Wall Street “Securitizing” Everything

BIG PROFITS FOR WALL STREET,

LOOMING LOSSES FOR INVESTORS AND BORROWERS

===============================

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THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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I wouldn’t grade this quite up to “self-policing” but Deutsch is now counted as one of the banks that does not think it was so smart to take fees for being the fake trustee of an empty trust whose mortgage backed securities were being sold on multiple false pretenses to investors who assumed that if Deutsch was the Trustee they would perform due diligence. Nobody read the fine print. Nobody checked the money trail.
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Now investors and other co-venturers are placing themselves among those who were duped by the Wall Street myth of securitization. In plain language, the banks wrote up a trust or some other special purpose vehicle and wrote out the duties and even eliminated the authority of the Trustee to inquire, examine or audit the things being done in their name. At first the “Trustee” banks thought it was a great idea — no work, no duties, no risks, and expenses — just collect fees for being and doing nothing. Their name was being rented to give MBS and ABS the illusion of being solid investments. Anyone who has seen “The Big Short” or other similar movies and books knows that was never true. But it  also turns out in lawsuit after lawsuit that the Trustees DO have risk.
 *
And that makes for a mixed pot. In some cases investors are suing the Trustees, as are borrowers, for being part of a scheme where the money invested was to have been managed inside a Trust administered by, say Deutsch, even if the money was not in their Trust department and even if the “Trust” never even had a bank account. None of that ever happened. [And by the way this is the reason why the “new normal” in the mortgage marketplace consisted of intentional destruction of loan documents, fabrication of loan documents, forging assignments, robo-signing — and robo witnesses who when push comes to shove don’t know anything other than what is on the paper they are holding as “business records.”]
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In other cases the same “Trustees” that are being sued are trying to cover their tracks by suing the investment bank/Master Servicer for stealing the money or intentionally making bad loans devaluing the value of the imaginary portfolio that is actually in a giant slush bucket.
 *
So Deutsch here is being a little more proactive. The reason is that despite the restrictive contractual language in the pooling and servicing agreements, there is nonetheless statutory and common law duties for those who are named as Trustees, whether they like it or not and regardless of how much they are paid. If Deutsch is named as Trustee over the money the investor is about to invest, and knows its name is being used for that purpose, the PRIMARY responsibility lies with Deutsch to at least make sure that the Trust gets the money from the sale of MBS or ABS from that “Trust.” Secondly, the “Trustee” has a responsibility to peek under the hood despite the prohibitions in the Pooling and Servicing Agreement. We have gone far beyond the stage where Deutsch could plead that they had no knowledge of what was really going on.
 *
The announcement by Deutsch is a message to regulators that it is self-policing itself and will report on the unsafe or nonexistent loan portfolios. Some of you might remember that Deutsch already was a little proactive when it sent out a memo to all servicers saying that nobody should use the Deutsch name in foreclosure actions because they are not the Plaintiff. That was around 2010.  That didn’t stop people from using the Deutsch name as Trustee for the XYZ Trust — or as Trustee for the holders of certificates (which would be an entirely different trust than the one described in the pooling and servicing agreement — meaning that Deutsch never agreed to be THAT Trustee for the holders of certificates).
 *
At the end of the day, everyone knows everything. Whether the loan is for real estate, a car, a boat or even student loans, there are multiple defenses that can be raised — not because securitization is illegal, but because there was only the false pretense of securitization. The investors got nothing and the borrowers were being convinced they were getting free money. Next time someone says “just sign here”, think about it.

22 Responses

  1. Years ago i remember a conversation with a guy that had ( and sold) his bank i asked him what he thought about our current state of affairs re securitization which was about 2011 rough guess, he saud they will securitize a darn cow for its potential milk flow – words to that effect.

  2. I have found another link for the Secty of State in Texas.
    http://www.sos.state.tx.us/corp/foreignfaqs.shtml#required1

    “Must a foreign business trust qualify or register to transact business in Texas?

    Yes. A foreign business trust has been required to register with the secretary of state if it is transacting business in Texas since January 1, 2006, “

  3. Greg, Michael, Please see this link about REGISTERING a trust in Mass. and Washington State. http://www.sos.wa.gov/corps/MassachusettsTrustRegistration.aspx.

    As for MERS, there have been many cases going both ways, but MERS in its own dox says it is a “nominee” and does not own anything. The IL case cited, has a “dumbly thought out”, IMHO, scope when there is so much more out there to use against MERS.

  4. MERS can’t make up its mind whether or not it exists… and then WHICH of the many MERS entities is being referenced…
    further- i wonder how they arrive at the statement that “MERS…“does not engage in the acts of brokering, funding, originating, servicing, or purchasing residential mortgage loans.”
    are they an agent? are they a principal? are they a ghost?

  5. it is the judge who is the buzz-kill… don’t shoot the messenger… lol
    let’s see if it goes to appeal…

  6. Thank You BDL; greg as usual, is a buzz-kill… lol

  7. MERS Wins Victory in Illinois Court Over Authority to Act as Mortgagee

    http://www.dsnews.com/news/01-06-2015/mers-wins-victory-illinois-court-authority-act-mortgagee

    MERS IllinoisAn Illinois court ruled on Tuesday that mortgages naming Mortgage Electronic Registration Systems, Inc. (MERS) as the mortgagee are valid and enforceable, according to an announcement from MERSCORP Holdings, Inc.

    In the case of CitiMortgage, Inc. v. Schak, Judge Mitchell L. Hoffman on the Circuit Court of the 19th Judicial Circuit Court for Lake County, Illinois, rejected a borrower’s claim that a mortgage naming MERS as the mortgagee was invalid because MERS is not licensed under the Illinois Residential Mortgage License Act. Hoffman’s ruling was that MERS not being licensed under the ACT was not sufficient grounds for declaring the mortgage void and unenforceable.

    MERS was named as the mortgagee on the mortgage at the time it was originated. The borrowers had filed a motion to vacate the summary judgment and the order that approved the sale of the foreclosed property.

    The judge used as legal precedent the Seventh Circuit Court of Appeals ruling in Union County, Illinois V. MERSCORP, Inc. from January 2013 that the requirements of the Illinois Residential Mortgage Act, which was passed in 1987, do not apply to MERS because it “does not engage in the acts of brokering, funding, originating, servicing, or purchasing residential mortgage loans.”

    “We are pleased that this Court recognizes that MERS has not done anything contrary to what is required by Illinois law and that mortgages naming MERS as the mortgagee are valid and enforceable,” MERSCORP Holdings Vice President for Corporate Communications Janis Smith said.

    MERS has won victories in courts in several states in the last year over borrowers facing foreclosure who challenged the company’s authority to act as mortgagee, including Massachusetts, Rhode Island, Ohio, New Hampshire, Montana, Idaho, Arkansas, and Texas.

  8. Michael Keene,

    Excellent post! You can also go on their website NY or Delaware and type in your ‘trust’. This also shows the trust does not exist.
    Two critical pieces of evidence for any bank claiming to be a ‘trustee’ of a non existent entity.

  9. And, while some of you may find me annoying, I do apologize, even as I ask you to post this rant (below) wherever and however, you may see fit to do so.

  10. I am posting the following anywhere I can.

    The simple fact of the matter is, as any Fraudclosure and victim of forgery can attest is that the banks are totally out-of-bounds… and they always have been… at least since they were allowed back in after Andrew Jackson, first, threw them out.

    Read the Constitution: Specifically, Article 1, Section 8. It NEVER makes ANY allowance for a privately-owned, international banking cartel to sit, athwart the American Currency System…

    And yet, that is precisely where We The People now find ourselves, complete with any number of bumps, bruises and fatal contusions We have met, courtesy of criminal behavior along the slippery slope of criminal intent that is OUR PRESENT “JUSTICE? SYSTEM?”.

    ANY support for Hillary Clinton is a support for the status quo and contrary to the well-being of the US Dollar as it currently exists as the “Sovereign Currency”, or “International RESERVE Currency”.

    The “central banks”, the world-over, are insolvent and they are resolute, in their refusal to open their books for inspection, as is expected through disclosure of “M3”- an aggregate of banking assets versus liablities.

    There are, presently, 1200 Trillion Dollars owed (google “Quadrillion”) to an international shortfall in central banking, described as “Notional Derivatives”. These “derivatives” are simply, “short sale bets” predicated upon fraud.

    Google: “Lynn Szymoniak”.

    To begin to understand the importance of “derivatives” and why they are a threat to the US Dollar, go watch Michael Lewis’ new movie, “The Big Short”.

    Put simply, after his probe of Monica Lewinsky, while facing impeachment, Slick Willy went on a double date with three republican senators,: “Graham, Leach and Bliley”. The “Act” that bears their name suppressed “Glass-Steagall” and opened the door to: “PHONY SECURITIZATION”; “BOGUS TRUSTS”; “THEFT OF PENSION PLAN FUNDS”; “SUBPRIME LENDING”; “SHORT-SALE BETS: AKA, CREDIT DEFAULT SWAPS, COLLATERALIZED DEBT OBLIGATIONS”; “NOTIONAL DERIVATIVES”; TREASON”.

    The banks destroyed themselves through subprime lending- the emperor has no clothes- the banks have not allowed inspection of their books (“M3”), since 2006.

    Thanks to the Clintons and their 3 republican playmates, in the aftermath of the demise of “Glass-Steagall” and subprime lending, the banks next experimented in “Notional Derivatives”, that are, in turn, predicated upon forgerys and fraud.

    Google: “Securitization Fail”. The pension plans have been robbed, as has the middle class and it is an intentional scam.

    Donald Trump’s rudeness to HillBillary is a scam, no less than “Benghazi”, insofar as it is a direct attempt to provide her further victimhood and thereby influence the simple-minded.

    The Clintons are a very real threat to the national security of the US because they, and their elitist minority PALS are fixing to disrupt property rights, here and abroad; the rule of LAW, here and abroad; and ultimately debase the US Dollar.

    Right NOW, the criminal banking elites and their playmates, the Clintons, are desperate to conceal the fact there isn’t one, single, REMIC TRUST that is legitimate- all the “pools of loans (REMIC TRUSTS)” are defective and the foreclosures are the product of forgerys and FRAUD!!!

    If you are facing foreclosure: find out which “Trust” claims they “own” your debt. Then find out which state, either Delaware or New York, they claim to be registered in. Then contact the secretary of state they claim to be registered in… BIG SECRET: they never applied to do business- they are a legal NON-ENTITY. They can’t sue anybody for anything!

    Get a letter of “Attestation” from the secretary of state that shows they aren’t registered. Do a “Freedom of Information Act” to that secretary of state and then send another to the SEC…

    IT IS PAST TIME THE AMERICAN ELECTORATE RISE UP AND PUT THE CRIMINAL, BANKING FILTH AND THEIR PLAYMATE POLITICIANS IN JAIL!

    PLANT MORE ACORNS, THE AMERICAN PEOPLE ARE GONNA NEED MORE TREES.

  11. Deutsche Bank has a trust business, and the idiots in the law firms were using their lending name… Allowing Servicers to use your banking name without stipulating “as trustee” opens your entire organization to discovery. Although, they are all a big scummy bunch, this article is simply much ado!!!

  12. What does this mean ?  help available when, where and how ?

    From: Livingliess Weblog Sent: Monday, January 18, 2016 12:22 PM Subject: Wall Street “Securitizing” Everything WordPress.com | Neil Garfield posted: “BIG PROFITS FOR WALL STREET, LOOMING LOSSES FOR INVESTORS AND BORROWERS===============================WE HAVE REVAMPED OUR SERVICE OFFERINGS TO MEET THE REQUESTS OF LAWYERS AND HOMEOWNERS. This is not an offer for legal representation.Our services co”

  13. GOOD REFERENCE (Broad & Historical):

    Real Estate Finance Book

    http://www.firsttuesday.us/course/books/Book_FIN.pdf

  14. Lawsuits can be dangerous to all sides. There is a thing called discovery and, hopefully, they will get some.

  15. Do you know why they didn’t give disclosures

    Because they weren’t the lenders.

    All the above alleged

    NEVER AGAIN

  16. 21st Critics Choice Awards
    “The Big Short” won three awards, for adapted screenplay, Christian Bale for Best Actor in a Comedy, and the film itself for Best Comedy.

  17. They are finally eating themselves!

    Ocwen Sues Foreclosure Mill Connolly, Geaney, Ablitt & Willard, P.C. For Malpractice, Breach of Contract, Unfair & Deceptive Practices, Fraud By Suppression & Fraud By Misrepresentation

    Struggling mortgage servicer, Ocwen Financial is suing multi-state foreclosure mill, Connolly, Geaney, Albitt & Willard, P.C. (CGAW) in a multi-million dollar malpractice and fraud case. In the suit, Ocwen alleges CGAW misappropriated over $1.6 million of retainer fees they received from Ocwen.

    The suit; filed IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF FLORIDA WEST PALM BEACH DIVISION CIVIL NO. 9:14-cv-81046; accuses foreclosure mill CGAW of intermingling the corporate and personal accounts of the managing partners of the firm and were negligent in their management of the trust accounts that held Ocwen’s funds. Ocwen also alleges CGAW and it’s attorneys made affirmative misrepresentations to Ocwen and withheld material information and placed their own interest ahead of Ocwen.

    http://mfi-miami.com/2016/01/ocwen-sues-foreclosure-mill-for-fraud/
    (includes 33 page amended complaint)

    and check who wants a jury…

    “Ocwen hereby requests a trial by jury on all issues triable by jury”.
    DATED this 2nd day of October, 2014

  18. THE PRETENDER LENDER’S THE SHOULD BE IN JAIL AND NOT THEY TAKE YOUR HOME WITHOUT A FIGHT , FIRST OF ALL IF YOU HAD THE $ YOU WOULD HAVE TRY TO PAY YOUR LOAN RIGHT , THEN THEN YOU ARE CONED INTO A LOAN MOD, NOW THE GOT YOU , AS IT CAN AND WILL BE CANCELLED AT ANY TIME OR NOT CANCELLED THEY CAN CHANGE , 1 YOUR PAYMENT , YOUR APR ECT

  19. Effective May 20, 2009 a New Notice is Required to be Given to Consumers Under the Federal Truth in Lending Act Within 30 Days After the Sale, Transfer or Assignment of a Mortgage Loan
    06.04.09
    Jacob “Jake” A. Lutz, III

    The Helping Families Save Their Homes Act of 2009

    On May 20, 2009, the President signed The Helping Families Save Their Homes Act of 2009. The new law contains a number of provisions, including amendments to the HOPE for Homeowners Program, protections for servicers of mortgage loans who modify mortgage loans, and extensions of the credit facilities from the U.S. Treasury to the Federal Deposit Insurance Corporation. However, Section 404 of the Act amends the Truth in Lending Act (TILA) to require that a new notice be given to consumers within 30 days after the sale, transfer or assignment of the consumer’s mortgage loan.

    Notice Requirement Effective on May 20, 2009

    The new notice requirement became effective on May 20, 2009 and applies to any sale, assignment or transfer of a mortgage loan occurring on or after May 20, 2009.

    Civil Liability and Attorneys’ Fees for Failure to Comply

    The new requirement has real teeth because Section 404 also amends Section 130(a) of TILA to provide that the failure to give the notice can result in liability for actual and up to $2,000 statutory damages per violation, plus plaintiff’s reasonable attorneys’ fees. Class action lawsuits can also be brought for systematic violations, subject to a $500,000 cap.

    Section 404 Requirements

    Section 404 of the Act amends Section 131 of TILA to add a new subsection (g) which provides that, in addition to other disclosures required by the TILA, not later than 30 days after the date on which a mortgage loan is sold or otherwise transferred or assigned to a third party, the creditor that is the new owner or assignee of the debt shall notify the borrower in writing of the transfer. The notice must include the identity, address and telephone number of the new creditor; the date of the transfer; how to reach an agent or party having authority to act on behalf of the new creditor; the location of the place where transfer of ownership of the debt is recorded; and any other relevant information regarding the new creditor.

    Definition of Mortgage Loan

    For purpose of the new notice, the term “mortgage loan” is defined to include any consumer credit transaction that is secured by the principal dwelling of the consumer. Therefore, it applies to first mortgage loans, subordinate mortgage loans, home equity loans and any other credit transaction that is secured by the principal dwelling of the consumer.

    Obligation on Purchaser, Assignee or Transferee

    The obligation to give the notice is on the purchaser, assignee or transferee of the mortgage loan and not the seller of the mortgage loan. However, the giving of the notice could become complicated in securitizations and may fall by default on the servicer of the mortgage loans backing the securities issued in the securitization.

  20. SCAM , SCAM, THE DAY YOU SIGN , WHEN U SIGN ON THE DOTTED LINE, THE PAPER IS SOLD SEVERAL TIMES . 9 YEARS I HAVE BEEN AT THIS . STILL IN MY HOME

  21. The entire scam is starting to unravel. When is a trustee not a trustee?

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