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Editor’s Comment: 

Thanks to Home Preservation Network for alerting us to John Griffith’s Statement before the Congressional Progressive Caucus U.S. House of Representatives.  See his statement below.  

People who know the systemic flaws caused by Wall Street are getting closer to the microphone. The Banks are hoping it is too late — but I don’t think we are even close to the point where the blame shifts solidly to their illegal activities. The testimony is clear, well-balanced, and based on facts. 

On the high costs of foreclosure John Griffith proves the point that there is an “invisible hand” pushing homes into foreclosure when they should be settled modified under HAMP. There can be no doubt nor any need for interpretation — even the smiliest analysis shows that investors would be better off accepting modification proposals to a huge degree. Yet most people, especially those that fail to add tacit procuration language in their proposal and who fail to include an economic analysis, submit proposals that provide proceeds to investors that are at least 50% higher than the projected return from foreclosure. And that is the most liberal estimate. Think about all those tens of thousands of homes being bull-dozed. What return did the investor get on those?

That is why we now include a HAMP analysis in support of proposals as part of our forensic analysis. We were given the idea by Martin Andelman (Mandelman Matters). When we performed the analysis the results were startling and clearly showed, as some judges around the country have pointed out, that the HAMP loan modification proposals were NOT considered. In those cases where the burden if proof was placed on the pretender lender, it was clear that they never had any intention other than foreclosure. Upon findings like that, the cases settled just like every case where the pretender loses the battle on discovery.

Despite clear predictions of increased strategic defaults based upon data that shows that strategic defaults are increasing at an exponential level, the Bank narrative is that if they let homeowners modify mortgages, it will hurt the Market and encourage more deadbeats to do the same. The risk of strategic defaults comes not from people delinquent in their payments but from businesspeople who look at the principal due, see no hope that the value of the home will rise substantially for decades, and see that the home is worth less than half the mortgage claimed. No reasonable business person would maintain the status quo. 

The case for principal reductions (corrections) is made clear by the one simple fact that the homes are not worth and never were worth the value of the used in true loans. The failure of the financial industry to perform simple, long-standing underwriting duties — like verifying the value of the collateral created a risk for the “lenders” (whoever they are) that did not exist and was present without any input from the borrower who was relying on the same appraisals that the Banks intentionally cooked up so they could move the money and earn their fees.

Many people are suggesting paths forward. Those that are serious and not just positioning in an election year, recognize that the station becomes more muddled each day, the false foreclosures on fatally defective documents must stop, but that the buying and selling and refinancing of properties presents still more problems and risks. In the end the solution must hold the perpetrators to account and deliver relief to homeowners who have an opportunity to maintain possession and ownership of their homes and who may have the right to recapture fraudulently foreclosed homes with illegal evictions. The homes have been stolen. It is time to catch the thief, return the purse and seize the property of the thief to recapture ill-gotten gains.

Statement of John Griffith Policy Analyst Center for American Progress Action Fund

Before

The Congressional Progressive Caucus U.S. House of Representatives

Hearing On

Turning the Tide: Preventing More Foreclosures and Holding Wrong-Doers Accountable

Good afternoon Co-Chairman Grijalva, Co-Chairman Ellison, and members of the caucus. I am John Griffith, an Economic Policy Analyst at the Center for American Progress Action Fund, where my work focuses on housing policy.

It is an honor to be here today to discuss ways to soften the blow of the ongoing foreclosure crisis. It’s clear that lenders, investors, and policymakers—particularly the government-controlled mortgage giants Fannie Mae and Freddie Mac—must do all they can to avoid another wave of costly and economy-crushing foreclosures. Today I will discuss why principal reduction—lowering the amount the borrower actually owes on a loan in exchange for a higher likelihood of repayment—is a critical tool in that effort.

Specifically, I will discuss the following:

1      First, the high cost of foreclosure. Foreclosure is typically the worst outcome for every party involved, since it results in extraordinarily high costs to borrowers, lenders, and investors, not to mention the carry-on effects for the surrounding community.

2      Second, the economic case for principal reduction. Research shows that equity is an important predictor of default. Since principal reduction is the only way to permanently improve a struggling borrower’s equity position, it is often the most effective way to help a deeply underwater borrower avoid foreclosure.

3      Third, the business case for Fannie and Freddie to embrace principal reduction. By refusing to offer write-downs on the loans they own or guarantee, Fannie, Freddie, and their regulator, the Federal Housing Finance Agency, or FHFA, are significantly lagging behind the private sector. And FHFA’s own analysis shows that it can be a money-saver: Principal reductions would save the enterprises about $10 billion compared to doing nothing, and $1.7 billion compared to alternative foreclosure mitigation tools, according to data released earlier this month.

4      Fourth, a possible path forward. In a recent report my former colleague Jordan Eizenga and I propose a principal-reduction pilot at Fannie and Freddie that focuses on deeply underwater borrowers facing long-term economic hardships. The pilot would include special rules to maximize returns to Fannie, Freddie, and the taxpayers supporting them without creating skewed incentives for borrowers.

Fifth, a bit of perspective. To adequately meet the challenge before us, any principal-reduction initiative must be part of a multipronged

To read John Griffith’s entire testimony go to: www.americanprogressaction.org/issues/2012/04/pdf/griffith_testimony.pdf


44 Responses

  1. Neil you want to work together? – tenbips@yahoo.com. As you may already be aware – I am the smartest on this thread… Or at least I am smart enough to make this claim.

  2. Hi, Neat post. There’s a problem with your web site in web explorer, would check this? IE nonetheless is the marketplace chief and a big part of people will miss your excellent writing due to this problem.

  3. Interesting fact. Is that I still have the unsigned note from my mortgage inmy fraud file on mortgage.

  4. Annnnnnnd I know,hysterical peals of laughter will continue to sound,glances of glaring countenance,swords plunge the backside…I still will state it,ask it:”WHY??are we,the’advanced species’ still acting as if this SHOULD be the way..to pay and pay and pay and pay and pay for the”privilege”to Live upon the planet we were ALL Born upon?What makes the theory of somehow,we all “must owe” somebody,somewhere,some fiat OR solid Au…forever and ever?the so-called limited supply?said who?
    I say it is ALL a lie….all of it,a terrible Lie…..it’s a LIE!!!No I’m not smoking or drinking anything,no pills nothing but my thoughts…and,many many others….what IF?

  5. E.Tolle…inDEED!!!! guest,thank you for the link to the Banker’s Manifesto…hidden invisible hand speak not above a whisper..unless you care to THUNDER in the face of INJUSTICE!!!En le Brecha!!!!CHARGE!!! In memory of my Sister-in-Revolutionary-Spirit; in Defiance of the Murders uncounted through the history of greed vs need…wherever you are,Belen,may your Cup overflow with sweet Wine,always,and your Sunshine-filled days be many,your legacy&library are not wasted…my heart holds your Family and our many happy times within.Carefree in the golden days of our youth,we swung beneath the fragrant Apple-boughs and the breeze was kissed with pardon,found here in my silver tinged hair and each salty tear that falls in these now silenced halls;where I can yet hear the fading echo of your and my Childrens’ laughter …and as I feel the approaching sorrow of the day when I surely must depart these now emptied rooms;I will turn to “If” and hold your Strength with me,as the North Star is watched upon in a lonely vast ocean..my boat is smaller now,and there seems no Port to drift towards…now that the Sun id gone near down.Fair Winds,all…

  6. Doctors wrote me off after I became allergic to man made poisons, (antibiotics) I was near death from Systemic Scleroderma. Couldn’t walk, open my mouth or get out of bed without help. Two other patients my doctor tried to treat both died. I found a natural treatment that did in two months what the drugs couldn’t do in two years–Sodium Borate Decahydrate, commonly known as 20 Mule Team Borax. I will never take anything man made again. I also take Hulda Clarke’s Black Walnut tincture, cloves and Wormwood every few months to stay free of the nasty things looking for a host in this diverse world. It’s sad that the FDA has become so corrupt that they no longer function in a protective role between big pharma and us, but the fact is the natural cures that the Creator put here for us are far more effective and safer than the profitable poisons used to endlessly treat but never cure disease, made by corporations.

  7. @Carie,

    Years ago, i discovered something called DrNatura. in this country, no one wants to talk about parasites (anything that lives off of you is a parasite. Every culture in the world has anti-parasites remedies. That’s the first thing Asias, Africans and even most Europeans look at before prescribing anything).

    A 3-months complete cleansing followed by the olive oil/lemon liver cleansing is all i needed. And whenever i have any kind of an infection, I use colloidal silver that i make myself. Haven’t seen a doc in 26 years. I would have go be pretty comatose to end up in a hospital… I ain’t gona go on my own will.

  8. The source of funds was never a pool of investors. Any money put up by them was simply siphoned off by the banks in the form of fees and profits, or to put it another way, stolen. The true source of funds for the “borrowers” purchase of a home came from the BORROWER. The signature and credit file were valuable to the banksters. They endorsed the Note and “sold” it for Federal Reserve Notes or a ledgered credit which never left the system, which links all banks like a network; it was simply transferred to the selling bank and the property was ledgered as an asset at the buying bank. This never comes out in trial because the banks want to hide the truth about their system at all costs, and they settle for huge amounts rather than risk the exposure. However, a recent lawsuit concerning the theft of $134 billion in Treasury bonds stolen from Neil Keenan by Daniel Del Bosco threatens to bring down the entire system. You can listen to a radio broadcast by Maddison Rupert discussing this important case, which is being reported as the “lawsuit to end financial tyranny” here;
    http://endthelie.com/2012/04/29/end-the-lie-radio-with-madison-ruppert-episode-13/#axzz1tv0eOq34
    Coded Bonds seized in Italy turned up in the U.S. system as unspent Tarp Funds! The curtain is gradually being pulled right off the rod!

  9. @Enraged

    Perfect example: For ten years I suffered from horrible dizziness and fatigue which began when I lived at a moldy apartment at the beach…8 doctors couldn’t help me…I saw Cass Ingram on TV one day a couple years ago talking about pure “oil of oregano” and how it kills the bad fungus literally living in your sinuses…I tried it…and within TWO days my dizziness and fatigue was GONE…NO DOCTOR IN TEN YEARS TOLD ME ABOUT THIS NATURAL CURE.

  10. @Pie,

    That has been a pet peeve of mine for a very, very long time: that the Feds regulate something natural, that grows on its own and is, after all, completely fit for consumption so long as we don’t tamper with it.

    Think about it: in many states and counties, people are NOT allowed to grow food in their own yard. Why? Because private interests want to control absolutely everything we, as a species, need to survive. Pharma replacing what nature created by mandmade drugs serves to, once again, empoverish the poor and enrich the rich. Make people sick by injecting all kinds of chemicals into them, take away their ability to treat themselves with proven methods that have existed and been known for thousands and thousands of years and assure that you control food supplies and you have the perfect ant colony: workers whose only value is that of productors and tyrans who reap the fruit of that labor.

    On the other hand, it is absolutely undeniable that, once the pendulum has swung too far in one direction, it must swing back almost as far in the opposite one before it comes to rest. We’re in the other direction swinging phase. I firmly believe in it. Even if we are not yet seeing the result of that reversal, it is in full swing.

  11. The main ROBO signer. Is my former husband. (seriously). I plan to get some docmentary proof to Neil. There is just so muh fraud he is involved in. Beginning in the 1980s. On Long Island, NY. Not by any means limited to mortgage fraud.
    The reason that I beame aware? Is that My kids & myself are being negatively effected by his access to filing official documents. I have found duplicated identities on us. ex used variations of our names & place of birth. Created new birth certificates on my our kids back in 1988. I never knew it. Use a fake marriage license that he created for him & I. Got 2nd Social Security # for me & kids, with new birth certificates,. Then created a new deed on our home 1988. On the back of the deed where it is stamped it says # 2. the same being done with many titles/deeds. Will often say in Roman numerals #1 & another will say # 2.
    Our home was located in East Patchogue, NY. One deed says Patchogue another just Patchogue. I am unable to get any help from the courts, police, clerks even lawyers. Due to their dirty hands. All involved in his fraud. Caught between a rock and a hard place.

  12. @ enraged & carie – funny thought,we live in society were we have to watch what we eat to limit the dangersand it is all governed by one agency whcih also signs on and regulates meds. Never took a second to think about it, the “food and drug administration”. We have 5 branches of war machine, yet we can only muster 1 agency to oversee the food we consumer and the medicines we all need. We are truly “feeders” in the eyes of the great.

  13. Hello everyone, I just noticed something and would like to run it by all of you. I think this might be a major issue to help many of us.

    How can the mortgage and the note require conflicting (opposite) performance and still be enforceable?

    I agreed in my mortgage (FNMA boilerplate) that I “warrant and will defend generally the title to the property against all claims and demands…,” but the note forced me to waive notice of dishonor, which effectively robs me of my legal right to generally defend title. The lack of notice of dishonor determines holder-in-due-course IMMUNITY to my REQUIRED performance in the mortgage. Under contract law, does this fly? Isn’t this an unconscionable (thus unenforceable) two-part contract?

    Additionally, the note misrepresents and conceals the true meaning and effect of the borrower’s waiver of notice of dishonor–conveniently forgetting to disclose that by this required waiver, a borrower forfeits any effective means to asset legal rights.

    Is this exculpatory language that makes one agreement or the other, or both, unenforceable?

    When a borrower acknowledged that the loan may be sold, I’d say 99.99 percent of us had no clue that we were acknowledging selling our legal rights along with it.

  14. ANONYMOUS – Anyway to discuss offline ? I am still in the battle .
    I could use your help !
    BSE

  15. iwantmynpv- good work on your non-medically treated diabetes. Also am interested in reading your court results with OneWest next week. Best wishes, and thanks for your posts.

  16. Nancy –

    After 4 years I finally found someone who went through what I did with six different loans and names but my original loan they cannot find anywhere.

  17. I know what the bankers are doing and how these loans are slipping through. Hve time tomorrow to explain.

  18. @npv

    “…I often wonder if the pharms and the food companies work together to make us ill so we need their medicine…”

    YES—ABSOLUTELY—NO QUESTION.

    Just like the debt collector/credit companies work together to make us dependent on DEBT…etc.

    And then Wall Street bets on ALL OF IT.

  19. @npv

    Forgot to ask if you could please post your motion…thanks.

  20. @iwantmynpv

    Good luck. I had/have OneWest…they insisted they had standing and were foreclosing “on behalf of the securitization”…

    @Enraged

    I hope there’s a really nice art studio in that house…

  21. @Pie,

    Have you considered this major oxymoron:

    Food and Drug Administration

    Food is food. We came to this earth long after food existed. And it sustained already many species. Didn’t need to be tampered with. Fruits were flowers that lost their petals, grew into something edible. What was left (seeds) fell on the ground, sprouted and became new trees that would bear fruits. Vegetables and fruits contained all the minerals and vitamines to sustained life. As were. No need to add sugar or salt. it was all there.

    Drugs… well, it’s another story. Manmade from day one.

    The more we tamper with food, the more we need doctors and drugs.
    Many of them are in such a bad shape, I really don’t want what they’re trying to sell me: obviously, it doesn’t work for them.

    Common sense tells me there something wrong with that system.

    That’s all i have to say. Except… 56, not overweight, not exercising other than to do what needs to be done (yard work, house work) enjoying life by riding my bike and walking to the grocery store. Not one health problem. No HBP, no diabetes, no… nothing.

    Nope. Can’t say Monsanto does it for me. Can’t say I can escape it completely either. I limit the damages as best as I can.

    Call me nuts. Fair trade: I call you Pie anyway.

  22. Total true losses as Fannie and Freddie will exceed a trillion dollars. This is a fact based on the Master Trust and Sub-Trusts.

  23. @enraged i have diabetes. Stopped taking the medicine, lost 50 pounds, cut out all fats, caffeine, processed msg ridden foods, and now sugars are under control. I often wonder if the pharms and the food companies work together to make us ill so we need their medicine, which increases appetite, which makes us need more medicine, and so on…

    i am not coming to the party unless I get a special invite. I will pay for my own ticket. Wish me luck, i am filing a dismiss motion next week seeking damages… I will post the motion here if eveyone who has a case with One West would like to follow suit. i already know I am going to win, but the damages will be the important factor.

  24. @Pie,

    What happened to the 1,324th one? Who did we just lose?

  25. @Pie,

    Don’t like Monsanto.

    Don’t like “no fat” that tastes like cardboard. Don’t like sugar in my cheese or my Dijon mustard. Don’t like hormones in my meat. Come to where i live and you’ll see why: people all have a very small head, sunking shoulders, an enormous butt, big thighs and no calves. They look like chickens. They’re turned into chickens. Scares me to death.

    Don’t like the idea that 14% of the population has diabetes. And everyone i know my age or older has to take 14 pills before every meal.

    Doesn’t sit right with me. Call me nuts.

  26. Make that 1,323 followers coming to the party.

  27. @enraged, are you one of those nuts that thinks they are chemically changing the gene pool through seed and feed?

  28. Yeah, thanks for the invite. Wehn someone cancels late don’t bother sending me a fillint he empty seat invite.

    Thanks again, I’m taking my football and going home!!

  29. Guys,

    When this is all over and we can start breathing, we’ll all have a major party. At Neil Garfield’s. After all, he put us all in touch with each other. We owe him a lot. And his combo thing worked out so well, it will be in the biggest repo’ed, resold, repurchase, clean-titled mansion in Phoenix, AZ. Swimming pool, gold course and all.

    And eat, drink and be merry party. We’ll fly or drive to AZ, have a major gathering, the likes of which has never been seen (what, with 1,324 followers we are, altogether… It ought to be good!) We’ll meet Carie in her new house, twice as big as the old one and so much nicer! Shelley will come ahead of time to do our hair and she’ll bring the 50 masseuses from her high-scale SPA. DCB will be there, boring everyone except tnharry (you know, lawyers together… they get along, regardless which side they’re on). Toile will have the mike and do the intro. Nancy Drewe will fly by jet, with her new found wealth from that Abeel case. We’ll invite Mandelman, Matt Weidner, Mark Stopa and all the other major players.

    We’ll be good to Patrick. He meant well the whole time. And anyway, DCB and tnharry will cheer him up if anyone bullies him a tad. They are many others i forget but we all will be there. Las Vegas, Chas 404, Hman, the whole bunch.

    And it will be paid for by Jamie boy and his friends, Stumpf, Moynihan, even Geitner and Holder.

    What a vacation!!!

    Got that pencilled out in my book already.

  30. The white gallatic knights came to the closing table and decided to mortgage planet earth. James “hunter/gatherer” Dimon Sr. looked on in caution as the knights began to discuss the securitzation pool, and why intergalaxy 4 was being named the Trustee over “The JPM Earth Backed pass through certificate Asset Pool, 22,009BC – 04”.

    Mr. Dimon quickly explained the liquidity earth needed, and that this financial mechanism would allow the servicer to spread risk to infinity, while increasing the inter-gallatic money supply.

    The knights had no idea what they were signing and put thier signatures onn the dotted line, similar to current-day pension fund managers. Earth was immediately sliced up in 2,000 tranches and the synthetic swaps were sold to the black knights in galaxy 6.

    Dimon than went to other clients in galaxy 8 and told them to go short earth, and that is way overleveraged. Many galaxies started pulling funds from earth, and as the earth economy dried up in response, the white knights knew they could not make payments. JPM told the white knights they may qualify for the SPACE H.A.M.P., and that they just needed to send 600 pages of financial information over and when he said they lacked standing Dimon went to his uncle, the devil (lol, who could dream this shit up without herb), and they decided to hire all the black knights to forge documents, whcih lead God to believe that Dimon was the real party in interest. JPM foreclosed on Earth and decidedfor good measure to cull the planet. the end.

  31. Ignorance is bliss, but without people like us asking questions, or fighting pro se, would there be anyone asking questions?

  32. @enraged watching what occurs around you in disbelief at times makes one want to scream out. Sometimes when you simply “get it” it becomes more a burden than anything else, and you find yourself sitting and wondering, was it really worth knowing in the first place.

  33. Well guys,

    I see that bankers are already doing a faaaahne job screwing up with our genes WITHOUT any of Monsanto’s help! Just throw in people’s life enough fear, worries, anxiety and instability and we’re garranteed so much mental illness that, pretty soon, everyone will be stoned-solid, drunk as a skunk or zombied out with Zoloft, Zantax and Haldol…

    That will be interesting to see the next generations, once they’ve gone through it. Bob Vosatka (neo-natalogist and geneticist) was telling me once: “The human gene pool has been corrupted beyong measure. Hence the increasing number of bad baby cases. And it will keep getting worse.” I hate to see how much more corrupted the human gene pool will have become once we are on the other side of the greatest manmade financial scandal in human history…

    Maybe… just maybe… those little green guys in their flying saucers were once a thriving species until they invented banks…?

  34. @enraged

    Join the club, i can’t mention real estate, mortgages or anything other without people saying, “oh no not that again.” But it’s funny because when the mortgage stuff hurts them, then they call. I wish people would realize what hurts some of us hurts all of us.

  35. @chas404,

    I’m where you are. Except that I’m the one who went on the attack and then stopped paying. But the result is the same: life is passing me by, I am held hotage in my own house not-yet-really-mine-yet-no-one-else’s-either, I spend hours each week researching, researching, researching. Everytime I lift up a doodoo, i find a bigger one underneath. I’m in doodoo up to my elbows and climbing and i can clearly see that I now harbor a strange look about me, halfway squinting, halfway stoned (without any drug, mind you), stunt and stumped, muttering all day long: “Huh?”, “Huh?”

    I’m telling you, nowadays, people meeting me leave thinking: “She isn’t fully cooked yet. There’s still plenty of room left in that skull…”

  36. I am dealing with Fannie Mae and servicer bank but thankfully hired a lawyer. This is Florida. It is interesting that I have been offered now 2 opportunities at 3rd party mediation groups yet I have no one on the bank’s end to negotiate with. I am expected to turn over all my financials before mediation (lawyer says no) yet the servicer just assigns itself the note/mortgage via MERS and will show none of its paperwork obviously.

    By hiring a lawyer now the servicer won’t speak with me (legally can’t I guess) yet the foreclosure mill lawyer has not spoken with my lawyer yet to negotiate some kind of mitigation.

    This forces the homeowners down the only path that I can see which is hire a lawyer and sit in the house until somebody somewhere on the bank’s end pops up to negotiate.

    I get that the banks don’t own the obligation thus can’t negotiate. I get that. I just wish the media would. I am in the middle of it and can now see more clearly what is going on.

  37. I think if you could provide proof that the “alleged” trust your loan was put in was either never set up or closed you would have a strong case.

    Does anybody out there know where to go to look this info up? My trust stopped reporting in 2008? So does that mean it died or was it just bought up by a GSE? Nothing shows on Edgar after that year on my trust.

    If you can prove the trust is dead what right can the trustee direct it’s agent (servicer)to foreclose? or can it foreclose?

    Assuming the loan being transfered to the Servicer makes it a Non QFC and you are successful at stopping the servicer with this can the trustee (on behalf of the trust) still attempt to foreclose? Once it’s converted from a QFC to a non QFC can it go back to be a QFC? or once it’s broke (uncollectable) is it always uncollectable?

    Someone please explain this if you have knowledge of this?

  38. Principal reductions to current market levels would benefit all parties except the bank/servicer. It would also prevent a lot of foreclosures. However, a Modification with the wrong party is worthless. Additionally, when you enter or apply for a Modification you agree to waive all your rights for a chance to be modified. This is why I never applied for a loan mod on my primary.

    The servicer originally told me that the Mod is submitted to the “investors”. Later their story changed and they said that they are authorized to perform Modifications.

    A couple years ago when I was paying the servicer (before they told me that they didn’t “own” the loan) I was advised by the servicer that I could submit a modification but it wouldn’t be approved because I was current. So yes they advise you to go past due and then claim you are in default. (Which maybe true but who are you in default too? The defunct originator who has already been paid? The Sponsor, Trustee, or Servicer who all got TARP funds and bought CDS?)

    True your loan has already been paid but judges are not buying it. It also seems acceptable to assign the DOT separate the note via MERs from a defunct/bankrupt entity (who by the way probably wasn’t the real party who leant you the $ anyway) to the current beneficiary (I mean after all it was being tracked in the MERs database this whole time and by the way you agreed to this process when you signed your deed of trust allowing MERs to be the Nominee of the lender).

    Sorry just had to vent a second

  39. My mortgage is not filed. Never got the real deed. But…many mortgsages fild under my address & my name. Many different title companies & variations of my name & address.

  40. Check out Abeel vs. Bank of America

  41. Blah blah blah…HAMP? ARE YOU KIDDING ME?…sigh:

    From ANONYMOUS—re. Brian Davies case:

    Brian Davies attorneys claim 2 “facts” that are simply not correct — 1) that somehow “investors” funded the mortgage loan and 2) that if someone else is making payments on the loan the borrower is not in default.
    First, “certificate purchasers” are the banks themselves (security underwriters), and they only purchase a “pro-rata” share to a “pool” of cash flows —- that is all — they are NOT the mortgagee/creditor—the trust is assigned the loans from which the pass-through cash flows are derived—it is the DEPOSITOR (subsidiary), that owns the collections rights (they are not mortgage loans), and the Trust itself. The “certificate purchasers” (the bank security underwriters (another subsidiary) themselves) then repackage the certificates to “pro-rata” cash flows into CDOs that are marketed to security investors — who are also never the mortgagee/creditor. According to all PSAs — there must be a documented valid sale of the “loans”, with supporting Mortgage Schedule to the Depositor in order for any Trust to be valid. There was never any valid sale of loans — and the loans were never actually loans — they were collection rights.
    Second, since the “loan” refinances (subprime/alt-a), and jumbo new purchases were non-compliant and non-performing manufactured defaults, no funding at all was necessary (except for the cash-out for the loans). The warehouse lines of credit never actually transferred any actual cash for funding. These lines of credit were simply “credit lines” that the “Depositor” would provide to their correspondent lenders. Once the “loan” refinance origination was completed the Depositor would then reverse the “credit” owed by the correspondent (originator). This never involved any actual deposit of cash proceeds —- the “funding” payoff check is never “deposited” into any bank account. The check is routed to a security derivative clearing house — who then simply cancels the credit-line transaction.
    Third, it is not productive to state that since someone else was actually making payments on the “loan”, “albeit” not the borrower, that the loan is not in default. Courts do not care about this — they only care if the borrower is in default. However, if the actual party does not come forward claiming that the debt is owed to them, and the actual party cannot prove how they came to own the collection rights — borrower does not owe the debt to anyone. That party is never going to able to demonstrate that collection rights belong to them because they would have to divulge the above fraudulent process and that the “mortgage loan” from onset was not a mortgage but, instead, collection rights. This admission would also mean that the “debt” is unsecured and can be discharged in BK.”

  42. Testimony cont’d:

    6 Since all of you in Congress are in the pockets of Wall Street, I understand that this hearing is merely more really bad summer stock theater, as years have gone by with no results whatsoever. But it is an election year, and it’s vitally important now more than ever to appear to care about deadbe…uhm…voters, as if they or their vote actually matters.

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