Freddie Mac Selling Toxic Loans: Do they really own those loans?

The resulting case law is opening up Pandora’s box as the law of these foreclosure cases spills over into hundreds of other situations.

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So I have two questions that should be sufficiently annoying to the banksters: (1) what makes Freddie think it owns the loans? and (2) if the loans are in default doesn’t that make the notes non-negotiable paper?

As to the first, my guess is that Freddie paid somebody something. What they used as currency was MBS issued by private label trusts. The MBS were worthless because they were issued by an unfunded paper trust. Freddie paid somebody using those bonds. But that somebody didn’t own the loans because the money had already been advanced by ANOTHER party (the investors) under a false deposit scheme with the investment/commercial banks.


So the debt was at all times owned by an unidentified and perhaps unidentifiable  group of investors/victims who to this day may not know that their money was hijacked to make toxic loans. That makes any sale or assignment to anyone void, including Freddie Mac. And whoever is getting paper executed by Freddie Mac is getting exactly what Freddie owns: NOTHING.


As to the second, if the loans in default are not negotiable paper, then the presumptions attendant to negotiable paper under Article 3 of the UCC do not apply. And if THAT is the case, the party in possession is not a holder, not a holder in due course and possibly not a possessor with rights to enforce. They would need to prove that they paid for the “loan” and they would need to show that there was a loan [not just from anyone. It must be an actual loan of money from the party identified as Payee on the note]. They would need to show that they not only bought the note but they also bought the debt.

As it turns out the note and the debt are owned by two different parties. The debt normally merges into the note so that when someone signs it they don’t have two liabilities. But what if the debt was owned by a third party at the time the maker signed the note? Assuming the maker did not know that a third party was involved, the maker is back in the position of two debts — the very problem that the merger rule was intended to prevent.


So far the courts have endeavored to deal with this tricky problem by pretending it does not exist. The resulting case law is opening up Pandora’s box as the law of these foreclosure cases spills over into hundreds of other situations.


11 Responses

  1. They are all holding “junk bonds” IMHO…and most of the players are debt collectors, again, IMHO. To collect a debt in full you MUST have authority to do so. Not a counterfeit piece of paper. The lawyers in many of these cases are culpable, IMHO. They know what they do and absolutely NO diligence has been met, with unclean hands, perjury, fraud and an Article III claim, IMHO.

    No lawyer here, just years of looking at the same paperwork, over and over again!

  2. Could anyone tell us how this has a connection to CWABS, Inc. asset backed certificates, series 2007-4 . Our assignment of mortgage is backdated to be in this seemingly bogus trust with trustee as BONY.

    We have complained to the FBI and they mentioned that we have not submitted evidences of any Federal crime committed by B of A.

    The closing date of the trust was March 29, 2007 and the assignment was done on August 11, 2011 with a wording within the assignment it was recorded on March 13, 2007.

    How do we expose these crooks showing that the error was NOT bonafide or unintentional?

  3. I keep saying this: MARYLAND LEGISLATIVE BRANCH, LEGAL SYSTEM, LAW ENFORCEMENT AND COURTS ARE ALL CROOKS. They let foreclosures and evictions happen without any certified affidavits, notes and deeds. I dont care if we are in a nonjudicial state. Documents are presented in front of a court/judge. So not just foreclosure local and state courts, but the bankruptcy, adversarial, and federal courts are dismissing cases or granting the crooks favorable judgments without the homeowner ever stepping foot into a court room and with no evidentiary hearing. It is going on 8 years for me. I wonder how many others are there in Maryland still in the fight and want to join forces. When I post stuff online about all this bull….I get crickets. People so scared and wont stand up to fight. I only serve one GOD and I shall not serve another.

  4. Yes you are correct, where are the true lenders and owners of the loans?? Why are we not seeing bankers, loan servicing agents and the employees of these organizations on their way to prison?
    I have the answer, the U S Supreme Court and the State Supreme
    courts come out with rules overturning lower courts and their
    criminal methods in which they ruled in favor of the criminal bankers,
    but I haven’t seen any of these crooks and their employee co-conspirators on their way to prison where they can be issued free vacations and orange jump suits.

    If I was a lawyer and practiced in Arizona, I would certainly take on .the case stated above, with or without fees just to be satisfied that the home owner walked out of court a winner.

    As a former agent for the U S Government Criminal Investigation Division, I am amazed and disturbed that we have not as yet seen
    bankers, loan servicing agents and employees of these organizations, plus the lawyers who represented them in court, all lined up waiting to board busses transporting them to prison. Maybe if someone would tell them the vacations are free along with the free orange jump suits they will be issued when they arrive, that many would go for it..

    So far, after the U S Supreme Court and many State Supreme Courts have ruled and ordered lower courts to reverse many cases that were found to have been wrongful foreclosures due to fraudulent, fictitious and forged documents, we have not seen many overturned.

    I have been engaged in close to one hundred bank fraud cases in their
    absolute methods used to steal properties from home owners. Many owners unable to go on fighting after paying out savings to lawyers who did nothing. (I;m not saying that there are no honest lawyers, because I know there are, but most of them do not know how to fight
    these deep pocket bankers and have given up the battle). This is what the banks bet on and that is, that most all the home owners they attack will fold up and quit, leaving the homes to the banks, who have no beneficial interest or standing to foreclose or to even collect mortgage payments.

    Why has our government law enforcement agencies and the courts allowed this criminal enterprise to exist and continue to ruin the lives
    of millions of our citizens?? The banks and the Wall Street hoods have manipulated our citizens as well as the courts, the legal system,
    including the Internal Revenue Service, not to even consider the stupid investors who invested in mortgages for which they were told they had a security interest in with shares of stock in Trusts that had mortgage pools, said trusts that were never even formed or had any money or even a bank account and no trustee in said trusts. The banks and wall street had everyone fooled, including our courts. Now, from what I understand, we may be seeing law enforcement after these criminals for TAX EVASION, MONEY LAUNDERING, MAIL AND WIRE FRAUD,
    and potentially RICO charges.

    We see the antics of Mr; John Stompf, President and CEO of the famed, Wells Fargo who have been using their wagon trains and beautiful horses to transport their illegal bags of cash from the illegal sales of homes they had no financial or security interest in, hiding the cash in off shore banks plus lining the basements of Mr. Stompf and his associates with millions in bonuses and kickback fees. Bryan Moynahan of the BofA, Jamie Dimon president and CEO of Chase
    Bank, plus others such as the big wheels at Ocwen Loan Servicing,
    the largest of the loan servicing agents in the world, The theft of money Stompf engineered with the fake accounts and credit card fees taken from customers who didn’t have a clue they were being fleeced,, a
    yearly bonus by the stupid Board of Directors of Wells Fargo
    approving millions upon millions in bonus money to Stompf becayuse the share price of the Wells stcokj went sky high, all from the illegal
    activities of a bank they were board members of that have been stealing from customers to enrich themselves.

    The whole world is waiting to see how many years Mr. Stompf will receive behind bars. The next banker will be Bryan Moynahan along with Jamie Dimon. Elizabeth Warren, who I love, has had her eye on these bunch of thieves for some time, hopping that she can convince the Senate and Congress to force criminal actions and place these thieves behind bars. She has estimated each of these banks have committed Trillions of dollars in fraud activities at the cost of consumers and home owners. SHE IS RIGHT ON. For some reason, we have not seen many other political persons fighting along with DElizabeth to stop this sheme the bankers have had running for years now.

    Hopefully, whoever makes it to the White House, will clean up this mess and see that indictments are drawn against these thieves as well as against many of the co-conspirators in the banks and loan servicing agencies. Lets not forget to include the lawyers who have been representing and misrepresenting cases and stealing money from home owners. Also, many Notary Publics who have allowed their signature and stamp to be used to fabricate false, fraudulent documents
    all for illegal fees and bonuses they were paid.

    Enough for now, but God Bless the home owners and former home owners and hopefully many will have cases reversed, with huge damages against the banks for their cruelty, thievery and criminal

    To the home owners and those suffering due to this criminal epidemic ,
    please keep the faith and we will eventually win. Support Elizabeth Warren and support whoever you believe can and will RIGHT OUR SINKING SHIP, when and if they gain entrance to the White House.

    Best to all.

    William Bennett of


  5. james, Florida has had some victories, but few and far between. HAMP, HARP, all scams. Any modification is a step closer to foreclosure. Judges are paid off. We’re doomed. Still in my house, waiting on 2nd foreclosure, this time after a Chapter 7. Will let you know how it goes. At least I’ve held them off for 9 years.

  6. Javagold, thx but I will die with hope in my heart that somehow I might get someone who knows how to help. 6 years, thats right 6 years have gone by and my wife still cries when we have to pass the house sometimes. If it was on peoples court with all the evidence I have WF wouldn’t have a prayer because the judge would look at real evidence NOT BS.. and make a judgement on that. I can’t find a F%$Kn lawyer in AZ who will take on the bank with conviction. I can’t pay a bunch of money to a crooked lawyer who just wants to make a buck and doesn’t care about the outcome. In reality if WF says my home Qualifies for HAMP BUT in reality a second home NEVER qualified to even apply for HAMP how can they put me in HAMP, collect the money and admit in a letter they INADVERTENTLY put me there and NOT BE GUILTY? then put me in default and take my home. that letter in Peoples Court would WIN! no BS just truth…which seems to have no place in a court of LAW here. I served in the Marine Corp. in a war no one wanted, I fought for the freedoms that are abused. Justice? like hell.

  7. Same cast of criminals as you James. And same result. Wells Fargo stole my house with fraudent documents and stole my house.
    I see this website has lost most of its long time followers. Neil. Seems like a great guy. But if he has no concrete proof of helping homeowners after all these years. I guess everyone finally realized this blog website was nothing but a waste of all our time. Sorry.

  8. Nice article, but Judges do not take interest, who really owes the loans and who is the real qualified party able to file a foreclosure suit.
    I`m just amateur, homeowner trying find out, who is my true lender, researching closed cases to find out, how the Florida courts ruled.
    I find, that in Florida,
    – STATUTE OF LIMITATION: don’t count as regarding to foreclosure actions.
    – STANDING : the original trustee of the trust, who filed for bankruptcy in 2009 may act as lien superior in dignity to any prior or subsequent rights, in interest, file a lawsuit and foreclosure the property without bankruptcy court approval.
    – The courts wants to get rid of those ‘unsecured loans” as soon as they can. And all they need is: Homeowner loan the money. YES., Is this loan delinquent ? YES., OK, then rule for anyone, who claims to be owner of the loan.

    My case is still opened. Case no. 16000282CAMXAX, Santa Rosa county, Florida. Plaintiff: WELLS FARGO, Ocwen, Mers and Van Ness Law Firm, Plc. I wish, that law will be blind as should be and judge will be impartial.

  9. same with millions of people

  10. I have asked this question a zillion times… finally! freddie was supposed to own MY mortgage? so said WF bank.. yet!! WF foreclosed on my loan instead… who owned my loan and can I finally get some lawyer to take my case and maybe prove that I was robbed?
    WF put me on the HAMP not freddie? said it was approved BUT NOT.. is there some lawyer reading this who will give me a chance to tell WF to go to hell and get some of my money back they stole from me from this BIG LIE called HAMP! house is long gone, but not the tears.. SemperFi.

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