UNLESS YOU ARE DELINQUENT
Posted on February 14, 2011 by Neil Garfield
COMBO Title and Securitization Search, Report, Documents, Analysis & Commentary
The question has been asked by so many readers that I figured I would give them my answer on the subject in an article.
The first reason why the pretender lenders won’t help you unless you are delinquent or in default on your payments is pure math: the longer you pay the carrying charges on the house, the longer you pay the interest rate that is over- market, and the longer you are paying to amortize a loan whose principal is far over fair market value, the less time the pretender lender must incur costs and the longer they can stretch out the mortgage mess. Each day they are making more money on the mortgage mess. why stop it?
The second reason the pretender lenders won’t help you unless you are delinquent or in default is that it would require them to justify downgrading a performing mortgage that is held on their books at a much higher level (the original principal due). Of course the loans shouldn’t actually be on their books to begin with, and they are probably not there if you take a close look. What you’ll find are liabilities and assets that were conjured out of thin air in the form of exotic derivatives including synthetic collateralized debt obligations.
And the third reason the pretender lenders won’t help you unless you are delinquent or in default is that it would be a tacit admission that the original “math” used in the origination of the loan, was wrong, at best. In fact, it is quite easy to upscale the reasoning that there is no way they couldn’t have known that the loans they were claiming to be part of a fictitious securitization structure were intentionally misstated through inflation of the appraised value, and skipping all the industry standards for underwriting a loan — standards that are meant to assure the high probability that the loan will be repaid. This admission would clearly be used against them by investors who suing the investment banks in greater and greater numbers and borrowers who so far have not sued the investment banks but limited their lawsuits to the loan originators, aggregators, servicers and of course MERS.
And the reason the government won’t consider helping you unless you are delinquent or in default, is that the decision-makers have accepted the axiom from Wall Street that you don’t deserve it. According to their way of thinking, you signed up for a loan that about which you have regrets. That’s called “buyer’s remorse” and there is, for the most part, no political or judicial doctrine by which buyer’s remorse can be converted into a remedy. The axiom from Wall Street that is taken as self-evidently true is that you misbehaved — you bought a bigger house than you could afford and agreed to terms that you could not afford to pay. Of course what is missing from this “axiom” is that it is wrong. And THAT is why the lawyers in court are concentrating on two things when they represent the pretender lenders — getting the Judge to go head down into the paperwork instead of looking at the facts, and advancing the presumption that the original closing was properly documented.
Thus the issues of whether the documents were properly TRANSFERRED distracts attention from the original transaction. Close examination of the documents signed at “closing” will most often reveal two counter-intuitive issues — first that the actual transaction was between the borrower and an undisclosed lender with terms, fees, conditions and restrictions that were not disclosed in the required pre-closing documents and which were never documented at all at the Closing,” and second, that the documents that were produced and signed at the “closing” refer to a transaction that never took place. The fact that the Borrower accepted the benefits of the funding of a loan gives rise to an obligation or liability, to be sure. But that mere fact that a liability exists does not constitute a substitute for the documentation required by law, or the recording and registration requirements imposed by the State and County. AND the mere existence of documentation with the name of the borrower on it is no substitute for documents contain ALL the required data describing the actual transaction that took place.
In plain language the documents do not track the cash transaction and the cash transaction does not conform to the documents.
So the final answer to the question is that by limiting their “efforts” (false as they may be) to modifications and settlements of non-performing loans, they eliminate scrutiny of the other 80% of loans (performing loans) whose validity and enforceability are at best questionable and at worst actionable for compensatory and punitive damages. And THAT in turns leads to the fundamental question of whether the pretender lender actually has any authority to settle. Of course they don’t. Neither they nor any party they purport to represent was ever the lender or buyer of the loan.
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Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud
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23 Responses
cubed2k, on February 15, 2011 at 10:00 am said:
See, here is how wall st/banks/gov’t keep their game going, keep you in debt game, all the while they keep making money and they pay cash for everything.
Let’s say you have saved 250,000.00. You see a house you like and want to buy, it is 200,000.00. See, they say well it’s better to get a mortgage for 180,000 with 20k down. Your interest is 5%. Now you can earn probably better than than 5% in the stock market or bonds or whatever, so it makes more sense to not pay all cash for the house. See, they kept you in their game. By you making mortgage payments you are in debt, and they then create ABS/MBS out of your debt, AND they get you to invest in their other secondary game of stocks/bonds/etc. And then they boom and bust this cycle over and over, first one group of things – commodities, stocks, now housing.
And when credit=money is easy to get, prices go up like houses, cars, big ticket items, after all by using credit you are buying the monthly payment and the high purchase price doesn’t seem so bad, you can afford the monthly payment. And when credit=money gets tight or hard to obtain, why prices go down again somewhat, but you are trapped in the debt payments. Round and round it goes.
ANONYMOUS, on February 15, 2011 at 6:39 am said:
MSoliman,
Abby is right. And, there is no end — Fed now wants to privatize 90% of forward mortgages with the likes of BofA and Chase leading the way.
Despite everything you say — they are not listening – and have not stopped the abuse in courts — which they KNOW is fraudulent.
MSoliman, on February 15, 2011 at 12:56 am said:
Abby . . . ..Come on ….be nice
MSoliman, on February 15, 2011 at 12:48 am said:
Ian
Good good questions! They take a write down or variable (unknown) open charge on acquisition price or transferring value. Variable for Fixed and for what “Capitation”
Hmmm No can Do !
It’s all condition subsequent AND FOR A REASON (NO ATTY WILL LISTEN) NO CONDITION PRECEDENT ….OKAY FIRST CAUSE OF . . .
FOR A REASON – – Also, who said they charged of the Inventors CAPITAL ACCOUNT stock Trust preferred against Mortgages?
These are reverse repos accounted for as bulk write downs and line item or “spot” reverse entry …..like accretion…get it …
CF transfers into foreclosure . . . each is entered (I guess) as a line item recovery. Deleted maybe –
Debt collector pays cash under Risk Loss Share –CREDIT BID / WTF (Fed – - – Where’s the Fed – - I found them!)
WTF get it …now? Never mind.
N O Bankster’s, Bankster’s and MERS are @!$$#@ are off hanging our other places.
And it’s all in the court now of the bet team one could ever imagine – - –
Robo Signers and the boss …
the FED ! & Debt Collectors
IS THE FED MAKING MONEY! WOW!
HAVING FUN …..You Bet No hobo Robo Jail time
So CREDIT BID BABY CREDIT BID –
Fed uses TARP to act as compensating balances or something …but when you charge assets your closing out accounts , or repossessing homes , or depositor’s funds used to credit warehouse lines…. or ??
Seriously, Its bad deal all the way around and the US tax payer is taking the hit….It’s the opposite of what the congress and Senate envisioned in the great depression.
Brother, take a shot you cannot lose. Try to explain this to others here –in E N G L I S H
I just cannot get through….and these areas of discussion are carving the fat of MERS and etc etc off and striking the bone of contention for preparing for the fight of your life – defending the home .
Do I believe you can win? yes – what’s happening is American ingenuity and it rewards all primary secondary and capital markets – with TAX PAYER MONEY …WOW LOVE IT
But if you fight it will reward you too
….but fight the right fight and lose the AUNTI EM MERS AND ROMANO SIGNITURES arguments, and Notary lies , and Lakers on the road arguments . . .
Call me anytime to cover GAAP and these thought’s
Outstanding Questions.
M.Soliman
expert.witness@live.com
Abby in CA, on February 14, 2011 at 10:31 pm said:
The SEC named Eileen Rominger its director of investment management. She had been Goldman’s global chief investment officer.”
Will the goofiness never end!!
What next? Will the SEC retain Bernie Madoff as an expert witness?
More on Rominger:
The 56-year-old Rominger will start work in February at the division that protects investors and promotes capital formation through oversight and regulation of the nation’s multitrillion-dollar investment management industry, the SEC announced in a statement. For the past 11 years, she worked at Goldman Sachs, most recently serving as the firm’s global chief investment officer.
Ian, on February 14, 2011 at 7:24 pm said:
ANONYMOUS-thanks for reply. In re: most subprime loans were refinances, as of course the borrowers already owned their homes, and had for some time. The public is severely deceived when told, regarding the “subprime crisis”, the “mortgage crisis”, that the people “bought too much house”, bought “more house than they could afford” etc. When in fact they didn’t buy a house, they (most) already owned their homes. Pathetic, and the press has most TV watchers believing this.
Deb wynn, on February 14, 2011 at 6:57 pm said:
Anon and m
Soliman for gods sake hook up
ANONYMOUS, on February 14, 2011 at 6:43 pm said:
Neil puts forth an excellent synopsis in the above. However , (know you hate my “howevers” Neil) — most of the subprime lending — if not 100% — were for refinances — not new home purchases. Although new home purchases are also big subject of fraud, refinances were to homeowners who had already owned their homes for quite some time. The target was the home equity in the home.
As to why no help or mods is considered until delinquency – is because this allows enough time to “bump” the loan out of the securitized trust to debt buyers who are waiting in the wings. This is the way it works for ALL asset-backed securitized trusts.
Many are even victims who were told to default — and then “caught” in foreclosure process. Once a loan no longer has productive cash flow receivables — the loan is useless to the bank. Proprietary agreements then take hold..
M. Soliman is correct — “After three payments the loan is deleted.” — ie— POOF!! GONE!!!!
Kim Thomas, on February 14, 2011 at 6:43 pm said:
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IF YOU HAVE A MERS WHICH STANDS FOR MORTGAGE ELECTRONIC REGISTRATION SERVICES WHICH WOULD BE IN MOST CASES ON THE 1ST PAGE OF YOUR MORTGAGE PARAGRAPH C. CALL KIM THOMAS OR GEORGE BABCOCK AT 401-724-1904 AND GET RELIEF FROM YOUR PROBLEM!
neidermeyer, on February 14, 2011 at 5:34 pm said:
foreclosurefight
please e:mail me at brian_tracy AT cfl.rr.com
I’m about to go down the QT path with WF / AHMSI / Deutsche and I would like to know what you have learned ..
Thanks..
Ian, on February 14, 2011 at 3:34 pm said:
msoliman- tell us, if the notes “securing” the mortgage-backed pools have been charged to zero, and then sold to debt collectors, vulture funds, hedge funds or whatever: Correct me, but once these debts are charged off, have the banks not taken a deduction based on their declaration that these notes are worthless? And if these notes are then sold again, isn’t this in contravention of their “loss” and therefore IRS rules? What are they doing? And how are they accounting for it? They can’t collect the same debt more than once, and if they are charging them to zero, they are collecting insofar as the chargeoff is reducing their taxable income. Yes No Maybe?
MSoliman, on February 14, 2011 at 3:04 pm said:
The FDIC program for eliminating the overhang (lingering borrowers interest in title securing non recourse debt ) of troubled legacy loans –
includes mortgage backed securities charged from the books of participating banks — its happening through the use of private incentives to pre-qualified private buyers in the form of significant equity participations alongside an equal U.S. Treasury co-investment and fully guaranteed debt.
Challenge the PPIP structure envisions a market driven auction process designed to encourage both potential sellers and buyers, guided by independent valuation advice, to facilitate appropriate price determination for those legacy assets.
The FDIC intends to maintain rigorous oversight of the entire process so as to both encourage identification of legacy loans and securities to be sold by banks and the participation of pre-qualified bidders in the auction process.
THAT’S YOUR GOVERNEMENT PUTTING TAX PAYER DOLLARS TO WORK – TO BETTER SERVE THE AMERICAN NIGHTMARE – FORECLOSURE
m.soliman
expert.witness@live.com
MSoliman, on February 14, 2011 at 2:57 pm said:
After three payments the loan is deleted. MERS prohibits the securties registrant from talking to you .Three payments is where the SPECIAL SERVICER comes in.Deleted loans never happened. No can talk to you till then- survey says FAS 140-3 GAAP fraud for controllling interest in assets pledged as interest in common trust shares.
msoliman say’s read your Wileys GAAP and win !
m. soliman
expert.witness@live.com
Bob, on February 14, 2011 at 2:36 pm said:
Judge Finds MERS Has No Right To Transfer Mortgages, Finds Entire MERS Process Illegal
http://www.zerohedge.com/article/judge-finds-mers-has-no-right-transfer-mortgages
E. Tolle, on February 14, 2011 at 1:37 pm said:
Jan van Eck….what India said. I always look forward to your replies. Thanks for sharing your insights.
Ditto, on February 14, 2011 at 1:22 pm said:
pelucheven
Can you go to the sheriff sale and and document a “sale” to a pretender? We may be faced with the same issue soon.
Can someone outline the sheriff sale procedures and what we should look for and then do afterwards?
India, on February 14, 2011 at 1:18 pm said:
@Jan Van Eck: I’ve noted your responses on this site and each one is cogent, succinct and remarkably informed. Is there a way that any of us can contact you or some manner in which we can access more of your observations, assessments? Perhaps a blog?
Neil’s blog has been a major source of information and support. Your contributions have been significant and indicate a deep comprehension of the vagaries and deceit inherent in the current mortgage situation. I feel confident that there are others who read this blog who would greatly appreciate further advice and guidance from you.
pelucheven, on February 14, 2011 at 12:35 pm said:
dear jan,
that is precisely what they did in my case.
First Magnus presold the loan to a yet to be determined pool, according to the settlement documents the pool may have been with lehman bros. and Arora was suposed to be the servicer. first magnus went Bkd, and now four years after the loan was rescinded, dischrged in our bk 7, the Firzt magnus people come out with a blank endorsed note, a deed of trust with MERS, they never showed and or filed a claim in our Bk7, and the judge tells us the creditors are not reauired to file claims.
so they can come back after the fact, you have already gone through BK7, YOU CANNOT REFILE, AND THEY STEAL YOUR HOUSE. EVEN THOUGH THEY WERE PAID OFF BEFORE SETTLEMENT.
I JUST DO NOT GET IT.
THEY CAN BREAK ALL THE LAWS, FAIL TO FILE CLAIMS, DEFRAUD YOU, ROBBED YOU OF ALL YOUR SAVINGS AND RETIREMENT AND NOTHING HAPPENS TO THEM.
I AM SO DISAPOINTED AT THIS OUR FORMER GREAT COUNTRY.
I GUESS IT WAS OUR FAULT TO BUY INTO THE “AMERICAN DREAM”
phil a, on February 14, 2011 at 11:29 am said:
Jan van Eck , Could you let me know how could I or [ maybe not ], buy into the bond [ pool ] that i am supposedly assigned to. I have the name of the pool. This way I can prove that the insurance has paid off my / other loans. Niel ,I wouldlike your opinion as well. Maybe a story about peeling open the pool. Thanks in advance.
Deb wynn, on February 14, 2011 at 11:19 am said:
I talked to a dear pro se freind today… Ucc article 3 3202, 3204,a) andc) instruments of negotiation. If there is no record of negotiation and the psa acts as a defeasance to the mortgage/ deed of trust then the deed is void. Can we challenge the instrument itself which was never negotiated …. also see Nash case. Comments please
foreclosurefight, on February 14, 2011 at 11:11 am said:
I thought I have seen/heard it all…but I stand corrected.
I just had to sign for a “Certified Mail” package from AHMSI…
They are offering a “Modification” of our “Mortgage” for which Deutsche bought at Sheriff Sale in November 2009!!!!
WTF?!?!?
We are currently still living in our house and have not made a mortgage payment since September 2008!!!
We are currently in the middle of a Quiet Title Action with these bastards!!!
EULE, on February 14, 2011 at 11:11 am said:
May be a new lawsuit ? If I can proof , that I try to modified my mortgage for more than 2 years , and now , the server write me , he is not the lender ,he can not modified my mortgage ,than I think the server should pay for this time the interest.He know that already 2 years ago ??
Jan van Eck, on February 14, 2011 at 10:46 am said:
While everything Neil says (above) is perfectly true, that is STILL not the final word, and I think it also overlooks the “ultimate” reason why there are no mods or even discussion of mods until there is a substantial (multi-month) default. In my view, it overlooks the role that “credit-default swap” insurance would play. If the homeowner “defaults” on the paper payment stream, the “trustee” of the security goes after the CDS insurer, and says: “Hey, it is in default, pay us the full value of the principal!” And then these guys write the check (with taxpayer bailout money, to be sure).
Nobody is writing checks on non-defaulted loans. So they tell you to be in default for three or four months, and then unknown to you the entire loan is already paid by the CDS insurance.
Now the fun begins: with the “Note” paid off, the person who is still sitting on the “Note” goes and digs it out of some vault, sells it or indorses it n blank, and “someone” shows up at your courthouse to convince the judge that you are a bum and please give us this man’s house. Nobody tells the Judge that the Note is paid by insurance. Nobody tells the Judge that the Note does not even describe the Obligation. And nobody tells the Judge that the Note even if valid is not properly the property of the entity claiming ownership – those guys paid nothing for the Note, all they did was dig it out of a vault, have some robo-signer stamp it and get an “assignment” to someone else, and without any “consideration” (money changing hands) the fresh outfit goes and grabs your house.
So, in order to set the chain of theft in motion, you start it off by your “default” so that the insurance kicks in, and so forth. And now you know the “real” reason that these bums give you such lousy advice. Greed.
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