Probably the most misunderstood aspect of the securitization process is that the banks are able to claim there was no securitization when in fact there was. This is especially true in GSE’s like Fannie, Freddie, Ginny and the VA. When you are researching loans you hit a brick wall when you get to the GSE. And there are terms thrown around like smoke and mirrors that this was or this is a Fannie loan and that therefore the loan was not securitized. This is wrong.
None of the GSE’s are lenders. They don’t loan money to anyone. So if the allegation is made that this was a Fannie or Freddie or VA loan from the start, then the originator was not the lender and neither was Fannie or Freddie or any other GSE. These are strictly guarantee agencies who don’t part with a nickle until the loan is foreclosed and the home is sold. THEN they guarantee up a certain amount and pay it out, drawing from the US Treasury as necessary.
All the loans that were considered GSE loans from the start constitute an admission that the loan was securitized or subjected to claims of securitization. Fannie and Freddie for example have a Master Trustee agreement in which they do nothing but they serve as the Master Trustee for asset-backed pools that have a regular trustee (who also does nothing). These pools are REMIC trusts.
As you can see from the attached files,if you will read them carefully, you will see that the custom and practice of the GSE was, if it guaranteed the loan, to serve as either the conduit or the Master trustee for an asset backed pool where the trust beneficiaries funded the origination or acquisition of the loan. This is a factor that did not get adequately covered in Shack’s excellent opinion recently in New York where he chastised Chase and others for playing with the ownership of the loan to suit the need for foreclosure instead of presenting facts that would protect the people who are actually taking a loss.
Filed under: CORRUPTION, evidence, expert witness, Fannie MAe, foreclosure, foreclosure mill, foreign relations, GARFIELD KELLEY AND WHITE, GTC | Honor, investment banking, Investor, MODIFICATION, Mortgage, Motions, Pleading, securities fraud, Servicer, Student Loans, TRUST BENEFICIARIES, trustee | Tagged: Fannie, Ginny, government guaranteed mortgage loans, GSE, ownership of the loan, securitization, VA Loans |