False claims of securitization revise custom and practice amongst banks

If you go into any bank looking to initiate a transaction with them, there is not a single exception that you will find anywhere with respect to general customs and practices in the banking industry – including investment banking.

They will first want you to identify yourself with specificity so that your identification could be corroborated through third parties – preferably government sources.

The second thing they will want is for you to identify the subject matter of the proposed transaction. With specificity, the subject matter can be identified and corroborated through third parties – preferably government sources.

Here is an example taken from documents prepared by and for a transaction in which banks were involved. It shows the kind of language that is typically used in connection with the necessary warranties of ownership and authority before any bank will execute the document:

Seller warrants that it (a) has (i) the authority to make the commitment set forth in Section 1.1 of this Agreement, and (ii) good and marketable title to all Gas delivered to Buyer at the Receipt Point(s), and (b) will have the right to convey, and will transfer good and merchantable title to, all of Seller’s Gas sold hereunder and delivered by it to Buyer, free and clear of all liens, encumbrances and claims.
No agent, employee or representative of Seller has any authority to bind Seller to any representation or warranty concerning the Equipment and, unless any representation or warranty made by agent, employee or representative is specifically included within this Sale Agreement, it is not part of the basis of the Sale Agreement and shall not be enforceable against Seller.
What I have been writing about for years is there has not been a single executed assignment of mortgage, assignment of the beneficial interest under a deed of trust, servicing agreement, power of attorney, the limited power of attorney or any other document that says that the grantor owns the rights that are being transferred.  There is no warranty of ownership or authority to execute the document.
The whole idea is that you never want to be caught doing things on your own. You always want to be saying that somebody else told you to do it and that you had a reasonable basis for believing their authority. If they didn’t have the authority, that is on them, not you. In a nutshell, that is the entire Wall Street playbook.
  •  Wall Street is playing on our implicit bias. When we see an assignment of mortgage, for example, we make certain presumptions – regardless of whether they are true or not.
  • We assume that the party executing the document is an authorized representative of the identified assignor.  But there is nothing in the document that says that.
  •  We assume that the assignor had something to assign. But there is nothing in the document that says that. I have not seen a single assignment of mortgage in which MERS or any other assignor warranted that it and title to the mortgage.
  •  We assume that because an assignee has been named that it has received title to the mortgage and that it accepts title to the mortgage.
  • But in every case, in thousands of cases that I have analyzed, there has not been a single assignee who claimed ownership of the mortgage lien, note, or any payment claim.
  • Instead, they direct your inquiry to the “servicer,” which is imbued with the attributes one would expect from a bank that is named “as trustee.”


So, for example, US Bank asserts that it is not liable to any homeowner as a lender or successor lender because it never owned the lien except as an agent for someone else. It also asserts no liability to the holders of certificates because US Bank neither owns nor has any rights over the management of any sources of income for the certificate holders.


The absence of what is in these documents matters most under the law. The lawyer for the foreclosure mill cannot argue that the grantor owned “the loan”  without some foundation for that argument. The foundation cannot be found in the assignment, and there is not a single witness or sworn statement by anyone that will attest to the fact that the grantor owned anything.

PRACTICE HINT:  Don’t believe documents that appear to be downloaded from sec.gov. “Shelf registrations” allow companies to upload anything they want and then download them with the sec.gov header.

This has been used effectively to fool judges, lawyers and homeowners. In many instances, the lawyer for the foreclosure mill uploads the documents he wants to use as evidence.

He then presents the documents and claims the right to “judicial notice” as though it was a government document. But it is not a government document because it is not part of the records of any agency. It has not been reviewed or accepted, as you might think with the IPO filing. It is a private document that the lawyer has made it appear as a public document that comes from a government source.

Here is another example of the specificity required by banks:

CREDIT SUISSE. Credit Suisse represents and warrants to IMCO that (i) the retention of Credit Suisse by IMCO as contemplated by this Agreement is authorized by Credit Suisse’s governing documents; (ii) the execution, delivery and performance of this Agreement does not violate any obligation by which Credit Suisse or its property is bound, whether arising by contract, operation of law or otherwise; (iii) this Agreement has been duly authorized by appropriate action of Credit Suisse and when executed and delivered by Credit Suisse will be a legal, valid and binding obligation of Credit Suisse, enforceable against Credit Suisse in accordance with its terms, subject, as to enforcement, to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general equitable principles (regardless of whether enforcement is sought in a proceeding in equity or law); (iv) Credit Suisse is registered as an investment adviser under the Advisers Act; (v) Credit Suisse has adopted a written code of ethics complying with the requirements of Rule 17j-1 under the 1940 Act and that Credit Suisse and certain of its employees, officers, partners and directors are subject to reporting requirements thereunder and, accordingly, agrees that it shall, on a timely basis, furnish a copy of such code of ethics to IMCO, and, with respect to such persons, Credit Suisse shall furnish to IMCO all reports and information provided under Rule 17j-1(c)(2); (vi) Credit Suisse is not prohibited by the 1940 Act, the Advisers Act or other law, regulation or order from performing the services contemplated by this Agreement; (vii) Credit Suisse will promptly notify IMCO of the occurrence of any event that would disqualify Credit Suisse from serving as investment manager of an investment company pursuant to Section 9(a) of the 1940 Act or otherwise; (viii) Credit Suisse has provided IMCO with a copy of its Form ADV, which as of the date of this Agreement is its Form ADV as most recently filed with the SEC, and promptly will furnish a copy of all amendments to IMCO at least annually; (ix) Credit Suisse will notify IMCO of any “assignment” (as defined in the 1940 Act) of this Agreement or chxxxx xx control of Credit Suisse, as applicable, and any changes in the key personnel who are either the portfolio manager(s) of any Fund Account or senior management of Credit Suisse, in each case prior to or promptly after, such change; and (x) Credit Suisse has adequate disaster rec

2 Responses

  1. Need to conduct RFPs on the banks of the ‘sellers’ who sold these homes in the go-go years (2005-2008) to see who was the ‘source’ of funds wired to sellers – as only that ‘name’ on the wire transfers of purchasing fees could attest to the legitimacy and efficacy of the underlying financial transactions – as Neil has said for over a decade DISCOVERY is the key – but getting court cooperation allowing continuances and time to conduct discovery has been the knowing and intentional obstruction by courts and f/c mills – the sellers of these homes were probably innocent unsuspecting owners who were simply selling their homes – we need to go to the sole source of proof – the banks that accepted wires on behalf of ‘us’ buyers, as sole bona fide purchasers – we should and were always entitled to same, but the lowly inferior courts obstructed justice for us to have reasonable time and gain access to these entities; complicit with the forged, counterfeiting of paperwork.

    What are the legal ramifications around getting copies of those wired funds – of court lawsuits filed by us victims would allow for this discovery but what other means could we have to access those wire transmittals which detailed exact data – and that I believe is the first culprit in this mess. Or at least could be identified as the head of the financial snakes.

  2. So, what if Bank of America stated in the wording of the Modification Contract, that BOA ” Advanced the Funds ” of the amount owed on the Home. But then later, had to admit that the original” loan ” was actually sold into a ” MBS ” ?

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