Why Is the PSA Relevant?

Many judges in foreclosure actions continue to rule that the securitization documents are irrelevant. This would be a correct ruling in the event that there were no securitization documents. Otherwise, the securitization documents are nothing but relevant.

There are three scenarios in which the securitization documents are relevant:

  1.  The party claiming to be a trustee of a trust is claiming to have the rights of collection and foreclosure.
  2.  The party claiming to be the servicer  for a trust is claiming to have the rights of collection and foreclosure.
  3.  The party claiming to be the holder with rights to enforce is claiming to have rights of collection and foreclosure. If the party claims to be a holder in due course, the inquiry ends there and the borrower is stuck with bringing claims against the intermediaries, being stripped of his right to raise defenses he/she could otherwise have made against the originator, aggregator or other parties.

The securitization scheme can be summarized as follows:

  1.  Assignment and Assumption agreement:  This governs procedures for the closing. This is an agreement between the apparent originator of the loan and an undisclosed third-party aggregator. This agreement exists before the first application for loan is received by the originator, and before the alleged “closing.” It governs the behavior of the originator as well as the rights and obligations of the originator. Specifically it states that the originator has no rights to the whatsoever. The aggregator is used as a conduit for the delivery of funds to the closing table at which the borrower is deceived into thinking that he received a loan from the originator when in fact the funds were wired by the aggregator on behalf of an unknown fourth party. The unknown fourth party is a broker-dealer acting as a conduit for the actual lenders. The actual lenders are investors who believe that they were buying mortgage bonds issued by a REMIC trust, which in turn would be using the money raised from the offering of the bonds for the purpose of originating or acquiring residential loans. Hence the assignment and assumption agreement is highly relevant because it dictates the manner in which the closing takes place. And it demonstrates that the loan was a table funded loan in a pattern of conduct that is indisputably “predatory per se.” It also demonstrates the fact that there was no consideration between originator and the borrower. And it demonstrates that there was no privity between the aggregator and the borrower. As the closing agent procured the signature of the borrower on false pretenses. Interviews with document processors for both originators closing agents now show that they would not participate in such a closing where the identity of the actual lender was intentionally withheld.
  2.  The pooling and servicing agreement: This governs the procedures for collection, disbursement and enforcement. This is the document that specifies the authority of the trustee, the servicer, the sub servicers, the documents that should be held by the servicer, the servicer advance payments, and the formulas under which the lenders would be paid. Without this document, none of the parties currently bring foreclosure actions would have any right to be in court. Without this document trustee cannot show its authority to represent the trust or the trust beneficiaries. Without this document servicer cannot show that it performed in accordance with the requirements of a contract, or that it was in privity with the actual lenders,  or that it had any right of enforcement, or that it computed correctly the amount of payment required from the borrower and the amount of payment required to be made to the lenders. It also specifies the types of third party payments that are made from insurance, swaps and other guarantors or co-obligors.
  3. Of specific importance is the common provision for servicer advances, in which the creditors are receiving payments in full despite the declaration of default by the servicer.  In fact, the declaration of default by the servicer is actually an attempt to recover money that was voluntarily paid to the creditor. It is not correctly seen as a declaration of default nor any right to demand reinstatement nor any right to accelerate because the creditor is not showing any default. It is a disguised attempt to assert a claim for unjust enrichment because the servicer made payments on behalf of the borrower, voluntarily, to the creditor that are not recoverable from the creditor. Usually they make this payment by the 25th of each month. Hence any prior delinquency is cured each month and eliminates the possibility of a default with respect to the creditor on the residential loan.

It is argued by the banks and accepted by many judges that mere possession of the note sufficient to enforce it in the amount demanded by the servicer. This is wrong. The amount demanded by the servicer and does not take into account the actual payments received by the actual creditor. Accordingly the computation of interest and principal is incorrect. This can only be shown by reference to the securitization documents, including the assignment and assumption agreement, the pooling and servicing agreement, the prospectus and supplements to the PSA and Prospectus.

For more information please call 520-405-1688 or 954-495-9867.

57 Responses

  1. usedkarguy, I missed a lot of stuff admittedly. What is the value of an undisclosed funding source? Is this to say not disclosing a funding source is violative of ?

  2. IF these particular notes are subject to Article III’s holder in due course provisions (and that’s a big IF), that law might be applicable. It was formulated to protect an innocent good-faith purchaser of a note from other’s misdeeds, prior to his good faith purchase withOUT notice of the misdeeds AND for value. A promise to pay in lieu of actual payment precludes one from claiming hdc status.
    lay opinions.

  3. Neil said:
    “If the party claims to be a holder in due course, the inquiry ends there and the borrower is stuck……”

    Don’t believe it. The inquiry doesn’t end there, altho it does limit one’s defenses to the note, and imo, NG is inartfully, if not worse, inaccurately, saying the borrower has to find a diff line of attack against certain bad acts by those other than the current alleged holder in due course (like fraud in the inducement, no contract, lending violations, illegaility of purpose of contract, i.e., did the original lender mean to bind a borrower to a predatory and thus illegal loan?) It’s my limited understanding that when the object of an agreement is illegal, the agreement is void or at least unforceable.
    Whether or not a holder is subject to all defenses is a rather large issue, a key issue. There MAY be a presumption a holder is a holder in due course, but it’s certainly rebuttable, and also, imo, that presumption, while once perhaps warranted, no longer is. But it WILL be up to the borrower most likely to artfully defeat the ‘old’ presumption.
    I don’t believe a mere assertion from a hidc makes a claimant such, that it’s now a fact in evidence as a result of a claimant’s allegation (which they by and large don’t make, anyway: request for more definitive statement: claiming as holder or hdc?)
    these are strictly lay opinions

  4. cookies, I got Christine’s e-mail last week. Nice for her! This is not easy, as you know.

  5. Dwight, after threatening the title agency with being a defendant in the fraud suit, he was quick to share the information from the closing file that showed Deutsche Bank Trust Company Americas issued a sight draft (appearing to be a cashiers’ check) to fund the closing on the Wells Fargo Home Mortgage loan. (undisclosed funding source)
    I mention title in that the assignments were never made to the Trustee until after our foreclosure was closed. Two other assignments appeared during the bankruptcy proceedings. I found one by going to the Recorder of Deeds. The foreclosing lawyers didn’t even know the assignment existed, but chose to rely on it after it was entered into the record. The filed the 3rd assignment with their proof of claim.
    Dummies. Because I’m in Wisconsin, we are owners at law and in equity FIRST, mortgage is a lien that must be proven at foreclosure.

  6. My cookie. Why do you say to get both spouses on Note ????…..it seems to me, it’s a much better fight to have one spouse fight the Fraudclosure and the other spouse fight for the Note/Mortgage.

  7. My friend Christine has Chase on run, 🙂

  8. Speaking as a stable fund invester . . .Gov settles for billions with BOA for securites fraud over unfunded trusts. As a taxpayer I am screwed. As a soon to be title holder, I have to burn the biskets of a estate attorney and a title attorney/escrow agent. To many bad apples, who wants to liquify them and make cider? Cider is great when your in a pissing match. TeeHeeHeeHe

  9. In my state its wise to get both spouses on the note. It could bite you in grass later. State Laws Vary. Hire an attorney in the jurisdiction the property is located.

  10. No John Doe here. Served as Jane Doe. Also served as current wife and/or cival union partner after 35 yrs of Marrage. Now that’s something the attornies, the judges and myself find amusing. My husband not so much. Many Blessings to All!

  11. Thank Heavens NO existing liens of record here. If keeping the house means the title to our life estate is in trust irrevocably, we don’t want the house. Mortgage in lien theory state. Fraud on the face of contract and in the inducement @ origination. State laws vary. Unfunded Trusts

  12. Creation of Estate aka Corp. Legal name in persona, all Caps epual Corp. Not an attorney. But you need one!

  13. Warrented via warranty deed for existing liens of record. Warrented title I never got. Makes you think. Hmmm. . .

  14. Title to Estate equals 1.49 million. Transferred irrevocably free n clear. , loan 149,000. Highway robbery!

  15. Title to what? The life estate or the house? One you gave away, the other you didn’t get. You can not grant or convey something you don’t have. That’s a problem!

  16. Any one watch ” house of cards” Kevin Spacy is Alexander who is the confidence man per se. I’m not sure whether thus show is to desensitize us or make us see the cold stone heart of ” politics” I’ve just got to episode 6.

  17. kar guy, you said … Expose the undisclosed funding agent and the lack of title and you should have a chance …

    what do you mean by that? how do you expose the undisclosed funding agent and the lack of title? I need a quick lesson. Thanks.

  18. “We don’t ever see anyone on TV talking about this travesty…”

    it’s called advertising revenue from the national banking associations. This golden egg will never be tarnished at the hand of the broadcast or cable media.

  19. After 7 years it’s coming down to the note and lack of valid assignment. All the other esoteric crap gets you nowhere. Expose the undisclosed funding agent and the lack of title and you should have a chance. Or not. Don’t expect anything other than trickery and hostility from your local BK judge.

  20. You are right, and I will fight the good fight. It’s a huge injustice taking place in the courts regarding the issue of the true party in interest. The settlements and Consent Orders lift the veil enough to show that the “powers that be” know for a fact what really happened, and are aware that the true parties in interest are not the parties who are in court stealing American citizens homes and property. The government knows it, the Dept of Justice knows it, the Judges know it .. yet it is allowed to continue. A very few Appeals Courts have brushed the issue here and there, but without much effect overall. Why has this never made it all the way up to the Supreme Court to consider? It sounds like a basic miscarriage of justice and a fundamental due process right that is being denied of homeowners facing foreclosure. The justice system has decided that they will change the rules of 200 years of case law regarding what constitutes legal standing and the true party in interest , and twist it’s relevance around in order to make it fit an agenda of the elite, the power brokers of the financial world and the corrupt politicians who have decided to circumvent the law and make the little working class homeowners pay for the crimes of these corrupt leaders.

    It’s hard to wrap your head around, the fact that we hardly see anyone in power and authority fighting back against this and exposing it for what it really is , which is an attack on the integrity of our entire judicial system. What has happened that we have nobody left leading this nation who has the integrity to stand up and make noise about this?
    They are all on-board , knowing that they are allowing Judges to ignore the long-held basic issues of legal standing, true party in interest and fraud upon the court when reviewing the facts of a case.

    We don’t ever see anyone on TV talking about this travesty, where a whole segment of society has been unfairly targeted for injustice under our system of law. it would be like if they decided to target any group of people and discriminate against them in the courts , what would happen if they said that they don’t like overweight people who are the victims of robberies? And the courts followed the lead of these hateful power brokers and denied the overweight victims of due process of the law, and twisted the definitions and meanings of the law in order to prevent them from obtaining justice ?? This is what they are doing to homeowners facing foreclosure .. they have decided that they hate us enough to deny us the law. They rationalize it and try to justify it as being done for the greater good of society and preservation of the financial system . But at the end of the day they are attacking and destroying American citizens by denying them of their rights in a court of law. Citizens whose fore-fathers have died and bled for this nation of laws and for the rights of its citizens. This is our country, it is our legal system that these financial terrorists have hijacked.
    They have sold their souls to the devil, and we’re seeing it play out before our very eyes in foreclosure court rooms everywhere. This is what your leaders say behind closed doors > “Let them eat cake ! Let them live underneath a bridge with their children, we have a financial industry to protect and wars to fund and billions of dollars to give around the world .. we have election campaigns to worry about and emails to delete .. and you want justice ?? You want your home?? Well the banks are too big to fail , and you citizens are too small for us to worry about” … We are in desperate need of some good leaders, men and women who are not afraid to stand up and fight for what’s right.

    And back to my earlier question .. not one of these foreclosure issues regarding true party in interest , legal standing, fraud documents, fabricated fake notes , etc .. none of these things has ever reached the supreme court ??

  21. Ian you are absolutely right but people just want their home why people can’t get their head around what the banks and government have done to the home ownership fuzzy feeling is because it’s so darn hard to believe, it’s such a tainted issue
    clouded title – expensive rental and Dwight you can’t plead ignorance if the real,party in interest comes after you in say 7 yrs down the road they’ll bring your prior history and turn it on you for their benefit. Here’s the dilemma inherent of non truths the truth has a nasty habit of prevailing no matter what, I believe that.

  22. DwightNJ- if you do a short sale, try to find out what legal right a mortgage servicer(pick one, any one) has to sell your property. Absent all the forged, backdated, fabricated paperwork on your county court instrument summary list, the answer is: none.

  23. I still don’t understand why a PSA is relevant if:
    1. There is no trust
    2. There are no mortgages or anything else in the nonexistent trust.
    3. There are no mortgages in the trust, so neither the master servicer nor the subservicer(s) have any loans to service, nor do they have any other responsibilities available to them due to the nonexistent loans I the nonexistent trust.
    4. As the trusts seem to have singlehandedly broken every law, rule, guideline under both IRC or NY trust law, what in hell are these judges ruling on?
    Vapor? Suggestions? Ideas? Hearsay?

  24. http://www.law360.com/articles/548153/11th-circ-dismisses-jpmorgan-foreclosure-doc-fraud-suit

    This was Jeff Barnes case. No matter how well you plead RICO with specificity, they always say “not plead with specificity”. These judges are protecting these banks at all costs.

  25. I would opine that the swaps purchased by ML 1 where Bear was involved proves trigger event occurrence?

  26. NPV: Here’s what, but why? I have my suspicions.

    Purpose: ML III LLC was created to alleviate capital and liquidity pressures on American International Group, Inc. (AIG) stemming from credit default swap (CDS) contracts written by AIG Financial Products Corp. (AIGFP) by purchasing $29.3 billion in multi-sector collateralized debt obligations from certain AIGFP counterparties, enabling AIGFP to terminate the associated CDS.
    Terms: The New York Fed lent ML III LLC approximately $24.3 billion. The loan has a 6-year term and accrues at 1-month LIBOR plus 100 basis points. AIG contributed $5 billion of equity to ML III LLC. AIG’s equity interest accrues interest at 1-month LIBOR plus 300 basis points.
    Investment Objective:: Repay the New York Fed’s senior loan (including principal and interest), followed by AIG’s equity interest (including accumulated preferred distributions representing interest) for as long as the United States Treasury maintains an economic stake in AIG on behalf of the United States taxpayer, while also striving to maximize sale proceeds and refraining from disturbing general financial market conditions.
    On June 14, 2012, ML III LLC repaid the loan made by the New York Fed, with interest.
    On July 16, 2012, net proceeds from additional sales of securities in Maiden Lane III LLC enabled the full repayment of AIG’s equity contribution plus accrued interest and provided residual profits to the New York Fed.
    On August 23, 2012, ML III LLC sold all remaining securities. Subsequent to the repayment of ML III LLC’s liabilities to the New York Fed and AIG, net proceeds from sales of the securities, as well as cash flow the securities generated while held by ML III LLC, provided a net gain of approximately $6.6 billion for the benefit of the U.S. public.

  27. Tolle, you’re right about that. When the prime borrowers start to somehow end up in foreclosure because of servicer fraud, they’ll start to get it. All the holier-than-thou ruling classholes are in for a shock: they’re not protected from this fraud.
    How are you, buddy?

  28. Somehow, I doubt you have ever read more or examined more trusts. I have read 3 & 9 and have also proved that the notes are not qaulified as bearable instruments. It’s one thing to read… it is entirely different to pluck from the pool, and frame the tranches. You are wrong and have absolutely no idea what you are talking about.

    Answer one question before responding.. What did Maiden Lane III, LLC purchase, and why?

  29. “There are many ways to prove that the loans went into a Trust as the Ibanez Court even said. Also Minnesota Courts.”

    I’m all ears Gene, waiting for you to dazzle us with your brilliance, or in the alternative, attempt to baffle us all with your bullshit. Your call.

    I, for one, want to know what you’re referring to when you state the above, especially in your reference to MN courts, as I’ve yet to see them have any desire to even address the issue of securitization, excepting that it’s out of reach as a borrower defense. They might as well be saying….DO NOT GO THERE! Not only do you not need to be the note holder in MN, they simply don’t care who is, even though it will undoubtedly come back to bite every single borrower in that state in the ass.

    What exactly are you saying?

  30. Iwantmynpv,

    I have read more of the documents than you can ever imagine, from more trusts than you can ever conceive.

    You are practicing confirmation bias, based upon what you want to believe. You ignore UCC Code in its entirety and ignore practical evidence, etc.

    There are many ways to prove that the loans went into a Trust as the Ibanez Court even said. Also Minnesota Courts.

    Garfield poses this garbage because he simply wants to sell products to people, even though they are worthless.

  31. Dwight, hire an attorney, you have a slam dunk case, you won’t be sorry. Take it from a non borrowing spouse aka. One half of the Estate.

  32. Dwight NJ Go to www afnetwork.org and get hooked into the group calls on Thursday nights. Only $5. a month to join. Lots of NJ folks on the calls. Lots of info at their website.

  33. Thank you NPV .. will look into it.

  34. Deborah wynn , Great advice , I appreciate that. Thank you.

    I know it’s a longshot and I will have to deal with whatever happens. Even if I lose the argument and the Judge refuses to acknowledge the issues talked about here on this blog, I will still try and reach some sort of mediated mortgage modification if possible. If all else fails, will even consider doing a deed in lieu of , or a short sale, whatever .. so as not to lose the case and end up with a foreclosure on our record .. if we’re going to lose the house anyway .. why not try and see if they would work a deal?

    I have spoken to a handful of “foreclosure defense” attorneys, and none of them seem to have any passion , desire or enthusiasm to fight the hard fight … and I seem to have more knowledge than they do in regards to the issues that Neil posts about on this blog. Most of them are basically asking around 3,000 up front to write the answer (750) and maybe a motion for discovery (750) and a reply to their motion for summary judgment (750) and then they tell me it will be hundreds of dollars an hour if it gets into depositions, etc. .. other lawyers simply want to help you thru the modification process …that’s their goal … only one attorney out of Atlantic City seems to understand the issues, his name is Michael Jacobson .. he had one of the foreclosure defense website lawyers who has a blog show up and help argue his case and they got a dismissal without prejudice .. but it’s all about the money and whether you can afford them. Maybe I should ask him about a possible predatory lending case in regards to how they approved my wife .. and a contingency ?

    Like you said , I understand the argument , I just don’t understand the procedures and how to utilize the system .. maybe a lawyer or paralegal would help me with the procedural end … but I’m out of time, the answer is due back by the end of next week.

    I did pretty well last time in front of this Judge, he ended up throwing me a compliment and told me that I did a better job than most lawyers.

    But you are correct in that we all must keep living our lives and trying to remember to be thankful to God for whatever we have been blessed with. God Bless you and thank you for your words.

  35. Dwight, go the Fannie Mae Loan Look-up. Fannie Mae loans are also securitized loans (agency tranches). Because Fannie and Freddie were on their way out of business back in 02 / 03 they hired that mutt Newt Gingrich to lobby congress. Sure enough, Congress responded by lowering guidelines, thus, allowing the former GSE’s to participate in this fiasco, and to continue being the huge Washington slush fund that it is.

    Do yourself a favor read about the Fannie corporate side and the fannie trust side of their business, and look at the terms GSE Bonds and Master Trust Agreement. Look at what a guarantee is and the difference between an MBS and a whole loan purchase.

    After you are done reading, hire an attorney – put in an answer with limited affirmative defenses. Most important, unlike what Lord Garfield tells his apostles on this site – admit to the fact that you intended to enter a financial contract with the closing bank, and not the Plaintiff.

    Good luck buddy.


  36. Dwight
    Know that courts and judges have little tolerance for “pro se ” it’s frustrating for them but we do our best and I worked hard to follow the rules timelines and to stick to the issues.
    I found some direction with Nolo legal books there’s one called ” how to represent yourself in court” and I bought Thompson West frcp used online, for 50 bucks. The latest edition is best but obviously more expensive, I believe judges use the Thompson west. You are allowed to get help- perhaps consider hiring a free lance paralegal , just have them sit with you for an hour at a time or assist in researching pertinent case law.
    I feel your pain. I have googled and it’s triggered further research and I pray to the higher power for divine guidance. I’m still batting.
    Best of luck.
    Proper council experienced in the fields of contract, real property rights and even commerce is best but you are right not cheap and very few will do on contingency- that’s the reality in my hood. Baby steps hold on tight. Take the disappointments and the little victories for what they are, sometimes you have to loose a battle to win a war. Don’t mean to feed you cliches but if you try not get too serious about the challenges life gives you aka destiny, your learning will be easier with less resistance, take pressure off yourself and say – this is a learning experience and all experience in life is good- because we grow. ( and I’m trying to take my own advice :)) each day.

  37. Cookie … I was served by a private server on a Sunday morning after we arrived back home from church. My wife is named as the main defendant since she was the only one who signed the Note, but she was not served. Some guy caught me by surprise that Sunday morning as I wasn’t even thinking it would happen on a Sunday. He knocked on the front door and when I opened the door he blurted out my name and nervously handed me both sets of the complaints, the one meant for my wife and the one meant for me … he never waited for a response, it was just a quick bang-bang thing where I instinctively reached out my hand as he was handing me a stack of papers … at first I thought it was a guy from our homeowners association as they have been handing out flyers recently about meetings. He apologized and walked away like he wanted to get away before I realized what it was about. So my wife was never actually served, and like I said, the refinance was primarily in her name because I had past credit card issues that prevented me from being included in the application process, they only had her sign the note. They asked that both of us sign the mortgage.
    The letters of our name appear to be in all caps, what does that mean?
    Do we risk raising affirmative defenses later if we don’t answer now?
    Also, the lame Notice of Intent doesn’t seem to live up to what its supposed to be .. very lame and missing contact info of someone we can contact to discuss the alleged debt. It lists Wells Fargo as the creditor.

    When I have spoken to WF in the past, they have said that they do not own the loan, they say Fannie Mae is the investor.

    I would be a nervous wreck about not answering the complaint, thinking I wouldn’t get a chance later to argue all my points?

  38. Dwight, when you were served did you get served by sheriff or private service? Having the sheriff dept serve false docs is a no no. Did you sign when you were served? Were you served with your name in all Capital letters? If you served using a private process server with dos with names in all caps that you didn’t sign for .. Don’t answer it. When they file MSJ you attack. Get an attorney. Go to legal aid if you can not afford one.

  39. Let me through this at ya – I got letter from services 5 yrs ago unsigned and that services went into receivership but they wrote letter after I requested to know who the owner of my loan- ( that’s best I could do 5 yrs ago) but reply was ” Wells Fargo is the investor and owner of your loan”. Ha ha

  40. Dwight
    “Fannie Mae is the investor” – is that fact or hearsay ?

  41. Seeking and help or advice on how to structure my answer to the complaint.

    1) Do I deny and list all of my affirmative defenses in detail, with my entire argument and points?

    2) Do I deny and counter-claim ? Not sure what that even means.

    3) Do I deny and list affirmative defenses .. and then file a seperate lawsuit? against only the servicer/ alleged holder ??

    Do I need to show all my cards in the answer ?

    Is it important to raise any issues now in the answer, due to not being able to raise them later during a hearing on my answer?

    Thank you .. Pro Se .. cannot afford an attorney .. tips appreciated

  42. What about someone in my position, where the servicer only tells me that “Fannie Mae is the investor” ?? I guess my whole argument has to be based on speculation because they don’t show me the proof of what happened to my Note? It still does not dismiss them from their burden of proving themselves as the true party in interest, will be my response. We have to see all the documentation and money trail to establish that.

  43. Ha ha my typos will get me in trouble – that was “paid ” ( not laid) the loan off

  44. Contractually npv
    I signed for a ” conventional mortgage loan” based on a loan to value understanding. That my title would be clean if I laid the loan off and that my investment was sound based on what they represented at the time, I relied on them.

  45. Everyone should read the issuing entity’s filings very carefully. I have been telling you for years to look at one simple thing – look at who the Originator of the loans actually be-ith.

  46. Gene, have you ever read the underwriting agreement. If the loans are not conveyed to the trustee, what exactly is is that the Master Service Agreement controls?

  47. Dwight
    First the court/ judge must READ what is submitted.

  48. Reminder – justice – the most good for the most people. Stealing homes is not good for the most people.

  49. Dwight said:
    “DwightNJ, on June 18, 2014 at 1:06 pm said:
    Neil did a post on the “Presumption Rebuttal” , which should allow for the Courts to demand that all documents related to the origination, sales, transfers, negotiations, securitizations, PSA’s , etc., etc. , be produced so that a lawful and just determination can be made as to who the real party in interest is”

    Exactly. If someone takes my home then there better not be any future claims from the real pArty in interest. My suits plead well that we can’t be sure since the controversies I explain in prior pits is the tip of the iceberg and particular to my case but the bottom line is the same
    Truth seeker. Justice. Preservation of our due process rights and our right to defend be treated equally under the governing laws.

  50. I guess homeowners are not Winning any battles because the banks own the judges and the courts??

    Wells Fargo, who never sent me one bill EVER, yet reported me as making mortgage payments to them just sent me a loan history for 2013 – 2014.

    Principle Balance Zero

    There are several 9,999.99 transactions (2) and another on in the 6,999.99 range. Title company said FRAUD RED FLAG.

    But yet they foreclosed on my house last month and filed a TDUS saying they were there in person and paid cash. NOT…!!!!!

    Please tell me why these banksters are not going to jail for felony grand larceny?

    Cynthia 805-689-7384

    Sent from my iPhone

  51. Neil did a post on the “Presumption Rebuttal” , which should allow for the Courts to demand that all documents related to the origination, sales, transfers, negotiations, securitizations, PSA’s , etc., etc. , be produced so that a lawful and just determination can be made as to who the real party in interest is. Establishing the true party in interest should be fundamental to any foreclosure case. The old case law that most of these Courts rely on doesn’t really pertain to what is happening here in the present, with the securitization scheme. We have Judges ignoring the true underlying arguments regarding securitization, origination, PSA’s , etc. … and pretending that none of it matters. They point to old antiquated decisions regarding property title and Notes as their way of justifying the foreclosure. The old cases didn’t have the securitization criminal elements that todays cases have, and it’s unfair and denies a citizen their due process if the Court refuses to look at the facts of securitization in order to arrive at the truth. This is turning into a Constitutional Rights issue that probably needs to be settled by the Supreme Court. The question being .. do we as citizens, have the right to expect the justice system to acknowledge and understand the aspects of the securitization scheme and how it causes injury to the victim homeowner/borrowers ? If the Courts refuse to accept the fact that securitization was a scheme full of wrongs and deceptions, then justice will never prevail. The Justice system is part of the problem and has joined the banks in perpetuating the wrongs and injuries of the securitization scheme. What will it take and by what legal method can we force the lower courts to acknowledge this problem? This isn’t about lawmakers creating new laws … this is about the Courts not performing their duties in administering and enforcing the laws that are already on the books regarding loans, originations, predatory … and the courts refusing to dig deeper and peel back the layers of the onion so that the truth can be revealed in court. The Judges are hindering and outright denying the process of discovery, preventing the truth from being revealed, preventing the homeowner of his due process.

  52. By the way – I motioned to set aside ( unlawful detainer suit) and then joinder. Of jane and John does 1 thru 10 ( aka assigns and successors) corporations 1 thru 10 and other unknown ” entities” 1 thru 10. It’s the only way to completely litigate this crazy action THEY filed
    And they have burden if proof.

    Not legal advice just sharing as a pro se individual. Don’t rely on what I say please seek an attorney to help you with your individual property rights issues.

  53. Neil said
    “There are three scenarios in which the securitization documents are relevant:
    The party claiming to be a trustee of a trust is claiming to have the rights of collection and foreclosure.
    The party claiming to be the servicer for a trust is claiming to have the rights of collection and foreclosure.
    The party claiming to be the holder with rights to enforce is claiming to have rights of collection and foreclosure. If the party claims to be a holder in due course, the inquiry ends there and the borrower is stuck with bringing claims against the intermediaries, being stripped of his right to raise defenses he/she could otherwise have made against the originator, aggregator or other parties.”

    Now may I add
    The sec trustee is on the one hand representing itself as representing itself as trustee of MBS ( no actual sale or purchase of real estate trustee handles claims to cash flow from pools of mortgage loans- securitization), this is in my federal suit
    However on the other hand in state court action re unlawful detainer this same trustee is representing itself as a BUYER of property, thus shows a contradictory stance. I suggest everyone who reads this and has been foreclosed upon in AZ go check the records for an unlawful detainer action against you ( I was not served I only recently discovered this shall we say “legal anomaly” ) in State court- I can’t be the only one I refuse to believe that this has not been done to a great many. And also the unlawful detainer action is properly brought in justice court as it is a right to possession issue and involves less than 10k.
    Also look at any 1099a because that says in my case lender is- now we have a problem here. ( I refuse to believe they are lender and have raised it with IRS)
    gO get a certified copy of any judgements you find and consult an attorney if you see what I see.

    Not an attorney so please don’t rely on what I say go research if you care ( pro se having the fight of my life)

    Over to Gene, I’m not Neil Bashing that does not serve but remember all cases are unique and the courts will do what they will do so supporting case law and your state rules must be considered- AZ is tough.

  54. and why isn’t anyone going after all the securitiy laws that these bank did fraud . they didn’t follow any sec laws. ?????

  55. Gene, regardless of the Master Trust Servicing Agreement, the actual predatory fatal defect to the loan happened at the origination as Neil pointed out, do you agree with that much?

    If what you are promoting was true, in regards to the Master Servicing Agreement being the cure for all of the criminal elements involved in the securitization Ponzi scheme , then none of the banks would have agreed to the billion dollar settlements or agreed to the Consent Orders so they would not face criminal charges, correct?

    The settlements under threat of criminal charges and prosecution must represent some major wrong-doing on the banks parts , what are you saying Gene? That no crime exists? Please explain. Thank you.

  56. the question i have is , were can anyone get a copy of the assignment and assumption contract from originator, and warehouse lender, i do have a copy of the warehouse lender letter of credit at closing. and i see it , the first assignment is to warehouse lender having a lien.also look at this.

    Warehouse line of credit
    From Wikipedia, the free encyclopedia
    A warehouse line of credit is a credit line used by mortgage bankers. It is a short-term revolving credit facility extended by a financial institution to a mortgage loan originator for the funding of mortgage loans.

    The cycle starts with the mortgage banker taking a loan application from the property buyer. Then the loan originator secures an investor (often a large institutional bank) to whom the loan will be sold, whether directly or through a securitization. This decision is generally based on an institutional investor’s published rates for various types of mortgage loans, while the selection of a warehouse lender for a particular loan may vary based on the types of loan products allowed by the warehouse provider or investors in the loan approved by the warehouse lender to be on the line of credit.

    After an investor has been selected, the mortgage banker draws on the warehouse line of credit to fund a mortgage and sends the loan documentation to the warehouse credit-providing institution to act as a collateral for the line of credit. The warehouse lender, at this stage, perfects a security interest in the mortgage note to serve as collateral. When the loan is finally sold to a permanent investor, the line of credit is paid off by wired funds from this permanent investor to the warehouse facility and the cycle starts all over again for the next loan.

    Typical durations that loans are held on the warehouse line, called dwell time, range based on the speed at which investors review mortgage loans for purchase after their submission by mortgage banks. In practice, this length of time is generally between 10-20 days. Warehouse facilities typically limit the amount of dwell time a loan can be on the warehouse line. For loans going over dwell, mortgage bankers are often forced to buy these notes off the line with their own cash in anticipation of a potential problem with the note.

    The International Finance Corporation has set up warehouse lines of credit around the world and has developed a guide on how they work.[1]

    Warehouse lines of credit play an important role in making mortgage loan market more accessible to property buyers since many mortgage bankers would not be able to attract sufficient amount of deposits that are necessary to fund mortgage loans by themselves. Therefore, warehouse funding allows the loan originators to provide mortgages at more competitive rates.[2] Unlike in other types of lending, loan originators earn more profit from origination fees rather than interest rate spread since the closed mortgage loan is sold quickly to an investor.

    The warehouse funding providing institution accepts various types of mortgage collateral, including subprime and equity loans, residential or commercial, including specialty property types. The warehouse lenders in most cases provide the loan for a period of fifteen to sixty days.[3] Warehouse lines of credit are usually priced off 1-month LIBOR plus a spread.[4] Also warehouse lenders typically apply a ‘haircut’ to credit line advances meaning that only 98% – 99% of the face amount of loans are being funded by them; the originating lenders have to provide with the remainder from their own capital.[4]

    Reasons for using a warehouse line of credit include:

    Permanent Funding: Mortgage lender does not have to draw deposits – the line of credit provides permanent funding for the life of all loans in the program.
    Less Risk: No margin calls – once the asset is funded, there is no additional mark-to-market and posting of collateral.
    Unlimited Loan Volume: Warehouse line of credit program can fund an unlimited loan volume. This enables specialty lenders to enlarge their portfolios for maximum interest income and eliminates the need to manage multiple sources of capital.
    In addition, in this way the warehouse credit institution can manage an exposure to mortgage loans market without building a branch network of its own.

    Other information[edit]
    Warehouse lending can be differentiated between ‘wet funding’ and ‘dry funding’.[5] The difference is related to when the loan originator gets his funds with respect to the time at which the real estate transaction takes place. During ‘wet funding’ the mortgage loan provider gets the funds at the same time as the loan is closed, i.e. before the loan documentation is sent to the warehouse credit provider. ‘Dry funding’ takes place when the warehouse credit provider gets the loan documentation for review before sending the funds.

    An important aspect of the warehouse credit providing business is limiting fraud on warehouse lending. Main risks of fraud include dishonest and collusive mortgage loan originators, title companies, real estate agents and customers themselves, false information in the loan application (especially appraisals), forged signatures on the loan documents, and false documents of title.[6] The ‘Wet funding’ type of warehouse credit is riskier in terms of possible fraud because the credit provider will not be aware of any potential problems until after the funds are sent to the loan originator. Measures that the warehouse lender can take to limit fraud can be a strong screening process for mortgage brokers and mortgage banking companies, making sure the loan originator itself has a strong internal screening process, limiting the amount available for ‘wet funding’, and having separate account for funds coming from sale of loans to investors.[5]

    Jump up ^ International Finance Corporation – Warehouse Line of Credit
    Jump up ^ Colorado Mortgage Lender’s Association – http://cmla.com/mortgageterms
    Jump up ^ Armstrong, C. L.; McNeill, T. H.; Reynolds, J. E. (2006): “Warehouse Lending Losses Under the Financial Institution Bond”, The Fidelity Law Journal, Vol. 12.
    ^ Jump up to: a b Key Features of Warehouse Lines
    ^ Jump up to: a b Fraud in Warehouse Mortgage lending
    Jump up ^ Schroeder, G. J.; Tomaine, J. J. (2007): Loan Loss Coverage Under Financial Institution Bonds, page 336. Chicago: ABA Publishing



    Once a mortgage banker is approved, the following documentation is needed to establish the warehouse line: a warehouse line agreement, a master note and/or security agreement, UCC-1 financing statements, corporate resolutions and personal guarantees, if possible.

    The collateral securing a line of credit should have a market value in excess of the funds borrowed, so that if a default occurs, the sale of the collateral will be sufficient to satisfy the outstanding credit line.

    The original loan package – credit and appraisal documentation – is the collateral. (The funding package usually consists of a note, mortgage or deed of trust A document that embodies the agreement between a lender and a borrower to transfer an interest in the borrower’s land to a neutral third party, a trustee, to secure the payment of a debt by the borrower. , assignment, evidence of various insurance coverages and a take-out commitment letter.) Some warehouse lenders do “wet funding” advances made solely on receipt of copies of the funding package documents. The majority of the warehouse lenders we surveyed, approximately 55 percent, did “wet funding” advances: the original documents are forwarded with the completed package. Regardless of when the funding documents are received, the note must have a blank signed endorsement and a blank assignment must be filled out in recordable form.

    1. to record every mortgage assignment; as such, blank assignments are required. Recording an assignment is done by law, and by the statue’s, in the state,county, at the registry of deeds, that the property is located.

    One- to four-family residential loans are normally warehoused an average of 45 to 65 days. It is an obvious benefit to the mortgage banker to move his inventory out as quickly as possible to free up his credit capacity. Furthermore, all of our lender sources have maximum periods that a loan can be warehoused. Most range from 70 to 180 days; extremes in both directions were 30 to 360 days.


    All warehouse lenders require a funding package containing a minimum loan documentation prior to an advance. A list of these documents is normally specified in the warehouse agreement. In addition, some agreements stipulate stip·u·late 1
    v. stip·u·lat·ed, stip·u·lat·ing, stip·u·lates

    a. To lay down as a condition of an agreement; require by contract.

    b. that advances are approved only on loans with take-out commitments. Documentation required for an advance usually includes the mortgage note, a certified copy A photocopy of a document, judgment, or record that is signed and attested to as an accurate and a complete reproduction of the original document by a public official in whose custody the original has been placed for safekeeping. of the mortgage or deed of trust and an assignment. Although almost all lenders require evidence of the take-out commitment and a bailee One to whom Personal Property is entrusted for a particular purpose by another, the bailor, according to the terms of an express or implied agreement. Cross-references


    bailee (custodian) n. letter, others require some or all of the following: a title policy, trust receipt, UCC filings, truth-in-lending disclosures, HUD-1, evidence of agency guarantee or insurance, hazard and flood insurance Flood insurance denotes the specific insurance coverage against property loss from flooding. To determine risk factors for specific properties, insurers will often refer to topographical maps that denote lowlands and floodplains that are susceptible to flooding. and the mortgagors’s loan application. Some lenders provide advance request forms that must be submitted along with the funding package.

    According to according to
    1. As stated or indicated by; on the authority of: according to historians.

    2. In keeping with: according to instructions.

    3. the legal interpretations of some lenders, the UCC stipulates that a bank has 21 days to take possession of a mortgage note from the day of funding. In addition, there is a second 21-day period that extends from the time the mortgage note is delivered to the take-out investor until the investor submits the purchase funds or returns the note. These lenders believe that they have a secured interest in the mortgage during both of these periods. Of course, if the note is not delivered, the advance is considered unsecured. Most of the warehouse lenders we interviewed remit To transmit or send. To relinquish or surrender, such as in the case of a fine, punishment, or sentence.

    An individual, for example, might remit money to pay bills.

    TO REMIT. To annul a fine or forfeiture.
    2. advance funds to the mortgage bankers or the settlement agent.

    Under the terms of one program, funding could be provided to the settlement agent at the time of loan closing or borrowings could be made based on a whole loan repurchase line of credit. A repurchase line involves the delivery of a security to a dealer with an agreement to repurchase it on a specified date. Upon receipt of the security, the deal wires the haircut Haircut

    1. The difference between prices at which a market maker can buy and sell a security.

    2. The percentage by which an asset’s market value is reduced for the purpose of calculating capital requirement, margin, and collateral levels.

    1. proceeds to the mortgage banker who in turn pays down his line of credit. A “haircut” is the discount from 100 percent funding; it can be a percentage of the face value of the mortgage or the take-out commitment price. Most lenders advance funds using a haircut. Our warehouse lender group had haircuts between 0 and 10 percent with 2 percent being the norm. One lender requires a 25 percent haircut on foreclosures that occur.

    Document custodian bailee (custodian) n. a person with whom some article is left, usually pursuant to a contract (called a “contract of bailment”), who is responsible for the safe return of the article to the owner when the contract is fulfilled.

    Most warehouse lenders act as their own document custodians
    For more meanings of this word. Please see Custodian.

    The Custodians is terminology in the Bahá’í Faith, which refers to nine Hands of the Cause assigned specifically to work at the Bahá’í World Centre in attendance to the Guardian of the Faith. while others use a third-party bank as the custodian for their line of collateral. Automated tracking systems are utilized to monitor the status of the required legal documents including investor take-outs.

    Furthermore, some warehouse agreements have specific instructions for delivery of the mortgage notes and other loan documents. They may stipulate the means of delivery and the types of institutions to which the documents can be delivered.

    Various information is required by most warehouse lenders on a regular basis. Pipeline, position and aging reports can be required weekly or monthly; delinquency reports may be requested monthly or quarterly. Annual audited financial statements are typically required, although a few of the lenders we spoke with require financial information as often as monthly. Warehouse lenders require prompt notification of significant events involving changes in management ownership, legal proceedings All actions that are authorized or sanctioned by law and instituted in a court or a tribunal for the acquisition of rights or the enforcement of remedies. and similar material changes.

    Warehouse lenders normally produce several reports on the lines they have extended; they may focus on profitability, usage and collateral tracking reports. These reports sometimes are distributed to their line customers.

    It seems relatively clear after this brief inquiry why some mortgage bankers are unable to obtain warehouse lines. A basic understanding of the risks and variables involved – those of changing interest rates, obtaining the collateral and extending credit to new or poorly capitalized firms are among those that come to mind – lead some basic conclusions about this area of the business. Knowledge, extensive experience, a solid reputation and signficant net worth are major prerequisites for securing a warehouse line of credit.

    With mortgage companies continually entering and leaving the market, a lack of tight guidelines guidelines,
    n.pl a set of standards, criteria, or specifications to be used or followed in the performance of certain tasks. and controls could result in substantial losses to a warehouse lender if a mortgage banker were to close his doors. To understand the restrictive environment of warehouse lending – which we are told will continue – just look at the risks that lenders take in regard to wet fundings. Nowhere else is the importance of a trusting relationship with experienced management more prevalent than in this scenario. A warehouse lender is putting full faith and credit in his mortgage bankers by advancing funds on copies of mortgage documents. This is one of many instances where the warehouse lender is relying on the mortgage banker’s track record and experience as critical factors in the relationship. However, these items do not carry tangible monetary value. Because most mortgage bankers have limited capital, the warehouse lender is required to assume significant risks.

    So, relationships are the key to warehousing. The success of a warehouse lender’s program depends not only on providing credit at a competitive price, but also on providing prompt and quality service for credit and non-credit services. A few “extras,” we were told, include notifying mortgage bankers regarding fraudulent or problem take-out investors and facilitating the sale of a mortgage banker’s servicing. Warehouse lending is indeed a relationship business.

    The bottom line appears to be that for the small, inexperienced in·ex·pe·ri·ence
    1. Lack of experience.

    2. Lack of the knowledge gained from experience.

    in mortgage banker looking for Looking for

    In the context of general equities, this describing a buy interest in which a dealer is asked to offer stock, often involving a capital commitment. Antithesis of in touch with. a warehouse line of credit, the prospects are dim. However, two of the warehouse lenders we interviewed indicated they consider start-up shops if the principals have strong backgrounds. The lenders we polled stressed the importance of the mortgage banker’s careful, dedicated involvement throughout his business dealings – a good reputation is a must. Although there are wholesalers who will table funds for these originators, the capabilities of a warehouse line would probably be welcomed by most originators. They should establish their banking relationships with this in mind and as they grow, their banker should become an even more important part of their overall operation. After an originator has repeatedly proven his “worth,” it is likely that a warehouse lender ultimately will go out on the credit limb for him.

  57. Hey Neil,

    Why don’t you ever mention the Master Trust Servicing Agreement? Have you read it, or even know of its existence?

    The Agreement provides the Servicer or the Master Servicer the ability to service loans and identifies the actions that can be taken under different circumstances.

    Of course, reading this document would prove contradictory to what you want to promote.

Contribute to the discussion!

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