Securitization is a Ponzi Scheme. Homeowners are merely collateral damage.
Ponzi schemes work because of the continuing success of the tactical big lie — i.e., nobody would tell a lie that big because it would discovered and therefore it must be true.
The big lie became deadly on Wall Street when it moved a deformed securitization tactic into the lending marketplace, claiming that loan accounts were being created. In truth, they were being avoided and extinguished.
The obvious answer to most questions is simply that securities brokerage firms are in the business of selling securities, not making loans. None fo them wanted the profit center to be from paymetns on loans nor did they want the risk of loss associated with loans. So they did not accept those risks and they did not pass on those risks tpo investors. Instead they eliminated the risks.
The fact that they figured out a way to satisfy the supposed “loan” balance through the sale of securities and not report it to anyone is testament to their ability to sustain the lie that crashed the US economy in 2008 and now threatens to do so again.
The only loan balance that was ever created andd satsified is the loan that was made, usually by offshore sources, to securities brokerage firms (“investment banks”) who used that money to advance funds to the closing table with homeowners. When they sold the securities, the loan was paid off and satsified. No other loan balance existed.
Homeowners of course believed that they and received what they requested — a loan. But then they found out that there was no company anywhere that maintained an unpaid loan account on their books and records. There was only lawyers who claimed or implied that such an account existed.
And then homeowners learned that the courts were now saying that they MUST owe money to somebody — and why not the party designated by lawyers to be a Plaintiff or beneficiary under a deed of trust.
Those lawyers produced a “payment history” that was asserted to be a business record of a company that has been designated as a “servicer”.
But since no payment had ever been deposited intot eh account of such a designated “servicer” that apayment history did not reflect any business conducted by the alleged “servicer.” Hence the record was not a busienss record and should not have been accepted into evidence as an exception to the hearsay rule. It was a report on the report of third parties who remain undisclosed.
Today those third parties have been identified by the CFPB as FINTECH companies and have been reclassified as “servicers.” (Look it up).
Lawyers should take note: only a witness from the FINTECH companies is competent to testify to the existence of business records of the FINTECH company.
And such witnesses cannot testify as to the records or business practices of the companies designated as “servicers” because the FINTECH companies do not work for the designated “servicer.” Instead, they work for the securities brokerage firm that initiated the securitization scheme.
The “servicer”, like the “REMIC trustee” is a ruse. It is a big lie.
Steven Hoffenberg, Debt Baron Who Ran a Vast Fraud, Dies at 77
The current 25-year run of “securitization” and “derivatives” is based entirely on a foundation of prior Ponzi schemes. Some of those were running concurrently with the start-up of “securitization “ in 1983 — went the current shadow banking marketplace was ZERO instead of what is now reported as approximately $1..4 quadrillion.
The “vast frauds” created by people like Bernie Madoff and Steven Hoffenberg barely covered a single day’s work for most “investment banks.”
To put that in perspective, the shadow banking market is trading paper that is at least nominally worth around 16 times the total fiat currency in the world. This is important because it is the reason that the power of central bankers has been reduced in controlling currency and inflation.
It was toxic from the beginning. But the toxicity of these weapons of mass financial destruction became fatal when they moved to the lending marketplace. It continues to drain the economy, the federal reserve, and everything. To prop up the economy, we issued new currency in epic proportions. This is the current base of inflation.
Change in our perception is probable and not merely possible. These transactions are based on the thin air of imagination and not any fundamental values as we commonly accept.
Such schemes depend on continued sales of the “Shitty deals” reported in Goldman Sachs correspondence around the time the company was both issuing and betting against certificates falsely labeled as mortgage-backed securities. Any securities issuance plan that depends upon continued sales of new securities to pay off investors is, by definition, a Ponzi scheme.
The IOUs issued in the form of Certificates were a discretionary promise by securities brokerage firms to make payments to investors who were stupid enough to buy the certificates. Those payments could stop at any time. The prospectuses all had a provision for “servicer advances” that were not paid by any servicer.
And they were not an advance since the prospectus disclosed that the money was coming from the proceeds of sales of certificates. That is not an advance. That is a return of money.
They were not securities — something Wall Street firms had achieved with the exemptions created in 1998 and 1999. They were entirely free from regulation. [Registrations with SEC are merely filed to enable uploading documents to sec.gov and then downloading them with the Sec.gov name in the header to create the illusion that it is a government document].
They were not mortgage-backed since the certificates conveyed no interest to the payments, obligations, debts, notes, or mortgages of anyone.
Stop Foreclosure, Sue for Breach of Contract
Now is the perfect time to stand up for your legal rights and sue for beach of contract, mortgage fraud, and foreclosure fraud because the legal tide is beginning to turn, and homeowners are starting to win! In 2016 the California Supreme Court ruled in Yvanova v. New Century Mortgage Corporation (Case No. S218973, Cal. Sup. Ct. February 18, 2016) that homeowners have legal standing to challenge an assignment of the mortgage loan contract in an action for wrongful foreclosure on the grounds that the assignment(s) is/are void. Obviously if the court had ruled differently, the banks would have had carte blanche to forge mortgage assignments with wild abandon. In fact, without a system of endorsements and assignments it would be impossible to determine who has a legitimate interest in the property!
In THE PAPER CHASE: SECURITIZATION, FORECLOSURE, AND THE UNCERTAINTY OF MORTGAGE TITLE ADAM J. LEVITIN writes "the mortgage foreclosure crisis raises legal questions as important as its economic impact. Questions that were straightforward and uncontroversial a generation ago today threaten the stability of a $13 trillion mortgage market: Who has standing to foreclose? If a foreclosure was done improperly, what is the effect? And what is the proper legal method for transferring mortgages? These questions implicate the clarity of title for property nationwide and pose a too- big-to-fail problem for the courts.
The legal confusion stems from the existence of competing systems for establishing title to mortgages and transferring those rights. Historically, mortgage title was established and transferred through the “public demonstration” regimes of UCC Article 3 and land recordation systems. This arrangement worked satisfactorily when mortgages were rarely transferred. Mortgage finance, however, shifted to securitization, which involves repeated bulk transfers of mortgages.
Like many other cases, current trial court decisions are getting reversed because the courts are waking up to the reality of the rule of law. What they have been following is an off the books rule of “anything but a free house.” However a recent Yale Law Review Article eviscerates the assumptions of a free house for the homeowners and destroys the myth that somehow that policy has saved the nation. You can read the Yale Law Review article “In Defense of “Free Houses” for more information on this tide change.
To facilitate securitization, deal architects developed alternative “contracting” regimes for mortgage title: UCC Article 9 and MERS, a private mortgage registry. These new regimes reduced the cost of securitization by dispensing with demonstrative formalities, but at the expense of reduced clarity of title, which raised the costs of mortgage enforcement. This trade-off benefited the securitization industry at the expense of securitization investors because it became apparent only subsequently with the rise in mortgage foreclosures. The harm, however, has not been limited to securitization investors. Clouded mortgage title has significant negative externalities on the economy as a whole.
If your loan contains fraud or it was securitized then your lender may have breached your mortgage loan contract, and therefore your mortgage loan contract could be legally challenged in a court of law. If your mortgage loan contract is declared legally void, then any assignments of the mortgage loan contract, or subsequent assignments, could also be declared legally void.
Securitization is the process of taking an asset and transforming them into a security. A typical example of securitization is a mortgage-backed security (MBS), which is a type of asset-backed security that is secured by a collection of mortgages. Keep in mind that it is perfectly legal for banks to create mortgage-backed securities (MBS's); however there are significant legal ramifications that will either harm you, or benefit you, depending on what actions you take in response to the fact that your mortgage or deed of trust is legally void resulting in your property, in reality, being unsecured, just like a unsecured credit card debt. What's in your wallet?
This is why we recommend that you take immediate action and sue for the remedy the law entitles you to, and that you deserve. Treble damages and clear and free title to your home. Not sure if your loan contains mortgage fraud or if it was securitized, no problem, we will do a free mortgage fraud analysis and free Bloomberg securitization search for you.
Many of the programs that had modest success in the early days have fallen into disfavor as banks have enacted strategies to counter their progress. The banks are not going to go down without a serious fight. They have a large arsenal of tools to use, and the legal muscle to keep the industry off balance. This is not a static game. The reason that banks have been successful, for the most part, in protecting the large number of mortgages that were securitized is that there is an intricate web of legal theories that they hide behind to justify what they have done. In effect, they have created a shell game where the ball seems to move around in defiance of the laws of physics.
The banks are relying on a complex interaction between UCC 3 commercial paper law, UCC 9 securitization law, bailment law, agency law and local laws of the jurisdiction where the property is located. They would have us believe that what they have been doing since the 1970’s is perfectly legitimate. Many lawyers who have challenged the banks have gotten close to exposing the scheme only to find that judges retreat away from the complexity of the legal theories involved and fall back on procedural barriers under the auspices of protecting the equitable interests of the banks and their agents.
FRAUD STOPPERS Foreclosure Defense Program has moved the bar forward in many substantial ways:
- Our Private Administrative process is a targeted approach to Informal Discovery:
- 3-501. PRESENTMENT or States equivalent
- Mortgage Error Resolution/Request for Information: If you believe there is an error on your mortgage loan statement or you’d like to request information related to your mortgage loan servicing, you must exercise certain rights under Federal law related to resolving errors and requesting information about your mortgage loan. If you think your credit report, bill or your mortgage loan account contains an error, or if you need more information about your mortgage loan, you send a written letter concerning your error and/or request.
- Cutting edge mortgage fraud examination and court ready lawsuits and trial ready evidence to win your case
- Nationwide foreclosure defense attorneys and Pro Se litigation education and support products and services
Subsection of Presentment (example Covenant 8 of UCC3 Note) shows NOTE and under paragraph 1 states: “BORROWER’S PROMISE TO PAY: In return for a loan that I have received, I promise to pay….
MULTI STATE FIXED RATE NOTE--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT Form 3200 1/01 (page 1 of 3 pages) Covenant:
I and any other person who has obligations under this Note waive the rights of Presentment and Notice of Dishonor. “Presentment” means the right to require the Note Holder to demand payment of amounts due. “Notice of Dishonor” means the right to require the Note Holder to give notice to other persons that amounts due have not been paid.
- 15 U.S. Code § 1692g - Validation of debts
Often a debt collector cannot validate a debt and therefore cannot legally enforce collections.
- Truth In Lending Act (TILA RESCISSION) codified in 12 CFR Part 226 (Regulation Z); particularly§ 226.34 Prohibited acts and §226.32 sub-paragraph (ii) et seq. predatory lending practices
A mortgage loan covered by the Truth in Lending Act may be rescinded by mailing a Rescission Letter to the purported lender, forcing the purported lender/creditor to oppose that rescission with a lawsuit within 20 days or lose all opposition rights.
- The primary focus of the legal aspect of our program revolves around taking the theories and best practices that have been most successful around the country and make refinements.
“Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.
- Our program seeks to avoid getting mired in the complexity of the various areas of law involved, instead focusing on a simple, focused approach that makes it harder for judges to avoid the strength of our core arguments.
- The PMA trustees and executive team have a diverse set of skills and significant experience in the core areas that will improve the success factors for our operations.
We have spent an exhaustive amount of time analyzing all of the cases that have been successful in resolving mortgage securitization problems. We have designed our legal information litigation strategy to hit the banks hard and fast where they are most vulnerable.
Our primary focus is on getting clear and marketable title to the property by arguing that the actions of the banks have made the security provisions of the mortgage/deed of trust unenforceable.
Instead of fighting the foreclosure itself head-on, we argue that none of the banks or their agents has the right to enforce the foreclosure provisions of the Mortgage/Deed of Trust. In effect, if none of the banks have standing to enforce the foreclosure provision, we are entitled AS A MATTER OF LAW to a declaratory judgment of Breach of Contract (Security Agreement) that is res judicata, i.e., a permanent ban on foreclosure.
The Stand & Fight Program is a complete program that provides you with everything you need:
- Administrated Process
- Court Ready Chain of Title Investigation and Signed Affidavit
- Complaint along with all exhibits
- Legal Research
- Legal Briefs
- Case Management for Local Civil Rules of Procedures
- Training and Support