In order to understand how the banks made money creating a void and then filling it with what I call a tier 2 yield spread premium, trading withe investors money, and avoiding the trust entirely, you should read the articles relating to the Volcker rule, where “proprietary trading” is frequently put in quotation marks. The banks were essentially treating all investor money as bank money except when it came to allocating losses. When it came to creating fictional profits, those were allocated to the banks — to the obvious detriment of investors and borrowers alike.
That is because many of those trades are fictitious sales from the investment bank to the trust on paper only. They are on paper to justify the investment bank declaring the trade produced a profit when in fact there was no trade at all and the money from investors that should have been with the trust was under the total control of the investment bank.
And the relevance of that is that the investors were thus placed in the positions of direct lenders without documentation while the investment banks and their puppet corporations were left with documentation and no loans made BY THEM.
It IS complicated. But you need to work things out in your head so you can gradually hone down your message into simple analogies and buzz words. This is one more example of how investors and borrowers, getting together, comparing notes and negotiating directly could cure the mortgage crisis and allow the housing market and the entire economy to recover.
For more information call 954-495-9867 or 520-405-1688
The Volcker Rule – the conformance period is approaching
- Michael Best & Friedrich LLP
- USA
- July 14 2014
-
After nearly three and a half years, five federal agencies[1] issued final regulations regarding Section 619 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, more commonly known as the “Volcker Rule.” The Volcker Rule prohibits covered insured depository institutions and companies that control or are affiliated with those institutions (banking entities) from engaging in two main activities: (1) engaging in proprietary trading of certain securities, derivatives, commodity futures and options on these instruments, for their own account; and (2) acquiring or retaining an ownership in, sponsoring or having certain relationships with hedge funds or private equity funds (covered fund). The Volcker Rule also requires that banking entities make a “good faith effort” to start developing and implementing compliance programs and preparing for the various applicable reporting requirements.
The final regulatory rules through which the Volcker Rule will be implemented and enforced (Volcker Regulations) were release in December 2013, and went into effect on April 1, 2014. Banking entities covered by the Volcker Rule will need to implement various programs to address these regulations by July 1, 2014; however, banking entities are not required to be in full compliance with all activities and investments until July 21, 2015. While it has not done so, the Federal Reserve Board has the discretion to further extend the compliance deadline for additional one-year periods to a maximum end-date of July 21, 2017.
Are You A “Banking Entity?” – Coverage of the Volcker Rule
The Volcker Rule applies to any “banking entity.” That term is defined generally to include:
- any “insured depository institution,” meaning any bank or savings association the deposits of which are insured by the FDIC;
- all companies that control insured depository institutions or are otherwise treated as bank holding companies or savings and loan holding companies;
- any company that is treated as a bank holding company for purposes of Section 8 of the IBA (e.g. a foreign bank that has a U.S. branch); and
- any affiliate or subsidiary of the foregoing.
If you fall within this broad definition then, in general, you are subject to all of the requirements of the Volcker Rule with respect to prohibited and permitted activities. However, as discussed below, the compliance requirements of the Volcker Rule vary significantly depending on the size of the banking entity and its level of trading activities.
Prohibition on Proprietary Trading
The Volcker Rule and Regulations prohibit banking entities from engaging in “proprietary trading” of certain debt and equity securities, derivatives, commodities and options on these instruments. Proprietary trading is defined as engaging as principal for the trading account of a banking entity in a transaction to purchase or sell certain financial instruments. The key term “trading account” includes an account used for the purchase or sale of certain financial instruments principally for short-term resale, benefitting from short-term arbitrage profits, or hedging another trading account position. The rule includes a rebuttable presumption that the purchase or sale of a financial instrument by a banking entity is for its “trading account” if the entity holds the instrument for less than 60 days.
The rule and regulations provide for a number of exemptions to its prohibition on proprietary trading, including certain repurchase or reverse repurchase arrangements, underwriting and market making –related activities, securities lending transactions, domestic and non-U.S. government obligations and certain risk-mitigating hedging, including portfolio hedging.
Prohibition on Ownership or Sponsorship Interests in Covered Funds
The Volcker Rule and Regulations also prohibit or restrict a banking entity from acquiring or retaining an ownership interest in, or sponsoring or having certain relationships with a covered fund. By definition, a “covered fund” includes hedge funds and private equity funds, certain commodity pools, and certain asset-backed securitizations (other than loan securitizations). Again, certain exceptions are provided including, foreign public funds, wholly-owned subsidiaries, joint ventures, foreign pension or retirement funds, insurance company separate accounts, bank-owned life insurance, loan securitizations, qualifying asset-backed commercial paper conduits, and qualifying covered bonds.
Compliance Requirements
The Volcker Regulations (which weigh in at a substantial 900 pages in length) impose a number of detailed and highly intricate reporting requirements and compliance programs on covered banking entities. For example, the Volcker Regulations generally require that covered banking entities establish and maintain an internal compliance program that is reasonably designed to ensure and monitor compliance with the Volcker Regulations. Such a compliance program could require CEO attestation to compliance, detailed documentation of covered activities sufficient to allow government regulatory agencies to monitor activities for instances of evasion, and reporting of quantitative measurements related to investments designed to monitor certain trading activities.
While the Volcker Regulations have the potential to be burdensome for covered entities, the final version of the Regulations also seek to reduce the burden of compliance on smaller, less complex banking institutions by limiting their compliance and reporting requirements. In essence, the reporting requirements operate on a relatively sliding scale, with the burden of the requirements increasing based on the size of the banking entity and the scope of the entities participation in regulated activities. Significantly, a banking entity that does not participate in trading activity regulated by the Volcker Rule does not need to establish any reporting or compliance program at all.
The following table summarizes generally the criteria for these compliance programs and the dates by which a banking entity that engages in covered activities must establish a compliance program.
Click here to view table.
Again, the Volcker Rule contains a number of exclusions and exceptions that could shield you from or reduce your compliance requirements. These exceptions, like the Volcker Rule itself, are complex and varied. If you think the Volcker Rule may apply to you, now is the time to begin planning for compliance and to evaluate whether any exceptions apply to your organization.
Filed under: AMGAR, CORRUPTION, discovery, evidence, foreclosure, foreclosure defenses, investment banking, Investor, MBS TRUSTEE, MODIFICATION, Mortgage, Motions, Pleading, securities fraud, Servicer, TRUST BENEFICIARIES | Tagged: actual creditor, documentation without loan, loan without documentation, proprietary trading, standing, tier 2 premium, volcker rule |
No bubble market no bubble equity no way they could have induced me into signing for a loan that was over 100% of REAL market value per economic conditions at the time. They knew exactly what they were creating – Matt Tiabbi said it best a giant vampire squid!
anD if loan is unqualified to be in a certain trust ( past cut off date governed by strict New York trust law) and so the ” security instrument” became something else, then what’s the point
Just being Devils advocate.
Investors borrow from banks and they deposit their gains into banks and then the banks loan them money ( lines of credit sometimes) at very very low almost free interest rate. It seems to me to be a symbiotic relationship, now would you bite that hand that feeds. The little guy as always is left out in the cold. But this is different because they took our homes and asset stripped those of us that were full doc loans and further volcker rule hatched out of the fact that the banking industry built a bubble market with help from appraisers – kind of an admission of guilt really. I’m struggling with this investor marrying up with borrowers first they are all over the world. Certificate were sold to investors world wide unless I have that wrong. How can we get with the investors god knows I can’t get a straight answer from the servicer and when I did it defied what they did in court. And darn they are so sure so sure they will get away with it.why is that?
Again I agree that the borrowers and the investors should join forces but how do you determine who the investors are when the 10K filings do not list the name of the investors. What they list is a number that is assigned to each investor. Why all the secrecy. See below.
Can someone, anyone please tell me how to get the actual names of these investors.
Investor# Agreement Name Agreement Date
– ——— ————– ————–
73 1988-9
243 1993-5
266
267 1993-14
268 GC94-A-5
269 1987-1
270 1987-2
273 1986 GS-2
274 1986 GS-3
275 1986 GS-4
277 1993-1B
279 1993-2A
280 1993-3A
281 1993-4
282 1994-1
293 GC94-A-5
284 1993-4
285 1994-1
920 1989-1
921 1988-7
922 1998-11
923 1988-12
935 1993-1A
940 1986-1
945 1988-1
946 1988-3
962 1994-1
964 1994-2
983
994 First Boston 1987-4
G88 GSAMP 2005-SEA1 4/8/05
– ———————————————————- —————
206 HELOC 2000-A 11/21/00
238 BANKERS TRUST COMPANY 1999-1 3/4/99
239 BANKERS TRUST COMPANY 1999-1 3/4/99
240 BANKERS TRUST COMPANY – TRUST 98-4 Loan Trust A 11/25/98
241 BANKERS TRUST COMPANY – TRUST 98-4 Loan Trust B 11/25/98
243 BANKERS TRUST COMPANY – TRUST 98-4 Loan Trust A 11/25/98
244 BANKERS TRUST COMPANY – TRUST 98-4 Loan Trust B 11/25/98
246 BANKERS TRUST COMPANY – TRUST 99-3 8/9/99
247 BANKERS TRUST COMPANY – TRUST 99-3 8/9/99
248 RANKERS TRUST COMPANY – TRUST 99-4 11/17/99
249 BANKERS TRUST COMPANY – TRUST 99-4 11/17/99
256 BANKERS TRUST COMPANY – TRUST 99-2 5/20/99
257 BANKERS TRUST COMPANY – TRUST 99-2 5/20/99
259 BANKERS TRUST COMPANY – TRUST 00-2 8/17/00
260 BANKERS TRUST COMPANY – TRUST 00-1 5/23/00
261 BANKERS TRUST COMPANY – TRUST 00-1 5/23/00
323 GOLETA 98-1/BANKERS TRUST 9/21/98
432 GOLETA 99-1/BANKERS TRUST 6/9/99
477 MORGAN STANLEY ABS CAPITAL TRUST 2003-HE1 6/27/03
483 GSAMP 2003-HE2 9/8/03
486 MORGAN STANLEY ABS CAPITAL TRUST 2003-HE2 8/27/03
499 MORGAN STANLEY ABS CAPITAL TRUST 2003-HE3 10/24/03
501 GSAMP 2003-AHL 10/29/03
509 SAIL 2004-1 (PPP TO TRUST) 1/1/04
516 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE1 2/25/04
517 GSAA TRUST 2004-NC1 2/1/04
522 GSAMP TRUST 2004-HE1 4/1/04
523 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE2 4/27/04
524 GSAMP/FFMLT 2004-FF3 6/1/04
525 GSAA TRUST 2004-3 5/1/04
527 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE3 5/25/04
529 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE4 6/18/04
534 GSAA TRUST 2004-5 6/1/04
535 GSAMP Trust 2004-HE2 7/1/04
538 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE5 7/27/04
539 MORGAN STANLEY ABS CAPITAL TRUST 2004-NC6 7/30/04
545 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE6 8/26/04
546 MORGAN STANLEY ABS CAPITAL TRUST 2004-NC7 8/30/04
547 Morgan Stanley ABS Capital I Inc. Trust 2004-5AR 9/1/04
548 Morgan Stanley ABS Capital I Inc. Trust 2004-6AR 9/1/04
549 Morgan Stanley ABS Capital I Inc. Trust 2004-7AR 9/1/04
550 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE7 9/1/04
554 MORGAN STANLEY ABS CAPITAL TRUST 2004-HE8 10/27/04
556 Morgan Stanley ABS Capital I Inc. Trust 2004-8AR 9/1/04
561 MORGAN STANLEY ABS CAPITAL TRUST 2004-NC8 11/23/04
570 GSAMP Trust 2005-HE1 1/26/05
573 MORGAN STANLEY HOME EQUITY TRUST 2005-1 1/26/05
577 MORGAN STANLEY ABS CAPITAL TRUST 2005-NC1 2/25/05
581 GSAMP TRUST 2005-HE2 3/28/05
589 MORGAN STANLEY HEL 2005-2 5/25/05
594 GSAMP TRUST 2005-HE3 6/28/05
603 GSAMP TRUST 2005-HE4 8/24/05
605 MORGAN STANLEY HEL 2005-3 9/1/05
614 GSAA HET 2005-MTR1 10/31/05
618 SOUNDVIEW HOME LOAN TRUST 2005-4 (Greenwich) 12/5/05
620 MORGAN STANLEY ABS CAPITAL TRUST 2005-HE6 12/5/05
623 MORGAN STANLEY HEL 2005-4 12/5/05
625 New Century HE 2005-C
627 MORGAN STANLEY 2005-HE7
628 New Century HE 2005-D
Last time I looked, the MasterServicer is the one with all the alleged records of what went where and to whom. All my assignments assign my note & Mort (except the 3rd one where only the mortgage is transferred NOT THE NOTE) from Am. Brokers conduit that went into bankruptcy in 2007 and could not conduct any business, and came out of bankruptcy in 2010 defunct/out of business, into a trust that closed in 2006 (impossible) using MERS as a nominee who cannot and does not own anything, with very obviously forged signatures. Every single assignment was from a nonexistent, out of business entity into a closed trust. Said this before the Court, and we shall see what the next fraudulent forged document is.
Florida NEWS from State Attorney :
http://www.myfloridalegal.com/newsrel.nsf/newsreleases/9F2D49F93748C61385257D1F00703613
You would probably need to get a FOIA suit filed to get that kind of information
I could not get a thing out of the FDIC
Under FOiA request they referred me to the servicer whom
They transferred ” all the files to” ( is that normal don’t they have their own record if what they sold) and then they referred me to their big hitter lawyers.
Not an attorney not legal advice just my experience as pro se litigant.
so….. the London whale trade was investors money and borrowers securitized loan payments gone bad…… real bad and the all the proceeds from the foreclosed on 6 million plus borrower’s securitized loans that were supposedly in “default” are the fictional profits? Could this actually be called “proprietary trading”?
Does the Volcker rule apply to servicers? Does anyone know the answer to that?
Neil ,
You formerly worked on Wall Street and I hold a series 7 ,, we both know , and everyone on Wall Street knows how customers are abused … I know traders that have absolutely perfect records in THEIR account … the banks do exactly the same ,, bet both ways , assign the winner to themselves and the losing trade to a client… How do you think Hillary had all those bizarrely uncanny cattle future trades .. it was a payoff engineered in this way.
The trouble is that this is entrenched as “the way they do business” when of course it should be a felony… Who will go against Citi? BAC? WF?