How securitization nullifies the original note and mortgage. The Originating Lender is PAID IN FULL

By the METHOD of pooling and tranching, they converted from negotiable to non-negotiable instrument. (Article VIII UCC).

That means that upon transfer the recipient of the payment is satisfied in full and a new obligation arises between the seller and buyer separate and apart from the borrower. Further, the method calls for the proceeds of payment from one note to be used as collateral (cross collateralization) for another. This breaches the terms of the note which states that payments by borrower will be applied to what the borrower owes.

So the investor receives the “benefit” of multiple obligors plus insurance and credit default swaps and an investment grade rating that was obtained under false pretenses. But what the investor is holding is not the original note. He/she/it is holding a stream of revenue with multiple conditions. A conditional promise to pay is not a negotiable instrument.

The only party on record as mortgagee or beneficiary under a deed of trust has been paid in full as to principal, paid in full as to disclosed fees, and has received undisclosed fees as well because they were standing in for the real lender whose identity and existence was withheld from the borrower — all TILA violations.

The purpose of the disclosure requirements is to crate enough transparency that both the funding source and the borrower can readily perceive the risks of the transaction. In this case the pattern of conduct was to make sure the investor and borrower could never get together to compare notes. This prevented the borrower from assessing whether better terms were available (instead of huge fees going to intermediaries) and it prevented the investor from assessing the risk and rate of return on investment (because only a portion of the invested dollars was going to fund mortgages — the rest going to fees spread around like a whiskey bottle at a frat party (Mike Stuckey’s phrase, MCNBC.com).

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18 Responses

  1. […] So the investor receives the “benefit” of multiple obligors plus insurance and credit default swaps and an investment grade rating that was obtained under false pretenses. But what the investor is holding is not the original note. He/she/it is holding a stream of revenue with multiple conditions. A conditional promise to pay is not a negotiable instrument. READ MORE… […]

  2. To Jim,
    Was WF the originator? It sounds like you got the loan from WF and you think they sold it; but they foreclosed. So why do you think they sold it? If WF is listed on the note and DOT as the beneficiary, unless you have evidence (such as assignment to another entity) what makes you think they sold it? You seem to be in the opposite position of most people. Usually it is the trustee and/or servicer for the REMIC trust doing the UD. That can be dealt with through evidence codes and leveraging your own copy of the Note and Deed of Trust; but in your situation if I am understanding what you wrote, you first have to find evidence that they sold it to someone else.

  3. Great information specifically what part of UCC Article 8 is being cited in the remark
    “By the METHOD of pooling and tranching, they converted from negotiable to non-negotiable instrument. (Article VIII UCC).”

    Article 8 has many reference and was not sure were to start.

    Thanks & God Bless

  4. In foreclosure…thebank says it has the original note….how do i know if this is a genuine note..or if what they’re telling me in true…this is one of these mers thing…also, the original note was with countrywide and now with bank of america,,,how do i fight them and make sure the note is genuine and not just take their word for it?

  5. [...] Fargo « 8th Circuit Comes Down Heavy for Homeowners on TILA Rescission How securitization nullifies the original note and mortgage. The Originating Lender is PAID IN FULL [...]

  6. In addition to the previou question. mers has been deactivated and so has the min# since 2002. mers says that the last known servicer is the FDIC as receiver for netbank.

  7. what recourse do i have with the fdic who will not issue a sastisfaction of lien. I sent the fdic the note stamped paid in full a copy of the mortgage to be satisfied and all paper work referencing how they are the receivership. The lender rbmg aquired by netbank then was closed by the fdic on sept 28 2007. My note was satisfied in 2004. The fdic said there was an assignmnet at the ROD, by rbmg via mers dated march 2009. Isn’t that a crime how can assets once in fdic receivership get assigned by a defunt company in the fdic receivership and why won’t the fdic satisfy the mortgage.

  8. please email further comments to me.

  9. Again the challenges to a securitization are that no court will likely rule soon on this matter as it will open the flood gates.
    My contention is the source of funds and why does each player (big five) own a FSB. I believe an FSB may have originated the wire and that opens up the arguments for an unlawful business combination.

    There you have a disclosure violation where MERS lists itself as a sole and separate company.

    Also where is the acceptance originating from – Wall Street or Street delegated system? You must see the PURCHASE AND SALE commitment.

    Your most compelling conflict is with the SEC guidelines for a 401 D Registration and HUD regulatory enforcement.

    The acceptance and wires MUST originate free of any influence and subsequent determinations of concentration of product mix and delivery to or by one source is a controlled business arrangement.

    No can do!

    msoliman
    admin@borrowerhotline.com

  10. I have an interesting twist to this, and a question… my original mortgage company went out of business, they simply closed up shop one day, no warning to anyone. The company was called HomeBanc, located in Atlanta GA, they went out of business in August of 2007. Eventually, Chase sent notice that they were the ones who now “held the note”, they were who we paid for about a year and then AHMSI began “servicing” the note. I have received notice of intent to foreclose (today). I have tried many times to contact AHMSI, but continually wind up with someone from Indai who a) can not answer my question or b) can not seem to understand that I want to keep my home and wish to work something out. What can I do in a non-judicial state?
    Thank you!

  11. Our loan is associated with Fannie Mae (on credit report) though it does not show up in SEC filings as being securitized by the originating “lender” and neither does it show up as as a retained Fannie Mae “whole loan” on their Internet site. We therefore believe our loan was securitized by Fannie Mae into one or more pools of loans in Fannie Mae MBS.

    Fannie Mae seems to claim exemption from SEC reporting regulations that require other securitizors to list loans in MBS pools via 8k filings. Does anybody have any advice on how to find Fannie Mae loans in Fannie Mae MSB pools? Is this information an impenetrable “trade secret” that Fannie, Freddie and Ginnie can advantage themselves of thru some SEC regulation exemption?

    Thanks in advance.

  12. IF YOU REALY WANT TO MAKE A DIFFERENCE POST AN ALERT TO ALL READERS TO GO TO http://www.PetitionOnline.com & START AND/OR SIGN PETITIONS ABOLISHING THE FEDERAL RESERVE, RESTORING THE CONSTITUTION, FIRING OUR ENTIRE CURRENT CONGRESS & GETTING RID OF ALL REGULATORS THAT DON’T REGULATE. Thomas Jefferson saw this day coming……

  13. Neil, I have done all of those things(VODs) , retained council, filed a claim in federal court and the best settlement my attorny can come at me with is sign a general release of all claims known or unknown and they will continue the foreclosure through til the end of may. I thought banks were required by law to at least try to negotiate the terms down so how is that negociating by having my lawyer tell me forfiet all rights & claims you have & we’ll give you until may to refinance & pay off your ridiculously fee steroid pumped loan balance in full with the damage we’ve done to your credit improperly and aren’t willing to remove assuring the repeat process of the foreclosure that was cunducted in july that was just 20 after the alledged assignment(while in default) even having received & accepting a payment, but said ehh what the heck even thogh we said we’d stop it lets go ahead & foreclose & then record the assignment after the trustees deed but then rescind on the whole thing just to mess with him. oh yeh did I mention it seems that both my attorny and litton is just ignoring my demand for rescission claims for leaving the expiration date blank on the 3 day ROR which was found to be a tila violation in federal court.. I don’t think that the banks or any corperation, regulator, member of congress etc… gives a damn what happens to us seen as they all took the liberty to give themselves bonuses bribes pay raises etc… with our money with the givin nudge nudge wink wink from the FAKE ass FED & FRB and now being backed up by the president while they shove it in our face by allowing the foreclosures to continue even after being ROBBED OF OUR FUTURE!!!!!

  14. YOU don’t have to prove it. You should be using debt validation letters and challenges, qualified written requests and seeking court orders requiring them to provide answers and documents or lose their right to claim status as a creditor and lose their status as a secured creditor. THEY have the information. But you can glean the probable chain of events if you get a forensic review from an independent expert or, if you feel up to it, do it yourself. Go back to your original loan documents and see who is the originating “lender.” That would be the payee on the note. See if the same name is used as beneficiary on the deed of trust or the mortgagee on mortgage if that is what you have. The GOOGLE the name of the originating lender and then put a space and then type “8k”. Example “EMC Mortgage 8k”. You’ll find that virtually all mortgages like yours were securitized, that this is public record with the securities and exchange commission and that is enough to shift the burden to the would-be forecloser to prove that they have the note, that they are secured by the mortgage, and that the note was not sold or transferred, ending up as a security in the hands of an investor who has since been bailed out by insurance, credit default swaps, cross collateralization or Federal bailout from the Federal Reserve or U.S. Treasury.

  15. As of and for the year ended November 30, 2005, EMC Mortgage Corporation (the “Company”) (a wholly owned subsidiary of The Bear Steams Companies Inc.), has complied, in all material respects, with the Company’s established minimum servicing standards for residential mortgage loans as set forth in Appendix A (the “Standards”). The Standards are based on the Mortgage Bankers Association of America’s Uniform Single Attestation Program for Mortgage Bankers.

    As of December 1, 2004 and for the fiscal year ending November 30, 2005, the Company had in effect a fidelity bond in the amount of $210,000,000 and an errors and omissions policy in the amount of $20,000,000.
    /s/ Raylene Ruyle

    Ralene Ruyle, President

    /s/ F. Norton Wells

    F. Norton Wells, Executive Vice President

    /s/ Sue Stepanek

    Sue Stepanek, Executive Vice President

  16. hi nye , i am in battle with emc mortgage, they said they owned the loan but they did not own the loan, please email me a gobb@ptd.net

  17. Love to see some pleadings with this strategy as well as any case cites and rulings if you have! Thanks!

    Nye

  18. Neil, how do i prove that my lender has already been paid in full and that they sold it to an investor? My lender is Wells Fargo and they Foreclosed on my Home in February 09 and now they are trying to evict me. In the unlawful detainer paperwork served to me, it states that “Plantiff acquired ownership of the property by purchasing the property at Trustee’s sale. At the trustee’s sale, the property was sold to the plaintiff in accordance with California civil code section 2924, under a power of sale contained in a deed of trust made and executed by defendants or by a person through whom defendants claim a right to possession of the Property. Plaintiff’s title under trustee’s sale has been duly perfected and is evidenced by a duly executed and recorded Trustee’s Deed Upon Sale (“Trustee’s Deed'”) A true and correct copy of the Trustee’s Deed Upon Sale is attached hereto as Exhibit I and incorporated by this reference as though fully set forth as length”. So what does prove? Neil any thoughts? Thank you so much for this site Neil, Jim, California

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