Law students are taught only two forms of securitization: (1) divide an asset to sell to multiple investors or (2) divide ownership of the whole asset into multiple shares between investors. They are never taught anything about the dozens of other forms of securitization, most of which form the foundation of current practices.
The main applicable form of securitization as it relates to transactions with homeowners neither splits the “asset” (i.e., the unpaid loan account on the ledger of a creditor), nor divides ownership of the entire “asset” into shares for multiple investors. This one fact accounts for nearly all the confusion on the part of lawyers and judges.
The main applicable form of securitization as it relates to transactions with all consumers is that the role of the “lender,” the creation of a loan account on the ledger of the “lender,” and the accountability for compliance with lending and servicing laws are completely blocked out leaving the consumer (homeowners in particular) twisting in the wind under a label of “borrower” — despite the complete absence of a “loan,” as the law would describe such a transaction.
Consumers have been converted from intended borrowers to actual issuers – of documents that would be underwritten and sold as unpaid loan accounts. Homeowners were paid money labeled as a Loan based upon the creation of a nonexistent and unintended loan account.
This one fact accounts for nearly all the confusion on the part of lawyers and judges. They can conceive of no other alternative simply because they are not trained or licensed in investment, banking or accounting — because they are not trained or licensed in investment, banking or accounting.
So then people read my blog, and they go to a lawyer, expecting the lawyer to understand everything that I have written. Most of what I write is based on the fact that I am trained in investment, banking, and accounting. I was licensed as a securities broker. And I was a practicing investment banker for decades. The legal ramifications of such practices are only apparent if you know the actual fact scenario and why it exists. Lawyers don’t know that and neither do consumers.
Unless the lawyer has done both extensive and intensive research and analysis of the development of the current iteration of “securitization,” he or she is likely to only partially understand what is going on. Such people often feel likely a wall when they receive facts or documents that they are unable to rebut or even interpret.
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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.Please Donate to Support Neil Garfield’s Efforts to Stop Foreclosure Fraud.
CLICK TO DONATENeil F Garfield, MBA, JD, 75, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business, accounting and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. THE COMMENTS ON THIS BLOG AND ELSEWHERE ARE BASED ON THE ABILITY OF A HOMEOWNER TO WIN THE CASE NOT MERELY SETTLE IT. OTHER LAWYERS HAVE STRATEGIES DIRECTED AT SETTLEMENT OR MODIFICATION. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
But challenging the “servicers” and other claimants before they seek enforcement can delay action by them for as much as 14 years or more. In addition, although currently rare, it can also result in your homestead being free and clear of any mortgage lien that you contested. (No Guarantee).
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Ronald – you got lucky
Good article. When I went thru this against Chase and Deutsche – we actually won but only because I was patient and stubborn. Could not find an attorney here in KC that knew diddly. Judges were a joke.