I have been saying for years that the continuation of current securitization practices will result in another crash similar to 2008, although perhaps not quite severe. A key indicator is the number of pretender lenders that file for bankruptcy. It is spiking as you can see from the article contained in the link below.
see https://finance.yahoo.com/news/us-mortgage-lenders-starting-bankrupt-191500850.html
Lawmakers and law enforcement are taking some legal fictions too literally and coming up with absurd results — the very thing that a live human judge is intended to scrutinize and prevent.
One of them is that pretender lenders are lenders simply because their name is on the closing papers. In nearly all cases, no originator has ever loaned any money to anyone. Hence any document asserting the transfer of a “loan” from that originator to anyone else is fabricated and false.
The argument behind the lender status for these thinly capitalized fronts for Wall Street securities brokers is that they borrow funds to complete the transaction with the homeowner. And usually, there is a buyback provision that is never enforced but nonetheless creates a liability.
All the revenue generated by the originator consists of fees masked sometimes as profits from the “sale” of the transaction to a third party. That third party never pays any value for the purchase of that which the originator does not own. And the reason for that is that the securities brokerage firm that originated the real scheme —- creation and sale of securities — sent the money for closing through intermediaries to the closing table.
In other words, neither the “lender” to the originator nor the originator itself ever touched the closing funds. Hence the conclusion that neither one is a lender and neither owns an obligation claimed to exist by still other third parties (i.e., the lawyers for a foreclosure mill or the company designated to pose as “servicer”, which in turn does not perform any serving duties).
I know. All of this sounds like crazy conspiratorial thinking. But suppose you test any of the premises in this article in court. In that case, you will always and consistently be met not with proof corroborating the truth of the matter asserted against the homeowner but rather an argument that the lawyer from the foreclosure mill that it is not required to answer you.
The end result is that the court — and you, if you don’t get aggressive in litigation — will conclude the truth of the matter asserted in fabricated and false documentation — all on account of “we said so.”
So the new spike in bankruptcies of these originators simply corroborates everything I have been paying for 16 years. They’re bankrupt because they have no assets, and they’re left with “liabilities” owed to a “lender.” Like the originator, the “lender” has loaned no money. It is a contract intermediary between the Wall Street securities brokerage firm and the originator.
The bankruptcies occur not because of any “loan” defaults but because applications for loans are declining, reducing the fees generated from posing as a lender when they are merely an originator — i.e., a salesman.
You won’t find any assets listed in any of these bankruptcies that include ownership of loans because they all signed a document (originally labeled as an Assignment and Assumption Agreement) that effectively transferred ownership and control to the third-party intermediaries who would serve as fake warehouse lender.” This is what led to hundreds of foreclosures against consumers who never completed their deals after applying for a loan.
So the bankruptcy of these originators is the canary in the coal mine. When loan applications start to drop, then so do sales of the “certificates” that are falsely labeled as mortgage-backed bonds. Lacking the revenue from those sales of certificates, the Wall Street securities brokerage firm can take advantage of various devices to pay their investors less — whom they promised an installment payment that would extend indefinitely in time.
And THAT is how 2008 happened (the great recession).
PRACTICE NOTE: The advantage of having these companies go out of business and declare bankruptcy is that the Wall Street securities brokerage firms behind the false claims of debt securitization can launder title. If you look back into the promotional material for these schemes, they all proclaim that they’re using several layers of “Bankrutpcy remote” vehicles that cannot be penetrated. That means that no creditor of the petitioner (i.e., the originator) in bankruptcy can force the sale of “loans.” But it also means that the petitioner never owned the “loans.”
Subsequently, they file document upon document creating an illusion from which the reader erroneously concludes that a title interest (ownership of the mortgage lien) has been created. Title is never created by a false document. Either the grantor possesses title or it doesn’t.
You will never see an assignment of mortgage or an allonge executed by any US Trustee in bankruptcy or a receiver. The reason is simple: there is nothing to assign.
Filed under: foreclosure |
When these “originators” (faux lenders) go bankrupt, we are creditors.
The best I can contribute here is, dealing with Ocwen, I found so many flaws in their paperwork, it took years to unravel. My “note” (not the debt< mortgage) allegedly was acquired from Credit Suisse, through the New Century Mortgage Corporation ("NCMC") bankruptcy. New Century acquired hundreds of millions of dollars through warehouse lines of credit. If I read the requirements properly, the manner in which they were supposed to be handled,"each individual" note-debt, was to screened for compliance, quality attributes then secured in a pool, specifically designated by tiers in a REMIC Trust. Further, NCMC spent millions of those dollars for company expenses, not securing the loans or even funding many of them…worthless paper (see suits filed).
In my particular case the Federal Bankruptcy Court, DE admits in a preliminary, evidentiary hearing 17,000 loans-notes were "seized" and held only for collateral, to ensure payment of some of the warehouse loans. There was RBC, Credit Suisse, Deutsche Bank, to name a few…extensively searched SEC files (had 2 loan numbers for my account, with just the original amount, status and no further entries). I created accounts to access US Banks database, Ocwens documents, Credit Suisse Trusts, and so many others…no listing for my "alleged debt", other than an assignment in 2015, backdated multiple times.(loan was generated in 2007).
The point here is: I had this thing won with the "seizure" and my lack of sophistication, buried me. Sufficient to say, companies like American Home Mortgage ("AHMC"), NCMC and Countrywide all had "serious deficiencies" in their origination process. The only court that appeared to get this partially right was the BK Court for AHMC, they had a borrowers class in the bankruptcy, where notice was sent off the BK filing,claims were allowed, and most homeowners were represented vigorously…many of them got a settlement. Where, BOA acquired, bought "sevicing rights" (average price $400.00+/-) off Countrywide and assigned the debt to themselves, their affiliates, then starting foreclosing on anything, everything…possessing only servicing rights. And NCMC was a mess…I cannot imagine anything they wrote in 2005, 2006, 2007…traceable.
It all makes sense as to what Neil been saying about the banks not actually being the lenders. As fighting Wells Fargo Bank and having to learn about MBS it never made sense how an investor would make the additional loan on the mortgage loans in the pools and the mortgage principal and interest would be passed through to the investors, but where is it that the investor could be paid more than what the originator was making off the mortgage loan and still able to make money.
The securities are created and then the mortgage loans are pooled into it, and the banks receive more monies to make more loans and that mortgage payment flows right to the investors! The bank gets a yield and moves on to the next loan!
I continue to see US Bank NA Trustee for XYZ Trust still trying to Fraudclose on 1000s of Homeowners.
Enough is Enough!!!!
Exactly right as in Ginnie Mae MBS pooling the pool is created and Fed Gov Backed loans are placed into the pooling that been created before the loan is originator or in other cases purchased by the another lender that going to pool the loan.
In my case the originator did fund the loan in a rare case as part of Washington Mutual Bank (WAMU) correspondent program to achieved a greater yield on the VA loan that there could never keep as they were not an authorized servicer to handle mortgage servicing for either an VA or FHA loan which over 95% of these loan are Ginnie pooled.
Where I believe they exposed the fraud is with my loan as the originator failed to record the Deed of Trust (DOT) and did so only after the loan had been sold 22 days before the recording, I believe that WAMU did not try to fix the issue by trying to get a new DOT signed by me to correct the issue, or do as Wells Fargo Bank (Wells) did after the fact the bank failed on Sept 25, 2008, and that was to have MERS and the law firm ROBO sign an Assignment of DOT stating that Wells paid value for the loan on Oct 22, 2009 a year after WAMU was shut down. But when trying to get a VA HAMP from Wells they changed the story that there was some mystery owner of the loan debt that they could not tell me who the owner was because of privacy reasons.
It the loan that taken out by the lender against the pooling who giving the lender monies to create more loans to pool protecting the investor from losses as Ginnie insures the investors up to 100% for initial principal investment instead of being on the hook as during the Financial Crisis for properties worth half the loan balance because the property values have decreased.
It why in my case that Ginnie allowed the property to before closed before the investor loan was purchasing back the loan that was received from the investor at the beginning of the pooling. The ability to payback the monies that WAMU had an obligation to the investors can legally be paid back as WAMU does not exist, but in my case as WAMU does not exist so there no payoff going to WAMU, so Wells keeps that monies by hijacking my account receiving in a couple of hundreds of dollars over the alleged balance which they paid Ginnie and keep the proceeds of the foreclosure and VA Guaranty insurance claim which is suppose to complete that transaction which is a non-recourse mortgage loan. However, accounting is a fraud because there is no counterparty that exist!