Exposing Mortgage Fraud: FRAUD STOPPERS PMA Leading the Charge with Level 4 (Military Grade) Bloomberg Securitization Audits, Expert Witness Testimony, and Professional Litigation Packages

Mortgage fraud continues to be a pressing issue in the real estate industry, affecting countless homeowners and investors. Amidst this troubling scenario, organizations like FRAUD STOPPERS PMA are at the forefront of exposing and combating mortgage fraud. With their commitment to justice and diligent efforts, FRAUD STOPPERS PMA has become a leading force in identifying and addressing fraudulent practices. Alongside their investigative mortgage audits, FRAUD STOPPERS PMA offers a powerful tool called the Bloomberg Securitization Audit, which enhances their ability to uncover mortgage fraud and strengthen legal remedies.

Understanding the Menace of Mortgage Fraud:

Mortgage fraud is a deceptive practice that encompasses various illegal activities committed during the mortgage lending process. These fraudulent activities can occur at different stages, including loan origination, loan modification, and foreclosure rescue schemes. The consequences of mortgage fraud are devastating, leading to financial losses, ruined credit, and even the loss of homes.

FRAUD STOPPERS PMA: The Guardian against Mortgage Fraud:

Amidst the rampant mortgage fraud cases, FRAUD STOPPERS PMA has emerged as a prominent organization dedicated to protecting homeowners and investors from fraudulent practices. With a team of experienced legal professionals, they specialize in exposing fraud and providing solutions to affected individuals.

Investigative Mortgage Audits:

One of the key services offered by FRAUD STOPPERS PMA is investigative mortgage audits. These audits are thorough examinations of mortgage loan documents, aiming to uncover any potential fraud or violations committed by lenders or servicers. By analyzing the loan documents, FRAUD STOPPERS PMA aims to reveal irregularities, predatory lending practices, and violations of state and federal laws.

Bloomberg Securitization Audit: Unveiling the Truth:

To bolster their arsenal against mortgage fraud, FRAUD STOPPERS PMA offers the Bloomberg Securitization Audit as a powerful tool for identifying fraudulent activities related to securitization. This comprehensive audit leverages Bloomberg's extensive database to trace the intricate ownership and transfer of mortgage loans, revealing any potential irregularities in the securitization process.

By analyzing the securitization history of a mortgage loan, the Bloomberg Securitization Audit assists FRAUD STOPPERS PMA in determining if proper legal procedures were followed, if the loan was securitized correctly, and if the loan's chain of ownership is accurately documented. This critical information can expose fraudulent practices such as robo-signing, improper transfers, and violations of securitization trust agreements.

Legal Remedies and Strategies:

Upon identifying mortgage fraud through investigative audits and the Bloomberg Securitization Audit, FRAUD STOPPERS PMA offers a range of legal remedies and strategies to affected homeowners and investors. These include loan rescission, loan modification, and potentially pursuing legal action against the responsible parties. FRAUD STOPPERS PMA provides expert guidance, assisting Members in navigating the complex legal landscape and seeking appropriate redress.

Education and Empowerment:

In addition to their legal services, FRAUD STOPPERS PMA places great emphasis on education and empowerment. They aim to equip homeowners and investors with the knowledge and tools necessary to identify and prevent mortgage fraud. Through informative resources, webinars, and workshops, FRAUD STOPPERS PMA educates individuals about the signs of fraud, their rights, and proactive measures to safeguard their interests.

Collaboration with Legal Professionals:

FRAUD STOPPERS PMA recognizes the importance of collaboration with legal professionals to effectively combat mortgage fraud. They work closely with attorneys, paralegals, and experts in the field to build strong cases against fraudulent lenders and servicers. This collaborative approach ensures that affected individuals have access to the best legal representation and support throughout their fight against mortgage fraud.

The Success of FRAUD STOPPERS PMA:

The success of FRAUD STOPPERS PMA can be attributed to their unwavering commitment to justice, their dedication to empowering homeowners and investors, and their utilization of advanced tools such as the Bloomberg Securitization Audit.

Their track record of exposing mortgage fraud and securing favorable outcomes for their members has earned them a reputation as a trustworthy advocate in the industry. Through their efforts, numerous individuals have been able to reclaim their financial stability and protect their assets.

The Power of the FRAUD STOPPERS PMA Bloomberg Securitization Audit:

The Bloomberg Securitization Audit offered by FRAUD STOPPERS PMA is an invaluable asset in the fight against mortgage fraud. This specialized audit goes beyond traditional document analysis and delves into the intricate web of securitization. By leveraging the vast database of Bloomberg, a renowned financial information platform, the audit provides comprehensive insights into the securitization history of a mortgage loan.

Through the Bloomberg Securitization Audit, FRAUD STOPPERS PMA can uncover critical information, such as whether a loan was properly securitized, whether it adhered to legal requirements, and whether the chain of ownership was accurately documented. This level of scrutiny helps expose fraudulent practices that may have taken place during the securitization process, including fraudulent assignments, fraudulent endorsements, and violations of securitization trust agreements.

The Bloomberg Securitization Audit not only strengthens FRAUD STOPPERS PMA's ability to identify mortgage fraud but also enhances their legal strategies and remedies. Armed with comprehensive and verified information, FRAUD STOPPERS PMA can build strong cases against fraudulent lenders and servicers, supporting their members in pursuing legal action and seeking the justice they deserve.

Mortgage fraud remains a significant threat to homeowners and investors, but organizations like FRAUD STOPPERS PMA are leading the charge in exposing and combating this pervasive issue. Through their investigative mortgage audits and the powerful Bloomberg Securitization Audit, FRAUD STOPPERS PMA provides a comprehensive approach to identifying mortgage fraud, strengthening legal remedies, and empowering individuals with knowledge.

With their commitment to justice, collaboration with legal professionals, and dedication to education, FRAUD STOPPERS PMA stands as a beacon of hope for those affected by mortgage fraud.

By utilizing advanced tools like the Bloomberg Securitization Audit, FRAUD STOPPERS PMA continues to make significant strides in their mission to protect homeowners and investors, ensuring that they can regain financial stability and safeguard their assets from the clutches of fraudulent practices.

FRAUD STOPPERS Evaluation for Violations of “RESPA” The Real Estate Settlement Procedures Act (RESPA) is a consumer protection statute, first passed in 1974. It requires lenders to give a good faith estimate (GFE) of all closing costs that borrowers must pay. It was designed to help borrowers from being forced to pay “hidden fees” at closing. Typical violations of RESPA include

1. Statutory Damages,
2. Attorney’s fees, and in many cases
3. Treble Damages [i.e., 3 times the amount.]

FRAUD STOPPERS Evaluation for Violations of “TILA” The Truth in Lending Act (TILA) requires lenders to disclose the terms of a loan, including the total amount of the loan, the annual interest rate, and the number, amount, and due dates of all payments necessary to repay the loan.

The TILA also requires additional disclosures and places many restrictions on mortgages. The most often sought remedy under TILA is rescission of the loan.

FRAUD STOPPERS Evaluation for Violations of “FCRA” The Fair Credit Reporting Act (FCRA) was designed to prevent inaccurate or obsolete information from entering or remaining on a credit report. The law requires credit bureaus to adopt reasonable procedures for gathering, maintaining, and disseminating information. Commons remedies for violating FCRA are:

1. Statutory damages and
2. Attorney fees

FRAUD STOPPERS Evaluation for Violations of “ECOA” The Equal Credit Opportunity Act (ECOA) was designed to ensure that all qualified people have access to credit and prohibits discrimination based on sex, marital status, age, race, national origin, or public assistance benefits received.

FRAUD STOPPERS Evaluation for Violations of “HOEPA” Home Ownership Equity Protection Act state and local high costs. Federal (HOEPA), state and local high-cost thresholds.

FRAUD STOPPERS compares the loan data collected during a forensic loan audit to the calculated high-cost thresholds as defined by the Home Ownership and Equity Protection Act (HOEPA) and applicable state and local jurisdictions.

FRAUD STOPPERS Evaluation for Violations of “Underwriting Standards” The purpose of an underwriter is to determine whether the borrowers can qualify for a loan and if the borrowers can repay the loan. This determination of the ability to repay a loan is based upon employment and income in large measure, which is proved by getting pay stubs, 1040’s, W-2’s and a Verification of Employment and Income on the borrowers.

If an underwriter has evaluated the loan properly, then there should be no question of the ability of the borrower to repay the loan. Debt ratios will have been evaluated, credit reviewed, and a proper determination of risk made in relation to the loan amount.

Approvals and denials would be made based upon a realistic likelihood of repayment. The terms “abusive lending” or “predatory lending” are most frequently defined by reference to a variety of lending practices. Although it is generally necessary to consider the totality of the circumstances to assess whether a loan is predatory, a fundamental characteristic of predatory lending is the aggressive marketing of credit to prospective borrowers who simply cannot afford the credit on the terms being offered.

While such disregard of basic principles of loan underwriting lies at the heart of predatory lending, a variety of other practices may also accompany the marketing of such credit.

Targeting inappropriate or excessively expensive credit products to older borrowers, or to persons who are not financially sophisticated or who may be otherwise vulnerable to abusive practices, and to persons who could qualify for mainstream credit products and terms Loan Flipping & Equity Stripping Repeated refinancing of borrowers into loans that have no tangible benefit to the borrower. Can be the same lender or different ones.

Loans and refinances whereby equity is removed from the home through repeated refinances, consolidation of short-term debt into long term debt, negative amortization, or interest only loans whereby payments are not reducing principle, high fees and interest rates. Eventually, borrower cannot refinance due to lack of equity.

High Debt Ratios This is the practice of approving loans with high debt ratios, usually50% or more, without determining the true ability of the borrower to repay the loan. Can often be seen with Prime borrowers approved through the Automated Underwriting Systems. High Loan to Value loans Loans offered to a borrower having little or no equity in the home.

Usually, adjustable-rate mortgages that the borrower will not be able to refinance out of when the rate adjusts due to lack of equity. Fraudulently Caused to Execute Loan Documents Adjustable-rate mortgage loan was an inter-temporal transaction on which Plaintiffs had only qualified at the initial teaser fixed rate and could not qualify for the loan once the interest rate terms change.

Deception, Fraud, Unconscionable Is marketed in a way that fails to fully disclose all material terms. Includes any terms or provisions which are unfair, fraudulent, or unconscionable. Is marketed in whole or in part based on fraud, exaggeration, misrepresentation, or the concealment of a material fact. Includes interest only loans, adjustable-rate loans, negative amortization and HOEPA loans. Stated or No Income/No Assets Is based on a loan application that is inappropriate for the borrower.

For instance, the use of a stated-income loan application from an employed individual who has or can obtain pay stubs, W-2 forms and tax returns. Lack of Due Diligence in Underwriting Is underwritten without due diligence by the party originating the loan. No realistic means test for determining the ability to repay the loan. Lack of documentation of income or assets, job verification.

Usually with Stated Income or No documentation loans but can apply to full documentation loans. Inappropriate Loan Programs Is materially more expensive in terms of fees, charges and/or interest rates than alternative financing for which the borrower qualifies. Can include prime borrowers who are placed into subprime loans, negative or interest only loans. Loan terms whereby the borrower can never realistically repay the loan.

All claims and defenses the borrower may have against the mortgage lender, mortgage broker, or other party involved in the loan transaction. FRAUD STOPPERS Evaluates Each File for Violations of “Common Law Principles” CONSTRUCTIVE FRAUD Material facts include the terms of the loan, whether there is a prepayment penalty, or any other information which a reasonable borrower would want to know before accepting the loan.

Did the broker or loan officer or anyone working for the broker or loan officer fail to disclose any material facts to the borrower?

FRAUD AND NEGLIGENT MISREPRESENTATION Were any representations, statements, or comments, written or made by the loan officer, broker, notary or anyone else who contradicted the terms of the documents?

NEGLIGENT MISREPRESENTATION When a mortgage professional makes errors which a reasonably diligent mortgage professional would not have made, he or she may have made a negligent misrepresentation.

BREACH OF CONTRACT The note and its attachments are a contract. The broker must follow all the terms of the contract such as the way the interest is calculated, and the penalties it assesses. Were there any terms in the contract which the lender failed to follow? BREACH OF FIDUCIARY DUTY And many, many, more…….

Bloomberg Securitization Audit

Bloomberg Securitization Complete Report Includes:

• • • Securitization Details & Participants
    • Transactions Details & Participants
    • Copy of the Prospectus
    • Copy of Pooling and Servicing Agreement
    • Bloomberg Screenshots of the Trust, as well as other Actively Training Information Including:
      • Description of the Security from Bloomberg
      • Deal Description
      • Structured Finance Notes Screen
      • Section Pertaining to Trust Credit Enhancements
      • Loan Level Detail Section including REMICS, CUSPS, Credit Default Swap, Libor Index, Classes of Paid and Unpaid
      • MERS Analysis
      • Report Summary
      • Expert Witness Affidavit
    • Full Chain of Title Analysis
    • Full Robo-Signer Analysis
    • Full Assignment/Conveyance Analysis and Analysis of Endorsements
    • Entity Verification Analysis
    • Complete Report Summary
    • Expert Witness Affidavit (signed & notarized by a subject matter expert)

You can learn more about FRAUD STOPPERS Bloomberg Securitization Audit by watching this video https://www.youtube.com/watch?v=F_qEOLeHyEU

Sample Bloomberg Securitization Audit

Mortgage Loan Instrument or Personal Property; what really got securitized?

 

We begin with the mortgage loan originator. Immediately after closing, the mortgage loan originator has taken possession of many documents of which only two (2) are required to be followed through to the securitization process. These two (2) documents are the Paper Tangible Promissory Note and the Paper Tangible Security Instrument (Mortgage, Deed of Trust, or Security Deed). The Promissory Note and the Mortgage (or Deed of Trust or Security Deed) together can be considered one tangible instrument. With a perfected Tangible lien of record securing a Tangible Promissory Note, this would then be in compliance to all applicable laws. As such, intangible and tangible laws apply granting the mortgage loan originator legal and equitable rights to the Note (tangible and intangible) as Holder in Due Course that would have legal and equitable rights to the security securing if the Note and security (tangible and intangible) are in compliance to all applicable law.

 

Assuming originating lender has complied with all applicable laws in origination of the mortgage loan; the originating lender could and routinely does offer up the mortgage loan to securitization by selling the payment stream interest to an Account Debtor (Sponsor/Seller) who then in accordance to an intangible contract swaps the intangible payment stream for certificates which are sold to investors. Such swap in legal parlance is considered to be a “True Sale”.

 

The “unknown fact” is that the monetary value contained within the Tangible Obligation, and the Security Instrument securing it, were offered for sale in the secondary market as an UCC Article 8 note (eNote/Transferable Record usually tracked on a national database [book entry system]), the book entry system tracks who is the UCC8 Intangible Obligee with rights to the UCC 9 security interest. Although, the electronic book entry system does not track who has a vested legal interest in the tangible security instrument that is reserved by statutory law governed by local laws of jurisdiction.

 

The instrument is an Intangible Obligation. Thus, a second (non- UCC Article 3) instrument was created. The existence of the (non- UCC Article 3) Intangible instrument is dependent upon the existence of the UCC Article 3 Tangible instrument. To provide a security interest to allow for an alternate method to collect value for the (UCC Article 8) Intangible instrument, the maker of the (UCC Article 8) Intangible instrument pledged as collateral the “Electronic Mortgage Loan Package”, evidenced by the UCC Article 3 Tangible instrument and its underlying security interest (instrument).

 

What should have happened:

 

For the UCC Article 8 Intangible Obligee (Trust) to have a perfected and continuous alternate method to collect via alternate tangible such as a true sale of real property (Alternate method of value for the Tangible Payment Stream); the UCC Article 8 transferable record Intangible Obligee (Trust) would need to have been assigned rights to the Tangible Security Instrument in accordance to laws of local jurisdiction securing the UCC Article 3 obligation in order to be in compliance with state and federal law.

 

A Tangible Paper Promissory note denotes two distinguishing values, one of legal rights contained within which is routinely stripped out as an intangible obligation thus leaving the second value to be only the value of paper and ink being that of tangible property without legal rights but limited to that of being of personal property of the party that stripped the rights value (legal and monetary).

 

Thus, a Tangible Obligee may or may not be a holder in due course of a secured UCC 3 Instrument, whereas when distinct and separate laws applying to the tangible security instrument have not been followed, even if Tangible Obligee was entitled to enforce the UCC 3 Instrument does not mean that the Tangible Obligee is a party entitled to enforce security instrument [party to enforce the tangible note and the tangible security instrument].

 

When an Intangible claim (Payment Stream) or lien created by an Intangible security agreement extends to the Tangible Note and the Tangible Security Instrument, such actions must be in compliance with all applicable law. Signatures on Intangible Security Interest, Tangible Note and the Tangible Security Interest (Security Instrument) are not governed by Uniform Commercial Code Article 9 or State equivalent. The collection rights are governed under UCC 9 but the transfer of an intangible is governed under UCC 8; therefore negotiation of the Article 8 Instrument cannot be negotiated with an electronic signature attempting to effect transfer and thus the Security Interest falling under UCC 9 is also not transferred.

 

Legal guidance for signatures under ESIGN Act – 15 USC §7003 – clearly excludes instruments governed by the Uniform Commercial Code Article 3, 8, & 9 or the State equivalent so the Intangible Claim cannot be negotiated electronically. The Tangible Personal Property Security Interest (Tangible Note and continuously assigned perfection of the Tangible Security securing the Tangible Note) can only be pledged as an intangible interest in the payment stream as a UCC8 instrument. As such the Intangible Payment Obligation can only be negotiated in paper form. The Intangible Security Interest cannot be sold as an electronic transferable record.

 

What Did Happen: Outside Applicable Law

 

To provide a security interest to allow for an alternate method to collect value (Payment Stream) for the (UCC Article 8) Intangible instrument, the maker of the (UCC Article 8) Intangible instrument pledged as collateral the “Electronic Mortgage Loan Package”, evidenced by the UCC Article 3 Tangible instrument and its underlying security interest (instrument). This “Electronic Mortgage Loan Package” is simply an intangible interest in personal property (Intangible Payment Obligation). As future legal actions were unanticipated, the paper documents were either placed in storage (Custodial and Non-Custodial Custody) or deliberately destroyed.

 

It’s important to understand Standard Operating Procedure in regards to the conveyance of a securitized mortgage loan; specifically the conversion of a Tangible Mortgage Loan Instrument into an Intangible, electronic “eNote” Form, which is typical in this new world of Electronic Securitization. Illusion of legality is the key to this scheme.

 

Upon the loan closing, the paper Promissory Note and the Security Instrument are scanned into an electronic digitized graphics package. The data from both sets of documents is converted to an electronic data file and paired with the electronic version of the Promissory Note and Security Instrument, along with all other closing documents which is called a “Mortgage Loan Package”. Where this “Electronic Mortgage Loan Package” is routinely addressed as the “Mortgage Loan Package”, it is nothing more than an interest in the [monetary] Intangible Payment Obligation, whose source of funding is captured by the payments made regarding the Tangible Promissory Note Obligation. The “Electronic Digitized Mortgage Loan Package” is now falsely represented as the legal “Mortgage Loan Package”.

 

 

The electronic version of the Warranty Deed may have been electronically submitted to be filed in Public Records by a third-party submitter as approved by the state; as the Warranty Deed contains the information that transfers the title (legal and equitable) of the property from the Seller to the Buyer (Homeowner). Title to the property is required to offer the property as security in the Security Instrument as collateral for the paper Promissory Note. The Warranty Deed is required to be filed in Public Records. The Warranty Deed is not governed under the Uniform Commercial Code or State equivalent and would be allowable under ESIGN Act to be filed in electronic form.

 

The electronic version of the Security Instrument is then electronically filed in Public Records. If the Obligee attempts to apply UCC Article 9 laws of perfection to support legal claims within the Security Instrument, then this filing would be unlawful. If the Obligee uses the laws of local jurisdiction to support perfection, then the filing would be lawful.

 

Conveyance of an “eNote”:

 

If Mortgage Electronic Registration Systems (hereinafter “MERS”) is involved, registration on the

MERS system is required, and when this registration occurs, an 18-digit Mortgage Identification

 

Number “MIN” is created. The first seven (7) digits identify the registering lender and the last digit is a checksum number. If the “Electronic Mortgage Loan Package” is registered in the MERS Registry, there is no physical transfer of the “Electronic Mortgage Loan Package”. The MERS Registry is updated as to who has control and ownership rights of the electronic digitized file identified as a non-lawful and intangible form of the electronic Promissory Note “eNote”.

 

The First Electronic Sale / Assignment (Investment Vehicle as Example, Fannie/Freddie Similar) occurs when The “Loan Originator” (Assignor, Tangible Obligee) offers the “Electronic Mortgage Loan Package” to a perspective buyer (Intangible Obligor) to offset a prearranged line-of-credit by intangible obligee (Lender). In this scenario, Recipient (Assignee, Seller/Securitizer) of the Investment Vehicle,

 

Intangible Obligee) of the “Electronic Mortgage Loan Package” has already conditionally agreed to accept the (conveyance) as a tender of funds has already occurred leaving only taking control of the

 

“Electronic Mortgage Loan Package” as a transferable record, unbeknownst that it is a transaction not supported by law.

 

There are counties that identify on the face of the instrument that the instrument was submitted for recording in electronic form from the submitter, where the submitter has received from an intangible obligee an instrument that is to be recorded. If a “Notice of Assignment” reflecting this “electronic negotiation” is NOT filed in Public Records, as such a filing would be unlawful. There is no law that requires notice to be filed of Public Records upon the selling or purchasing of an electronic Promissory Note “eNote”. As such, an “eNote” would only apply to personal property (Article 8 Intangible payment obligation) and not real property (Article 3 negotiable instruments), in order to be in compliance with UCC Article 9, ESIGN Act and UETA.

 

The First Transfer of Personal Property (Payment Intangible) differs from the first Electronic Sale as the Intangible Obligation (Payment Stream, rights to future payments, or beneficial interest) has been bifurcated from the Tangible Obligation (Paper Promissory Note), and in accordance to UCC Article 3-3203(d), rights to enforce the Tangible Obligation have not been negotiated to the Intangible Obligor (Seller/Securitizer), the only rights conveyed are rights to simply hold and possess the Tangible Paper Obligation.

 

The Second Electronic Sale / Assignment happens when the “Seller/Securitizer of the Investment Vehicle,” (Assignor/Intangible Obligor), sells/assigns the “Electronic Mortgage Loan Package” to the

 

Buyer (Depositor of the Investment Vehicle / Subsequent Intangible Obligor). The recipient (Assignee,

 

Depositor of the Investment Vehicle / Subsequent Intangible Obligor) of the “Electronic Mortgage Loan Package” under the terms of the trust accepts the transfer and takes control of the “Electronic Mortgage Loan Package”.

 

The Third Electronic Sale / an Assignment happens when the “Depositor of the Investment Vehicle”

 

(Assignor) sells/assigns the electronic loan package to the Trustee of the Investment Vehicle. The recipient (Assignee, Depositor of the Investment Vehicle) then takes control of the “Electronic Mortgage Loan Package”. The “Depositor of the Investment Vehicle”, in compliance with the Investment Trust’s documents, takes control of the Investment Trust’s Electronic Certificates in exchange for selling/assigning the “Electronic Mortgage Loan Package”.

 

It is not uncommon to find in Public Records a “Notice of Assignment” filed reflecting a transfer of lien rights from the Original Assignor (Tangible Obligee) to a 3rd subsequent Intangible Assignee (Subsequent Intangible Obligor) of the Intangible Obligation, usually the Trustee or Mortgage Servicer). In this scenario the perfection of lien rights (Perfected Chain of Title) does not match the match the

 

“Chain of Negotiation” of the Paper Promissory Note shown by indorsements, and, as such, proves the Paper Promissory Note is no longer secured by the Security Instrument as the Security Instrument has become a “Nullity” by operation of law. These filings in public records are fraud upon public records.

 

As an illusion, to allegedly provide a security interest to allow for an alternate method to collect value for the (UCC Article 8) Intangible instrument, the maker of the (UCC Article 8) Intangible instrument pledged as collateral the “Electronic Mortgage Loan Package”, evidenced by a digitized copy of an UCC

 

Article 3 Tangible instrument and its underlying security interest (instrument), not perfected of record in the intangible purchaser's name. To further the account debtor's deception, claims are made that Account Debtor was executing a true sale of the tangible note and it's security to the purchaser of the intangible obligation, this is a legal impossibility Intangible purchaser never obtained legal rights to alternate tangible method of payment.

 

Security Interest to an alleged Account Debtor (rights to collect Future Payments pledged by the Account Debtor), which was to have been secured by the Payment Stream from the Tangible Obligation; where an alternate method to receive value was done via a properly attached and perfected real property security interest, could not have taken place legally under the current governing laws without having been in written tangible paper form. Real property Security Interests are governed by local laws of jurisdiction. UCC Article 9 governance for attachment and perfection of security rights to the intangible obligation is limited to personal property security interests such as goods and services.

 

A Tangible Obligor or Account Debtor may or may not be a holder in due course of an UCC 3 Instrument, where distinct and separate laws apply to the tangible security instrument have not been followed, even if Tangible Obligor/Account Debtor was entitled to enforce the UCC 3 Instrument does not mean that the Tangible Obligor is a party entitled to enforce security instrument (party to enforce the tangible note and the tangible security instrument). The trust has been conveyed a transferable record, leaving a Tangible paper UCC Article 3 Note LESS the rights securing it, as would have existed if the Security Instrument securing the UCC Article 3 Tangible Note had been assigned in accordance to laws of local jurisdiction!

 

Furthermore, by NOT assigning the Security Instrument securing the UCC Article 3 Tangible Note in accordance to local laws of jurisdiction, the UCC 8 Intangible Obligee has taken possession of an “Electronic Mortgage Loan Package” lacking legal rights to the tangible security instrument. Pursuant to local laws of jurisdiction, without the UCC Article 8 transferable record and the Intangible Obligee perfecting of record, (the tangible rights that are found in the Tangible Security Instrument include the power of sale) the UCC 8 transferable record Intangible Obligee is NOT a Perfected Tangible Obligee.

 

It is important to understand that UCC Article 9 does not distinguish a difference between negotiable UCC Article 3 (Tangible Negotiable Instruments) and non-negotiable (Intangible non-Article 3 instrument such as an eNote or Transferable Record), as transferable record instruments are governed by UCC Article 8; which is also exclusion of ESIGN Act and UETA. UCC Article 9 governance is limited to personal property security interests, such as goods and services. Personal property Security Interests are governed by UCC Article 9. Within the current process of securitizing real property mortgage instruments, it is not uncommon to notice an improper use of applying UCC Article 9 laws to real property security interests in Note transactions where such UCC 8 Transferable record Intangible Promissory Note transactions are in fact non-negotiable transactions.

 

This system of securitization has a serious legal flaw as it provides that the Account Debtor (Intangible Obligor) and the Debtor (Tangible Obligor) have to be one in the same which is a logistical and legal impossibility. As the Intangible Obligee is not perfected of record to the Tangible Mortgage (Tangible Security securing the Tangible Article 3 Note) and not having the Tangible Article 3 instrument negotiated from Tangible Obligee to Intangible Obligee as provided under UCC 3, the Intangible Obligee has no real property securing an Obligation created by the Account Debtor. Whereas UCC 3 allows proving up an Article 3 Tangible Instrument, such law does not extend to the Tangible Security that once secured the Tangible Article 3 Note made payable to the Originating Tangible Obligee.

 

NON-Holder-in-Due-Course Alleges Default: (Trustee/Mortgage Servicer)

 

• The Mortgage Servicer or the Trustee of the INTANGIBLE Investment Vehicle declares default.

• Numerous actions of fraud are readily identifiable.

• As noted in the four (4) electronic negotiations of the electronic loan package to securitization, there is a lack of supporting law to allow electronic negotiation. Only the Holder of the “Paper Promissory Note” entitled in the indebtedness has a right to collect payments.

• Lost Note Affidavits based on Electronic Records are Hearsay

• Introduction of fraud into the Securities Market

• Fraudulent creation of assignments in attempt to transfer lien rights from Originator to 3^rd or 4^th subsequent purchaser bypassing 1^st and 2^nd purchasers resulting in fraudulent filing in public records.

• Reader note: Specific details of client’s unique transaction history found in the Chain of Title Analysis and Mortgage Fraud Investigation will determine if a violation has occurred.