How Can I find the Real Lender? Securitization in a Nutshell

The point of securitization — as practiced by Wall Street is that there is no risk in lending to consumer borrowers. Under existing law that means there is no lender and there usually isn’t — except where a conventional loan get paid off in a  securitization scheme.

Sound crazy? it gets worse. Not only is the lending without risk but the higher the probability of failure of the loan the more the profit. That’s because in foreclosure the investment bank takes all the money, distributes it as revenue and gives the investors nothing.

The point is not finding the lender. The point is revealing that the party making the claims to collect, process, administer or enforce your loan is not the owner of the debt.

Under all existing law nobody can own a debt unless they paid for it. And nobody can own a debt unless they also have title to the debt. In real estate transactions that means that the note conveys title to the debt if the Payee has paid value for the debt. In conventional loans that means despite common beliefs about the construct of a loan, the “lender” is purchasing a debt from you and getting title to the debt by delivery of the note. That is where all those provisions of the UCC (Uniform Commercial Code) come from, adopted in all U.S. jurisdictions.

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In principle, securitization should have no effect and the debt would be owned and enforceable either by a group of investors or some business entity into which they had deposited their money and which purchased the loans from “borrowers” like you. Those investors would collectively have paid value for your loan and received title to the debt in the form of a note which is required by the statute of frauds.
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But in practice the investors deposit their money with an investment bank. They are not buying your promise to pay or your promissory note or your security agreement (mortgage). They are buying a certificate in which an investment bank, acting under the name of a trust which may or may not exist issues the certificates to memorialize a promise from the investment bank to make payments to the investors. And that is where the law has no provision for what the banks did next.
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The investors expressly waived and disclaimed any right, title or interest to any debt, note or mortgage. which means they paid for it but they received no direct ownership of it. Instead they got a promise from the investment bank that was actually unsecured and mostly discretionary on the part of the investment bank with vague references to indexes based upon the performance of a portfolio of loans that probably did not exist as a portfolio owned by any business or other legal entity except as a fictional construct created by the investment bank on the desk of a CDO manager.
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CDO=Collateralized Debt obligations — which are obligations but not collateralized in any legal sense. The investment banks use labels to create the fictional constructs and then hope it is complicated enough that any explanation they give will be accepted by a court.
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So the question is not YOU find the actual lender. Under the law it is the burden of the claimant to find the actual lender and show that it is the party who paid for the debt and who therefore has a financial injury arising from non performance under the loan or else there is no jurisdiction by which the court can consider any claims based upon the existence of the loan.
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And the only way you can do that is through discovery and/or cross examination where you reveal gaps in the case being presented against the homeowner.

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7 Responses

  1. Long time ago – I went the way of the Office of the Administration of Courts. Hung in awhile — but where did it get me? Right back to the same judge. He was not happy.

    If only a couple of judges, it might be feasible. When it is the whole system with judges supporting case law of their peers — it would be extremely difficult. Case after case is decided on bad precedent. They support each other.

    This is like medical malpractice. It is very difficult to get experts because doctors support each other – right or wrong.

  2. Has anyone tried to go after the judges bond? I filed complaints at the local level, about the presiding judge and magistrate…the response was a restraining order blocking me from contacting the officials…the only thing I can do is file things directly related to my case. My take: the kitchen was getting hot. On the right track…

  3. Yes, battle against Judges is very uphill battle – but Judges declared us this war first.

    They are public servants and we have rights to remove this privilege from Judges who refuse to serve the public and decided to serve the money stolen from the people.

    If we let it go – they will take from us everything,

    they already took most of laws; rights, freedom. They declared fraud upon the Court into the law.

    We need to start suing Judges.At least tell them that we are not going to obey their unlawful rulings.

    Here are no statute of limitation for fraud upon the Court committed by banks and judges.

    Judicial immunity is not absolutely and Judges are not the law or the Court.

    Attorneys cannot sue Judges – this is a career suicide.

    PEOPLE must start to sue Judges.

    Rosa Parks refused to give her seat to a white person. This day changed lives of many other people and started a huge civil rights movement/

    We are victims because our civil rights are stolen by Judges. We need to stand for our rights and return them back to us.

  4. Has anyone known of a foreclosure where the servicer/trust filed an IRS. Form 14498, which is “an application for consent to sale of property free of federal tax liens? If so, what was the outcome?
    Also, I ha ent heard much lately about anyone having to deal with a 1099-A, or 1099-C form.

  5. Summer — going against judges is a very difficult battle – not that I dispute it – but very difficult. The control is powerful. Judges have immunity. Very hard to go against them. This will take powerful EXPOSURE and support so that our representatives finally wake up.

    Neil — good post, as always, but how everything was structured gave avenues to put loans out the back door. And, those loans out the back door were not only any high “risk” loans – but ALL loans. Many were not even ever securitized.

    Java — all unsecured as to any “financial crisis” loan. It is known from within, but undisclosed to the public. Starting point for these loans? You got it. .

    The battle is huge.

  6. It’s well past time to Put Pressure on Fannie & Freddie !!!!!

    UNSECURED DEBT !!!!

  7. Here we go back to the basics – do JUDGES want to follow law?

    Do they follow the law? Do they CARE about the law when they award homes to a party who came with forged documents and lie non-stop.

    Nope, JUDGES do not care about the law and do not follow it. Otherwise the foreclosure crisis would be over at least in 2012.

    Next, does the LENDER wants us to know who they are?

    In most cases, no.

    Based on my several years of research, the last thing the “Lender” wants you to know – where the money for your loan came from.

    Because these CDOs (mostly located on Cayman Islands) launder dark money from all possible criminals around the World.

    So, the Lender does not want to be found.

    Who are left.

    Investors – Pension Funds whom Investment Banks sell certificates not backed by any collateral.

    Again, based on my research and personal experience, one loan could be simultaneously traded by several companies who sell their shares to different investors – and claim the SAME loan as a collateral!

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