need to identify the collection agency–all else is just smoke used to confuse everybody. You are dealing with a collection agency that has little contact or relationship with anything like a “bank”–unless its on the OCC ist–then it might be a bad bank—but the unlisted rights servicers are the worst–focused pn predatory loans and trust schemes.

  47. DCB- dynamite post, never mentioned before on LL, can everybody here chew on this info for a bit and expound on it? Makes perfect sense, in that the collection agencies/servicers are attempting to make it look as if they are abiding by their contractual agreements with the trusts, even though the notes have defaulted from the trusts, and are no longer in them, although they were never in the trusts to begin with. So they have no contractual duties, as there is no trust,no psa, no mortgage loan schedule, and no A to B to C to D to E ‘true sales’ of note to establish a BRE (bankruptcy remote entity). This is mandated by NY Trust law. Also watch for similar names, i.e. Encore Credit Corp of California, vs. Encore Credit Corp of Va. (JPM aquisition w/Bear Stearns.

  48. @ALL
    Just to give you an idea of where the money went, who spent it. how they got it, called reconstruction of income –from observation of lavish expenditures, to help you better understand how the schemes worked at a macro-level then its easier to come back down the chain to get to the attempted cash and dash effort that is currently rising to a crest.

    Look for financiers –human beings–or groups of them. Gather the details in a coherent way to support prosecution by govt or class action attys. Figure out who the likely members of the family of actors, how they interconnect to each other.

    Who are the Godfathers of criminal syndicates? There is a shortcut—if only we could get access to the Italian yacht registry.

    see link re owners and their toys, ie lavish spending indicative of unreported income.

  49. @ LOUISE;
    “The reason the taxes, insurance and mortgage are being paid by the servicers is because they have to according to the Master Servicing Agreement and Pooling and Servicing Agreement related to the “alleged” Trust”

    Absolutely that is boiler-plate PSA stuff—all the same because the investment bankers’ lawfirms used common language templates–sometimes you will even see another entitiy’s name in the document where they were sloppy and copied it over without doing a word search to eliminate–or “replace” names. The investment bankers used the same spreadsheets too. So spreadsheet cash flow projections would match law firm boilerplate.

    However the DUTIES you listed were generally dropped if the collection agency bought the servicing “rights” out of a bankrupt servier-originator estate. They just bought the seizure/liquidation rights witout associate duties–this is why they are so predatory. They get the proceeds of seizure/liquidation—they have no duties—or those duties they did bear have been waived by friendly [complicit?] trustees.
    Such trustee-abandoned duties include make up payments etc—-the duty to account for loan activity in the purported trust also apparently waived by some trustees. This is more apparent now under the OCC –you may struggle with your plaintiff trustee to find out who the real servicer is—which is now very important because only 20 odd servicers are listed–but if you try to run the list you will find its not as published–there are more unnnamed [due process] but the trustees are very specific that they know little–go to servicer–if you can figure out which one owns the seizure right. Again i emphasize the worst servicers are not on the list.

  50. @ Gary H
    You are right—–however just to add a bit of clarification, the MBS holders expected that certain rights an protections would be accorded them. They expected that the bigname banks named as TRUTEES would in fact perform as represented in the SEC filings. But for the fly by nite originators that did not happen. The fly by nite did it all–after the investment bankers Lehman Bear-Sterns Goldman skimmed 15-30% of the investors’ money in the syndication process.

    Then the investors got it again when the reincarnated origintors’ collection arms bought the seizure and liquidation “rights” that were set up in the original predatory PSAs. The investors get nothing from defaulted loans–nothing from forclosed homes–nothing from deficiency judgements.

    The homeowners just “get in the way” of these lickety split cash and dash operations. Why the hurry–because this group is soooo bad that they will go under —usually such “burn companies” file bankruptcy and disappear in 3-5 years. They must suck off cash ASAP and get it offshore where the investors homeowners and other victms cannot follow.

  51. The actual name of the trust was Wells Fargo Alternative Loan 2007-PA3 trust. Look up your loan at sec.gov and see if your loan is listed in there.

  52. Louise,

    My loan was transfer again with new loan number 2 years after being in forced default and 3 yrs after Chapter 7. New servicer did not pay taxes or insurance for the last year and finally foreclosed and a credit bid was done for 50% less then my note. US Bank is now claiming to be owner. I am still in the house and fighting back hard. Any thoughts on what to do about property taxes and insurance at this point I sure do not want to name US bank on the Insurance as secured creditor just because they say they are does not mean it is true. If they were they woul dpay the taxes and insurance.

  53. Yes! The trust that claims to hold our loan is in WFALT 2007-PA3 (WFALT 2007-PA3)! Our fraudulant documents and origination paperwork along with recent bogus assignments and a letter claiming that the “investor does not participate in the HAMP program” will be on their way to this firm! Perhaps my investor can tell me whether or not they are receiving our payments!

  54. The reason the taxes, insurance and mortgage are being paid by the servicers is because they have to according to the Master Servicing Agreement and Pooling and Servicing Agreement related to the “alleged” Trust. They also receive funds from Credit Default Swaps, TARP, other bailout funds, insurance (lots of insurance). They get even more money if the house goes to foreclosure. More insurance and FDIC payments, not to mention Private Mortgage Insurance (PMI) payments. To top it all off, they do not own the Note because of warehouse lending and separating the Note and Mortgage because of MERS.

  55. Please, please understand that “Certificate HOLDERS to a Security or Securitized Trust” are Not and DO NOT have any propritory interest to any Mortgage Loan. THEY ARE CERTIFICATE HOLDERS ONLY TO AN MBS SECURITY ONLY AND NOTHING MORE.

    Granted these “investors” have been duped, as have the “borrower”!!!

    Said “investors” are pension and retirement funds…..each of which knew of the of the risk involved. THESE SAME CERTFICATE HOLDERS HOLD NOTHING MORE THAN CERTIFICATES TO A SECURITY AS SECURITIZED……THEY DO NOT HOLD THE ASSET MORTGAGE!

    The Security has risk much like a casino bet, that said insurance on such bet doesn’t always pay.

    Am I down on “investors”…..NO! How about joining with the borrowers in your assault against the investment bankers…..What borrower wants to see their pension fund etc. be wiped off a sudo balance sheet maintained by sudo Trust?

  56. ,…if the banks got paid for your mortgage whether it be via PMI insurance or government bail out funds….then the homeowner owes money to the entitity that paid off their mortgage…not the banks getting paid..again!! Frankly, I rather owe the Feds in hopes that they will truly modify my mortgage to a lower rate and then sell it to a community bank of credit union..

    These mega banks must be broken down!!

  57. Glad to read that investors are now jumping on the band wagon!! We need all parties involvement to correct this injustice done to the people! The price of greed…was almost the destruction of society as we know it…now we are all fighting back!!

    I am still advocating jail time for all of those participating in this sort of ponzi scheme and racketeering!!…after all Martha Stewart, Enron and Worldcom executives went to jail for similar reasons!

  58. Subprime were NEVER “loans”…just collection rights on fraudulent default debt…the contracts were fraud fraud fraud from beginning to end…

  59. predatory up front loans are now only presumed vitiated if to minorities

  60. i sympathize—i did–and i deeply regret it—i swore 40 years ago to uphold the system and it changed and it failed me –and everybody else—–what punishment is there that is adequate to reach people who stole faith in a way of living –stole away confidence that we are free—stole away lives’ savings and hopes

    what is the penalty for such crimes?

  61. and there IS “extreme fraud” that “vitiates” it…hello?

  62. @DCB

    That’s why I paid my own property taxes…AND recorded a new Grant Deed…
    Those greedy lying bastards aren’t getting MY house…

  63. I honestly do not mean to be argumentative–but i understand the old property law concepts. The tax issue is sort of associated but the basic statutory escheat rules were designed to force a bank that held your deposit to “disgorge” the unearned windfall. Its an equitable remedy reserved to the king/state. If you leave town and forget your money–the bank cant just keep it. They MUST turn it over to the state in certain time frames. Similarly for deceased persons. If you created a financial instrument [absent extreme fraud that vitiates it], then you have been the “maker” of a financial instrument that is covered by escheat law. If the note drops out of a bearers suitcase and gets picked up–the bearer/owner dies or goes babnkrupt and that asset is abandoned by the trustee in bankruptcy then the state succeeds to ownership by statute–you have to cut off the states interest in the note if you claim all these things. in my humble and imperfect view, for me this resolves the moral dilemma and makes the world majke sense–for people who think debt just extinguishes itself–its not the right answer–and really i believe that the really predatory stuff should be unenforceable –i really do–but the law does not….as far as i can tell

  64. Maybe we should cut out the middle man banks and the investors should open up investor institutions

    did you ever see its a wondeful life–the things you describe were called savings and loans———–community institutions—–the banks wiped them out in scandals in the 90s–you are right –it worked when that was the model–my parents used an s/l—we knew the president–an average guy—not a frauder —

  65. The servicer or any other aren’t making volunteer payments out of the goodness of their hearts. They have their own reasons for doing it ”

    absolutely correct–they do it to get a lien and they pay the taxes so its their name that the sheriff and court want on the check—proceeds of sales—–they look at who pays the taxes and assume thats the proper payee

  66. yes enraged i was attempting to respond to you. I cannot cite the specific provisions offhand in ohio—-no I id not vote for former Senator Dewine–

    When they seize your house you cannot vote for a considerable time as you drift address to address—you lose your right to vote and become a transient.

    I dont even know when that election occurred –wasnt in ohio in recent years–in DC.

    but it is in your interest to look up the rules on quiet title if you are going to address the issue—-its a much overlooked element of the solution in the most egregious cases—-and where you have rural conservative judges with most of their base being german farmers with little sympathy for non-payers—-at least until the banks start coming for their farms

  67. There absolutely ARE free houses, they have been awarded to the rightful owner by the JUDGE, because a bunch of greedy banks sold the bearer paper so many times it will never be possible to discern who the current “owner” of the “loan” is.
    Property taxes are a completely different matter, they are a 40% assessment on a property value base determined by comparables, and the only reason they are escrowed is to make it easier for the property owner to pay them. The banks can’t foreclose if you don’t pay your property taxes if they are not included in escrow. They can try to charge you for forced-placed insurance if you fail to pay the annual hazard premium, but even that can be challenged, since they have no insurable interest in your “loan”.

    @BYTHEWAY; there is no statute of limitations on fraud. You can demand that the loan be rescinded under the “equitable tolling” clause, by citing a recent discovery of fraud, at which point the clock begins ticking, not when the loan was originated.

  68. DCB

    Wondering about taxes and the “King”. Many people pay their own property taxes and have never had an escrow – and continue to pay them even while in foreclosure – does that change the escheat? Is escheat related to taxes? (Something that bothers me about modification agreements is that you have to agree to an escrow which is what my servicer said, which could be wrong – not in the current terms of the mortgage and a modification is not a new mortgage).

    Anyway home isn’t ever free – even if owned free and clear – you still have to pay taxes to the “King”. Is that the ancient law you mean? The mortgage is a deal with the “lender” not the King. If the lien is paid in full and or there is quiet title there is no “lender” anymore – his interest is forfeited (and for good reason when there is fraud). He is removed from the title. There is nothing to escheat.

    What really has to happen is that the rule of law is followed wherever that leads. No one, especially judges, should just make up the law as they go according to who they choose should benefit from their decision for whatever moral hazard reason they think exists. That goes for both banks and homeowners. The law is on the side of the homeowners though in this fight. It isn’t being followed.

  69. There has to be a better way! I know this looks very promising and it has to be good for us because more of the truth is bound to come out of this. Politicians listen to me the banks dont distribute money the investors do, banks steal money and the voters give you the power and prestege, the banks make you criminals. The investors nor the 99% will trust you predator banksters nor the politicians that protect the guilty and do not protect the innocent. Maybe we should cut out the middle man banks and the investors should open up investor institutions (no banks) and whole sale loans at a decent interest rate with no predator bank’s servicing companies fees, to eat up [ALL] their profits with servicing fees and flat out theift. You can bet the investor will make sure the loans are documented, and will not steal free houses, cause they really did loan the money.

  70. The servicer or any other aren’t making volunteer payments out of the goodness of their hearts. They have their own reasons for doing it and it has nothing to do with the homeowner. The homeowner did not borrow those payments from them. If Aunt Tilly pays the mortgage for awhile and her nephew still defaults later on, Aunt Tilly doesn’t get the house. The lender-beneficiary gets the house but Aunt Tilly’s payments still reduced the balance owed.

  71. the servicer volunteer argument if no trust is a good argument—but seems to be what state should assert as escheat argument to defeat claim of servicer–if i were an ag i would not let revenue be stolen from under my nose

  72. “that beneficiary is paid in full by anyone or he has released the lien and taken a tax write off (can’t take a tax write off and then turn around and sell it too)”

    deducted as a loss–as in i bought something that i thought had value but turned out to be worthless—or a closed transaction for which i received consideration?

    release of lien does not necessarily release a note liability—-in all states———–differences everywhere—–

    look hard at your quiet title rules–if state may have an interest it must be named–but iv never heard it used–im just an old property and tax guy—–not very smart—im just calling it as i would see it were i a judge—faced with the moral dilemma trap—i do not want to reward the servicer with a windfall—but i dont want to encourage the entire community to stop making payments either–give me a choice

  73. @DCB,

    You’re talking to me?
    You’re talking to ME?
    You’re TALKING to me?
    YOU’re talking to me?

    Inother words, (and since I specifically addressed my post to you) was your last post in reference to mine, specifically addressed to you…?

    Damn lawyers! Yhey’ll slip through your fingers every which way!!!

    Honestly, what was that thing you wrote about not being able to quiet title without the AG being involved?

    OMG! You voted for DeVine!!!

  74. every state differs as does every fact pattern—no silver bullets or certainties anywhere——-the lost note is an escheat if it is ever placed in hands of a possessor——–that is a financial institution w/o a right

    but they are more reluctant to admit to escheat than the homeowners that would like to believe the free house thing–its just not right –it is a forfeiture unless off set by damages

  75. I did natl law on taxes and escheats——–all states have escheats–look up the ohio escheat law and see what it says–also look up the typical quiet title statute and see what it says about parties with an interest——-if i am correct the state has an interest if all the talk about abandoned notes etc etc is factually correct

    if something has to go to somebody other than the victimized homeowner–let it be the state—not the servicer-profiteer

  76. hey, hope no one thinks this is a misuse of the site, but I have a question: anyone know a pdf to text / word converter that actually works? thanks

  77. joann, you go, girl! I agree with everything you said fwiw. Most info here leads to more questions, I think, which ain’t all bad. Here are some which come to my mind needing answering (as to joann’s post):

    Can a person with no interest in a matter legitimately get insurance of any kind on that matter? (including default swaps) Seems to me this is a big question.
    If a person’s ‘tie to the matter’ is a volunteer guarantee on the payment stream, does that meet the requirement ( if any) of interest in the matter sufficient to meet ‘standing’ as to insurance?

    When pool insurance is taken, who is the beneficiary? Who should it be?
    Did the investors have any expectations of insurance on the loans, other than the loan guarantees we are getting into this week ?

    Was there a seasoning requirement for mbs which by and large was ignored by wall street? If so, what does this mean if loans allegedly went into pools prior to any seasoning req imposed by NY Trust or
    securities laws? If strict compliance is the ticket, someone else does?

    If loans didn’t make it into pools for any number of “irregularities”, who owns them? (I don’t know who really owns them, anyway).

    If any insurance were issued on loan # 23765, and the beneficiary of the insurance were someone other than the person with the right to payment on the note, how does that impact the note? Not at all?
    Now if I were an investor, I do believe I start sqwauking unjust enrichment all right).

    If insurance were taken by a party with no legitimate right to get that insurance, does anyone, like the investor who owns the payment stream, have a claim, even in equity, for those funds when payments cease? No? Just messed over?

    If the insurance funds were issued to people with no real interest in the loans, isn’t that just tough for the borrowers because those funds would not affect note balances ?

    Take MERS out of the picture, right after acknowledging that MERS no longer ‘allows’ its members to foreclose in its name (remember the Consent Order). A loan made it into the trust. The deed of trust is still shown in public record with MERS as someone (my fingers bleed to type this). Once courts recognize the illegitimacy (and I’m onboard RICO on this hummer) of member-self assignments of the deeds of trust, who is going to execute the assignments?

  78. hey all when do i find out about my trust. wells fargo is trying to stael my home. my signiture is fabricated on the note and the signiture by wells fargo is stamp of joan m mills yes i have counsel

  79. Right ON, joann!! THAT’S what I’m talkin’ about!!

    Can you email me? I have a question…thanks! cariemac9@gmail.com

  80. DCB and Enraged

    Seems to me paid in full is paid in full. It doesn’t matter who paid it or when – it matters who got paid. If true beneficiary is identified and that beneficiary is paid in full by anyone or he has released the lien and taken a tax write off (can’t take a tax write off and then turn around and sell it too) – there is nothing owed to him anymore and he cannot sell it to anyone else. Would be fraud if he sold it. There is no lien anymore. So there is a reconveyance as defined in the deed of trust. It is owned free and clear. Paid in Full. Nothing to escheat to the King.
    It’s not a free house (setting aside what the homeowner has paid in taxes, insurance, points, fees, downpayment, interest, principal, maintenance and improvement over and over again for years or decades). The beneficiary either got paid or released the lien, No lien paid in full. If he is looking the other way while a thief pretends he is now owed the full amount and duns the owner or takes his house……We need full disclosure of what is owed the beneficiary. It should be a pretty straightforward request and it is in the law…

    When you say abandoned property goes to the King – it isn’t abandoned. The owner has title. Bare legal title went to the trustee who can convey full title back to the owner or full title to the beneficiary – if the beneficiary can’t be identified or has abandoned his claim isn’t that what quiet title does? All those recorded with a claim and all those not recorded get a chance to prove their claim – if they cannot or committed fraud ect the full title is reconvyed to the owner. No more lien. If the King wants it he needs the signature of the owner. Nothing is owed the King. Owners rule. It’s called real property for a reason.

  81. @DCB

    Hmmm….well…I’M the ONLY one on the Grant Deed…and I have REVOKED their ILLEGAL Deed Of Trust…

  82. @DCB,


    I was starting to enjoy reading your posts but I’m not sure I like the last one. Suppose I do get my servicer to back off and no one ever comes after me, what do you mean I “can’t get and keep a free house”? Can you expand a little?

    And I don’t know if you’ve noticed but we have a completely useless AG whose claim of fame is to go after medicare and medicaid fraud (neither of which ever brought any country to its knees, mind you). As much as Marc Dann was proactive in his fight against Wall Street, that DeVine guy seems rather useless… I have yet to hear the words “mortgage fraud” and “mortgage crisis” come out of his mouth. it’s as though the problem simply doesn’t exist in Ohio…

    Why would anyone in his right mind include him in any proceeding?

    Not looking for legal advice but I didn’t get what you wrote and my intent is to, ultimately, quiet title the hell out of my house… You’re raining on my parade, my friend!

  83. In Ohio the king’s interest is represented by the AG—I have see him joined as a party defendant in an escheat action–if you do not you will not even have a quiet title if the servicers etc default. Your title could be re-opened by an agency granted the residual state interest. Under Anglo-American law it is impossible to get AND KEEP a free house. It will come at you as a title insurance issue when you sell or die, just as if you try to sell a property that you obtained by adverse possession.

  84. @DCB

    MAKE YOURSELF THE “KING”…it can be done…

  85. This whole thing comes down to the simple criminal fact that “NO LOANS” went into any trusts…they are HIDING ALL the FILES that will show the WHOLE TRUTH…the full exposure is coming closer and closer…and MERS and MERS’ “cronies” will finally be revealed as the criminal enterprises that they were and are…among other things…

  86. “With the creditors disavowing the transaction and making no claim against the homeowners there might be nobody to pay.”

    If these allegations are proved or a default occurs on these allegations then the maker of the note owes the obligation to the state under typical old fashioned escheat laws–which preceed all the other laws mentioned —including the statute of frauds. The concept is that everything is owned by the king in the 1st place—and allows certain vassals to handle his stuff–realty usually—subject to conditions. If the vassal–say a Duke—screws up, fails to meet his obligation to the king to follow the rules, then the estate in land reverts to the king.

    So although there may be a modern rule of “finders keepers”–the ancient rule is that the finder must give the property back to the king—since there is no doubt about his interest–it cannot be cut off but can be waived. Thus no matter how much you screw around with title the county real estate tax applies and if you lose title to intangibles or real estate–it reverts to the state. This is the way out—this is how states can balance budgets–seize the mortgages and loans as abandoned by the real lenders or lost—-then cut the modifications–state AGs should be part defendant to all these suits—-just like the prosecuters are namedbecause of their interest in the real estate taxes.

    i know all you people like to go on and on about keeping intact the old laws–old commercial code–old real estate recording etc–and I agree—–but you cannot pick and choose which old laws should apply and which not. READ ABOUT ESCHEAT–and see how you can use it.

  87. Now this is interesting. Found it at Overstock today:

    “For six years Overstock.com has waged a war to expose Wall Street mischief. We did not go looking for a fight, but we learned that we were under attack, and when we investigated, the trail led to illegal manipulative activities being practiced by the dirtiest elements on Wall Street against American companies and their shareholders. So we took them on, and crunched our way up the food chain, exposing Wall Street miscreants in the process (and making over $10 million in settlements as we did so), until all that is left is the title fight. In March 2012, Overstock will square off with Goldman Sachs and Merrill Lynch (a Bank of America subsidiary) in a San Francisco courtroom, in a trial that we believe will make history.”

  88. Anybody know when they will be doing theKS4-2006,US Bank?US Bank tried to register our mortgage into the trust on 6-2-10,approx. 4 years after the closing date 5-30-06.Would appreciate any info.Thanks.

  89. Is this “Straw man” stuff the reason WaMu continued to fund loans as WaMu,FA (Lender) long after WaMu,FA merged in 2006 (per 10K filing)? I understand loans done by WaMu,FA as being WaMu FKA WaMu,FA, but to continue using the name as Lender long after the name was merged into the new entity is a large question to me?

    Does anyone know anything about this?


  90. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA, TILA audit, trustee, US BANK, WEISBAND, Wells Fargo, WFALT, WFHET, WFMBS, WMLT Livinglies’s Weblog […]

  91. I can’t wait for my so-called trust to come up in a list slated for litigation like the one included in this post. I have an assignment that puts my note and mortgage in a trust almost 3 years after the alleged default.

  92. @johngault

    Are you represented by counsel?

  93. […] Read More: MBS Investors in Revolt: Ultimatums to US Bank and Wells Fargo […]

  94. Now there we go: Gibbs & Bruns, the law firm representing the investors, are somebodies who might be interested in the street’s (that would be us) side of this mess. The email addresses are easy enough to find, as is G & B’s street mailing address. And how about MBIA’s counsel? They might be interested, also.

  95. Question: Wells is my servicer and US Bank is my trustee for CSFB HEAT 2006-3. Do you think it is the same as WFHET 2006-3??

    I would apperciate and help….

  96. I wonder what the banks’ talking points to demonize the investors will be. This is getting good!

  97. @iwantmynpy

    Do you have any case law regarding Respa, FDCPA violation?


    they have to tell you when the servicer changes under FDCPA

  99. I mailed a TILA recession letter for a loan orginated in 2006, The bank responded the 3 year made my recession null and void, how can you make claims around this 3 year rule, if the loan was sold and sold and sold. Don’t they have to tell you via TILA when the loan was transferred.

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