Securitization in Review at Trial

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Like rescission, if you start out from the wrong place, you get eaten alive by the arguments of counsel for the banks and servicers. Assume nothing. All of it is a lie. For example take the case of the Chase WAMU merger. Chase has argued in different venues that they did acquire the loans, that they didn’t acquire the loans, that they acquired the service rights and that they didn’t acquire the servicing rights. How did Chase acquire ANY rights over a loan that was previously declared to be sold to a trust where the Trustee and servicer were declared to be other parties — especially when the Trust never actually acquired the loan?
It is not correct to say that no assignment was necessary between Chase and WAMU. It is also not correct to assume that Chase could have acquired the loan — since it was obviously claimed to be “securitized” in a WAMU trust. Hence WAMU either (a) never funded the loan in the first place or (b) sold the loan immediately into the secondary market where it was allocated to (even if it was not purchased by) the Trust. So the assumption that Chase ever owned the loan is most likely wrong. Chase MAY have acquired the servicing rights. But probably not. Even if they can prove they are in privity with the trust, that is irrelevant if the Trust never acquired the loan.

But the servicing rights exist only by virtue of the provisions in the Pooling and Servicing Agreement. There are no other documents showing the transfer of servicing rights or even the original grant of servicing rights as to this loan. At trial they will attempt to surprise counsel for the homeowner with a “power of attorney” or some other document that does not actually transfer rights and comes from a party who has no ownership or rights to enforce the loan. They have disclosed that they will introduce the PSA as evidence in the trial. But the loan most likely never made it into the trust. If that is true then the PSA is irrelevant as to the loan because it only deals with loans owned by the trust. They always decline to show us any transaction in which the Trust paid money for the loan.

The reason that they are (a) not claiming holder in due course status and (b) won’t show us that the trust actually paid for the loan is that the trust didn’t pay for the loan. In actuality, legally speaking, they destroyed the possibility of using the note as a negotiable instrument and raising the assumptions and presumptions that attach to holding a negotiable instrument. THAT results in proof of debt and proof that the debt is secured by the mortgage as to some lender in the chain, since they are not alleging holder in due course.

They probably can’t do that because WAMU was in actuality acting as a conduit and sham nominee for undisclosed “lenders” — a direct violation of the Truth in Lending Act and Regulation Z issued by the Federal reserve which dubs those loans as table funded loans and predatory per se.

Predatory per se means that it is against public policy. Since the essence of the transaction was against public policy, the court should declare that the foreclosing party has unclean hands. If the foreclosing party has unclean hands then it should not be permitted to prevail in a court of equity — in other words, the equitable remedy of foreclosure is not available.

The problem we have is that the Courts fail to recognize this analysis most of the time. They focus on the fact that the borrower has been declared in default because the borrower stopped paying. And the court further assumes that the declaration of default is (a) authorized and (b) true. Neither one is correct.

If the foreclosing party has no legal right to collect on the note or foreclose on the mortgage or even to enforce the debt in equity, then the issue of whether the borrower stopped payment is irrelevant — because the actual “creditor” or potential “claimant” has NOT declared a default (most probably because they are receiving advance payments to give the impression that the loan was performing even though the servicer had declared a default) and because the reason they have not declared the default is that they have been paid..

The servicer declares the default in part because they want to recover servicer advances, which makes them the real party in interest. But the servicer’s interest is NOT secured by the mortgage because the servicer and the borrower were never in privity and the servicer has not been assigned the mortgage. And since the creditor(s) have been paid, there actually is no default event and the declaration of default by the servicer was for its own interests, which are in conflict with the interests of the creditor who has not experienced any shortfall or default. Hence the foreclosure is wrongly used as a means to collect on the servicer’s claim for unjust enrichment for having advanced funds “on behalf” of the borrower (as a volunteer).

The borrower didn’t create this situation. This was purely a scheme of the Wall Street banks who discovered they could sell out an IPO for an inactive trust and keep the proceeds of sale of securities issued by the trust.

At trial the robo-witness  is usually a corporate representative of the servicer, not the Plaintiff (foreclosing party). This person usually has had no access or knowledge as to what is on the books and records of the creditor. They, at best, only have information about what their employer has — which is  partial snapshot of the payments made by the homeowner to one or more parties who wrongfully claimed to have an interest in the the loan. It is generally assumed that if the borrower stopped making payments that a default exists — but not if the creditor continued to receive payments under the heading of “servicer advances” or any other third party payment.

Those advances are NOT a liability of the Trust or the investors/beneficiaries. But the servicer has a claim for payment out of the proceeds of recovery from only a failed Loan, which means it is in the interest of the servicer to declare the default or failure of the loan even if that action is against the interests of the creditor and the borrower. So the servicer does NOT get paid unless the servicer is successful in declaring and enforcing a default in foreclosure, which is to say only if the servicer is successful in convincing a judge to ignore the reported status of the debt on the books of the actual creditor.

Since the interests of the service are not aligned with the creditor, the records they seek to introduce in court lack the element of trustworthiness required to qualify as an exception to the hearsay rule under the business records exception. This is how thousands of borrowers are winning their cases — but you don’t hear about it because they are paid by the banks and servicers to execute a confidentiality agreement, so the case can’t be publicized. Thus it appears that the banks and servicers are a monolith that cannot be defeated, when in fact they are losing all the time.

28 Responses

  1. I am trying to help someone find their Pooling and Servicing Agreement. The information is below:

    M ERS #: 100091805003039211 SIS #: 1-888-679-6377
    Date of Assignment: March 6th, 2012
    Assignor: MORTGAGE ELECTRONIC REGISTRAT ION SYSTEMS . INC., AS NOMINEE FOR RESOURCE MORTGAGE BANKING, LIMITED, ITS SUCCESSORS AND ASSIGNS at BOX 2026 FLINT Ml 48501 , 1901 E VOORHEES ST STE C., DANVILLE. IL 61834
    Assignee : US BANK NATIONAL ASSOCIAT ION, AS TRUSTEE FOR ADJUSTABLE RATE MORTGAGE TRUST 2005-2 , ADJUSTAB LE RATE MORTGAGE-BACKED PASS-THROUGH CERTIFICATES, SERIES 2005-2 al 4801 FREDER ICA STREET, OWENSBORO , KY 42301

    · Executed By: HUSBAND AND WIFE AS TENANTS BY THE ENTIRETY To : MORTGAGE ELECTRONIC REGISTRATION SYSTEMS, INC., AS NOMINEE FOR RESOURCE MORTGAGE BANKING, LTD., ITS SUCCESSORS AND ASSIGNS
    Date of Mortgage: 12/10/2004 Recorded: 12/20/2004 as Instrument No.: 2004-255773 In the County of Honolulu, State of Hawaii.

    Property Address : 82-6291 MANIN! BEACH ROAD, KEALAKEKUA, HI 96750

    James Smith: jsmith5915@msn.com or 443 677 2799. Thanks

  2. You are correct, louise. We have copies of notes from multiple players. They ALL claim they are originals, He, He, He, right! Impossible, as they have the bar codes in different places and sizes, signatures are different, one even has initials, which are the wrong initials for the person claiming to sign, it’s laughable.

  3. Poppy, remember the play book that is used by debt collectors is very similar to the debt collection (foreclosures) on real estate. None of them have the appropriate and legal trail of documents to prove they own the debt. Your ignorance is used to collect illegally from a debtor. They do not have the documents, ever! They sell the notes multiple times. The beginning of the trail does not lead to the end of the trail.

  4. ian, it’s been over a year since we viewed the “satisfactions” one right after the other, Maricopa, AZ sticks in my head. The loan numbers were not recognizable, I believe this is why they were changed to hide the pay-off. Las Vegas had thousands of Holding Companies start up in 2011.

    BOA, Wells and Citi were major players….why, we asked? I need a little time to reflect. You may be right, we just have our own opinion on why the mortgages would be “sold”, “liquidated”, “borrowed on” OR transferred into bonds. Our conclusion is: to move them through the system (make copies, of course) and resell them, assign and/or transfer the copies to trustees, debt collectors, etc….it made sense to us.

    We deduced; since our note was being foreclosed on by the “supposed” trust, which is gone, closed, no assets since August 2007. There is zero possibility they can foreclose in the trust name in 2012, 2013….the losses were extinguished when they (DB Trust with New Century) were creditors in bankruptcy and made whole by the Delaware court. Now, who is the real player….we think the holdings companies are doing the dirty work and hiding behind the substitutions of trustee and assignments….the loan numbers have been changed 4 times. WHY? And why all the holding companies….and satisfactions of notes, minute after minute, day after day! The only play that made sense to us.

    I’ll get back to you on more…

  5. Ian, my alleged note was issued by American Brokers Conduit They went belly up in August 2007, about a year an a half after I alleged signed it. Several of their executives were actually arrested for some kind of fraud and one went to jail. The documents when they closed down suddenly and let go the entire staff, were left in the parking structure near their headquarters on Long Island at Melville, NY.

  6. Poppy- i had believed that the notes
    Were held at various Iron Mountain document storage facilities across the US. Where can one go and pay to view docs? Is there a list ? I have never heard of this. Thanks

  7. NG: “At trial they will attempt to surprise counsel for the homeowner with a “power of attorney” or some other document that does not actually transfer rights and comes from a party who has no ownership or rights to enforce the loan. ”

    jg: sure like to see someone shut down these bogus instruments

    NG: “They have disclosed that they will introduce the PSA as evidence in the trial. But the loan most likely never made it into the trust. If that is true then the PSA is irrelevant as to the loan because it only deals with loans owned by the trust. They always decline to show us any transaction in which the Trust paid money for the loan.”

    jg: so the psa is not a purchase and sale agreement? what document identifies loans with specificity and the amt being paid? (I have never seen a psa which identifies loans with enough specificity to id a particular loan – but I’ve only seen a few psa’s – one psa I saw id’d loans by loan amt and zip code only!)
    If they are introducing the psa as evidence, evidence of what exactly would you say THEY think it will evidence? Please tell if you have some idea.

  8. Oh yes Poppy! It took me 4 years to get that satisfaction of mortgage filed.

    Yet BOA stepped in and claim advances on taxes and INS .
    Bah Ha Ha Ha……

    They can not keep lawyers…they drop like flies.
    They are trying to get out of CW liabilities.

    Not on my Watch!
    Not at my Expense!

  9. Yes JG…Private Placement Memorandum. .PPM
    They require 2 Trusts.

  10. It is my opinion only, louise: the notes are paid in full and stored around the country from Holdings Companies. There are thousands of them that sprung up in 2011. I have checked hundreds of them, some by the way cost over $600.00 to get into, when they are supposed to be “public accessible”, I believe. Anyway, I found hundreds of satisfied notes, minute after minute in places like Maricopa, AZ and cities in NV, VA….forget the names of the cities off the top of my head, son helped me, he would remember. Anyhoo, that’s just a toad observation.

    What does anyone think the chances are thousands of people paid off their mortgages, one minute after the other, day in and day out? ZERO, is my answer

  11. from a Prospectus:

    “NIMS Insurer

    One or more insurance companies (together, the “NIMS Insurer”) may issue a financial guaranty insurance policy covering certain payments to be made on net interest margin securities to be issued by a SEPARATE trust and secured by all or a portion of the Class CE Certificates, the Class P Certificates and the Class R Certificates.”

  12. “The creation of NIMS is facilitated by the fact that numerous securitized mortgage pools contain subprime mortgages with interest rates that are much higher than the typical rates offered to mortgage-backed security (MBS) investors. The bigger the difference in these interest rates, the more the excess cash flows generated by the MBS and consequently the higher the value of the NIMS. Of course, the value of the NIMS can decline rapidly if there is a significant increase in the default rate of the mortgages held in the MBS, and a subsequent decrease in excess cash flows.”

    “How it works/Example:

    When the homeowners make their mortgage payments, the proceeds make their way to the holders of mortgage-backed securities (MBS) that securitize their mortgages. If for any reason (interest rate differences, for example) the payments from the homeowners exceed the principal and interest payments owed to the owners of the MBS, the excess cash flows go into a trust account, and holders of NIMS are entitled to the excess cash flows in the trust account. The NIMS investors also often receive senior claims on the receipts of any prepayment penalties on the underlying mortgages. This speeds up the repayment to NIMS.

    NIMS are typically bought in private placement transactions or by investors who specialize in the mortgage business.”

    No secret this hasn’t been my thang. Am I getting this right: loans may pay more money than what is promised the secn trust investors by way of their derivative certs (say when bs teaser rates go up or because while the average rate in a pool may be 6%, the investors buy in at 5%). OTHER people are buying and or have a right to any excess (over the 5%, say) received in payment on these loans? So someone other than the bens of ‘XYZ 2006-A Series’ is also a creditor (if only in regard to the excess over the rate sold to the trust investors?) How then may a trust (just one) be the one and only party named as the assignee of these loans? Both groups have bought derivatives, right, on the same loans? WTH? Anyone? Did the banksters buy or reserve the “excess” , the nim, and is that (at least part of) what they insured with NIMS insurance? It matters not imo whether or not any excess (over the 5%) were received; it’s the fact that it could be that sets the stage for real answers. imo.

    In trying to research NIMS insurance, I came across this interesting, easy-reading article from Levitin in 2008 explaining why we’re not getting modifications (and imo despite the millions accepted to do modifications, long and short) :

    http://foreclosuredefensenationwide.com/?p=82

    Oh, yeah. Mers. I still can’t believe “mers” had the nerve to take homes with credit bids when they were foreclosing in mers’ name. How would mers be entitled to a credit bid even if mers could foreclose, since mers had no interest in the coll instrument and certainly not the note? Not that I believe mers can do jack, but it’s one thing to f/c and sell to a third party and another to make a credit bid as if one is entitled to it. imo. I just read an old case where mers made a credit bid at sale, was the grantee on the trustee’s deed, and then assigned to the servicer. Blanking eh. Not!
    MERS HAS TO GO.

  13. Take #6

    The Trust is Expressed in the Instrument that creates the Estate!!!!!!

    Attack the Contract!!!!!!

  14. After the note was “sold” into the trust, it cannot be sold again. How many advances did we have going on right from the beginning? Our loans/notes have been paid off more than once. In fact, the notes have been sold multiple times. Where are the records of that?

  15. Call and ask them who the Original Creditor is…..

    😜

  16. If you need help grasping the import of the evidence issues, call us at Consumer Rights Defenders with short questions and we shall try to assist. 818.453.3585.

  17. Bite those Ankles Hard….
    Make sure they can’t Stand!
    ….. 😹🐾🐾🐾🐾🐾🐾🐾🐾🐾🐾🐾🐾🐾🐾

    Scratched!

  18. Take A Bite out of Crime!

  19. And that myth ” honor amongst theives” its just that..
    Let the ankle biting commence

  20. Java
    Truth us truth no escaping it i look forward to justice being served up on a huge platter

  21. They don’t want the house…..
    They want to BK the Estate!

    $150,000 note vs $1.5 million $ estate.

    Somebutty owes me a lot of money!

  22. Funny. Now all correspondent letters I get from BOA says the Servicer of your home loan.
    Never ever used to say that !!!!
    I’m pretty sure this fraud will unravel completely before the 2016 election.
    Keep on fighting the good fight. Hope the good guys and Truth finally win.

  23. They hear me Now!
    I am pretty loud……

    🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵🎵

    Music to the Ears…
    Calms the Soul…
    RockIn…&.Rollin…

    Lets Ride!

    Many Blessings to All!

  24. SC
    I hear you

  25. The Trust is in the Instrument that created the Estate!

  26. What have I been saying? If these guys stop being so hard headed, and first start at the easiest to prove and that would be the Ginnie Mae Mortgage Backed Securities (MBS) that WaMu created and sold.

    Servicing right are only as good as who is the owner of the debt. As WaMu no longer has physical possession of the blank Notes and has since gone out of business, then it has no financial interest and the alleged servicer no longer had a valid agreement to service the loans, as the party that granted the servicing agreement does not exist any longer.

    Wells Fargo Bank is foreclosing on these loans while having MERS create forged titles and performing illegal foreclosures. Wells Fargo already admitted they are not “holder in due course” but these clowns are still foreclosing on loan properties they nor anybody owns a debt.

    The homeowners had nothing to do with the securities!

  27. Sooo…. If the borrower is the lender…who is the Creditor?

    What do I look like… chopped Liver?

  28. Volunteer Servicer Advances!

    Ummm….. If I need help paying my bills…I will ask for help.

    ****** SERVICER ADVANCES WHAT I ALREADY PAID*****
    And tries to collect again from my husband (the borrower on the note).

    You con me into transferin my life estate irrevoirrevocably the Instrument that created the Estate……there is a name for that.

    If they breech….you Enforce!

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