Securitization Search: Why You Need the PSA

Quoted from April Charney — I’m not sure of the source. She is right on every point.PSA= Pooling and Servicing Agreement

EDITOR’S NOTE: Glad to see that April is doing what the rest of us are doing — going deeper and deeper. There are two things you need — the loan specific title search with analysis and the securitization search, report and analysis. One tracks the chain of title the other tracks the chain of money. You must track both in order to avoid the “proffers” and bogus representations of opposing counsel. The only thing I would add is that the Prospectus, Assignment and Assumption Agreement, Distribution reports and “re-stated” agreements tell a long tale as well.

The search for the securitization documents is not as simple as you might think. The claim of some “Trustee” for a “pool” is never backed up by documents showing the full chain of title of the loan, because the receivables were assigned, not the loan. More than one pool can often be found claiming “ownership” of a loan that meets MOST of the characteristics of your loan, but not all of them. It is these inconsistencies that enable you to chip away at the credibility of the pretender lenders.

COMBO TITLE and SECURITIZATION Search, Report, Documents and Comprehensive Analysis

You must realize that while the original PSA is a good starting point, it isn’t the ending point. That is because of the the dissolution of hundreds if not thousands of these special purpose vehicles which was easy because they were never officially formed in the first place. You must realize that the point of fact is that there is a “claim” that the loan is in a “pool” which may or may not have ever existed, but that the the documentary trail shows it was never really assigned tot he pool. So the money trail leads us to those people who have an actual interest in the loan — only after you can make the point that ALL transactions by or relating to the “pool” must be accounted for and allocated to individual loans.

My opinion, is that the the money people, if they can be found, have an interest that can imposed by equity and not by law. Everyone else is simply out to line their own pockets without ever having invested a dime in the loan transaction.

FROM APRIL CHARNEY—–

“You have to get the PSA and the mortgage loan purchase agreement and the hearsay bogus electronic list of loans before the court. You have to educate your judge about the lack of credibility or effect of the lifeless list of loans as the Uniform Electronic Transactions Act specifically exempts Residential Mortgage-Backed Securities from its application. Also, you have to get your judge to understand that the plaintiff has given up the power to accept the transfer of a note in default and under the conditions presented to the court (out of time, no delivery receipts, etc). Without the PSA you cannot do this.

Additionally the PSA becomes rich when you look at § 1-302 (b) which says that the obligations of good faith, diligence, reasonableness and care prescribed by the code may not be disclaimed by agreement, but may be enhanced or modified by an agreement which determine the standards by which the performance of the obligations of good faith, diligence reasonableness and care are to be measured. These agreed to standards of good faith, etc. are enforceable under the UCC if the standards are “not manifestly unreasonable.”

The PSA also has impact on when or what acts have to occur under the UCC because § 1-302 (c) allows parties to vary the “effect of other provisions” of the UCC by agreement.

Through the PSA, it is clear that the plaintiff cannot take an interest of any kind in the loan by way of an “A to D” assignment of a mortgage and certainly cannot take an interest in the note in this fashion.

Without the PSA and the limitations set up in it “by agreement of the parties”, there is no avoiding the mortgage following the note and where the UCC gives over the power to enforce the note, so goes the power to foreclose on the mortgage.

So, arguing that the Trustee could only sue on the note and not foreclose is not correct analysis without the PSA.
Likewise, you will not defeat the equitable interest “effective as of” assignment arguments without the PSA and the layering of the laws that control these securities (true sales required) and REMIC (no defaulted or nonconforming loans and must be timely bankruptcy remote transfers) and NY trust law and UCC law (as to no ultra vires acts allowed by trustee and no unaffixed allonges, etc.).

The PSA is part of the admissible evidence that the court MUST have under the exacting provisions of the summary judgment rule if the court is to accept any plaintiff affidavit or assignment.

If you have been successful in your cases thus far without the PSA, then you have far to go with your litigation model. It is not just you that has “the more considerable task of proving that New York law applies to this trust and that the PSA does not allow the plaintiff to be a “nonholder in possession with the rights of a holder.””

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