Paatalo Scores Again: Where do those payments go?

As I  have repeatedly stated on these pages, commingling funds from investors with (a) other investors and (b) third parties is the root of the securitization scheme and the basis upon which the brokerage houses (investment banks) are able to convert your money to their money.

That could be legal if it was part of any deal, but it isn’t because neither investors nor borrowers are informed of this practice. If they were so informed, they would bargain and choose differently amongst lenders. More importantly they would assert claims to affirm the investor’s right to receive payment and the borrower’s inalienable right to have his or her payments paid to a party to whom the debt is owed.

The bottom line is that holders of “certificates” have no interest in the debt, note or mortgage. secured or otherwise.

So if a foreclosure is stated to be brought on behalf of the certificate holders that is a lie.

And payments from borrowers may easily be commingled with the funds of servicers and thus third parties  to whom the servicers direct payments. So the parties (investors) who paid money never receive payments nor are they entitled to payments from borrowers.

Thus payments from borrowers and proceeds of foreclosure may be directed to anyone except the investors who paid value for the debt.

This is antagonistic to existing law. And this is why I am going to start a forum in 2020 where we discuss needed changes in the law.

Right now, under existing law, none of the securitized loans can be foreclosed. Courts are doing it anyway under the false, erroneous belief that the proceeds are going back to investors. They do not realize that they are rubber stamping an illicit revenue scheme.

Gradually this lie is being exposed. What can and will happen is that laws need to be changed to accomodate securitization as a tool for financing while at the same time maintaining the integrity of the laws and public policy of Federal and State government.

Bill Paatalo came up with the following, which explains part of this phenomenon and confirms that there is no secured interest in the debt:

Heads we win, Tails you lose.

WaMu Mortgage Pass-Through Certificates, Series 2007-HY6

“Risk Factor” disclosed in the Prospectus:

For transactions in which the offered securities are mortgage pass-through certificates, investors should consider the following ten risk factors:
The Trust May Not Have a Perfected
Interest In Collections Commingled by the
Servicer With Its Own Funds, Which
Could Cause Delayed or Reduced
Distributions on the Certificates (e.s.)
The servicer will be permitted to commingle collections on the mortgage loans with its own funds, and may use the commingled funds for its own benefit. The trust may not have a perfected interest in these amounts, and thus distributions on the certificates could be delayed or reduced if the servicer were to enter conservatorship, receivership, or bankruptcy, were to become insolvent, or were to fail to perform its obligations under the related pooling agreement.

However, the PSA strictly forbids the commingling of Trust assets:

Section 2.03.        Separateness Requirements. Notwithstanding any other provision of this Agreement and any provision of law that otherwise so empowers the Trust, so long as any Certificates are outstanding, the Trust shall perform the following:
(xi)       except as expressly permitted by this Agreement, not commingle its assets or funds with those of any other Person;

Bill Paatalo
Oregon Private Investigator – PSID#49411

BP Investigative Agency, LLC
Mailing Address:

476 LaBrie Drive

Whitefish, MT 59937

Office: 1-(888)-582-0961

bill.bpia@gmail.com

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One Response

  1. “The trust may not have a perfected interest in these amounts, and thus distributions on the certificates could be delayed or reduced if the servicer were to enter conservatorship, receivership, or bankruptcy, were to become insolvent, or were to fail to perform its obligations under the related pooling agreement”.

    My original servicer was New Century Mortgage Corp…filed for bankruptcy 02 April 2007. “alleged loan” servicing went to SPS, Carrington, Weichart, GMAC, Ocwen,????? CSMC NC1 OSI Trust, Pass through Certificates 2007…Yawn, yawn…seized by Credit Suisse a wholesale lender. By all accounts New Century used the wholesale loan, homeowners payments and their escrows to fund company operations….this is from the Delaware Bankruptcy Court…

    I’m still looking for the securitization part.

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