every single one of the large financial institutions deserves to be closed and dissolved, their officers imprisoned and every single one of the regulators involved, including The Fed, SEC, OTS and OCC should be thrown in the gulag, fed stale bread and water and then eaten by wild hogs?
Read that a few times -- however many times you need to.
Out of the entire sample in this so-called REMIC not one of the surveyed loans actually was timely deposited into the trust and of them about half were NEVER deposited at all.
Under the law the Trust is thus void.
It does not exist because as a REMIC all the assets had to be in the trust by the grace period (not two years later) or it cannot be organized as a pass-through tax entity and the rest of the so-called "assets" were never deposited at all. Without one legitimate asset as discovered in this audit the trust is an empty box -- it has no corpus!
But this empty shell has behaved as an actual trust. It has directed a servicer to process payments. It has foreclosed on people who didn't make payments. It has distributed funds to certificate holders who in fact paid good money for nothing whatsoever as there's nothing in there.
EVERY SINGLE PERSON WHO PAID TO SAID SERVICER WAS SCREWED AS THEY DID NOT PAY THE ACTUAL OWNER OF THE DEBT IN QUESTION, EVERY SINGLE INVESTOR WHO BOUGHT SAID "CERTIFICATES" AND GAVE GOOD FUNDS FOR NOTHING WAS ROBBED AND EVERY SINGLE ACT DIRECTED BY THE HAND OF THIS NON-CONSTITUTED ENTITY THAT CLAIMS TO EXIST BUT HAS NO CORPUS AS IT HAS NOTHING LEGALLY DEPOSITED AND PRESENT IN IT DID NOT THEN AND DOES NOT NOW HAVE LAWFUL BASIS.
This is not a box of chocolates that was in fact dog turds, it is an empty box containing nothing.
This is not an accident. This is not a "few" loans that didn't get where they were supposed to on time due to technicalities or processing errors. This is an empty vessel that was represented up and down the line from inception onward as a fully-functional and legally-constituted investment vehicle that exercised powers it did not have because it in fact possessed nothing.
Not only did the principals involved in this not do anything about this the regulatory apparatus -- from The Fed to the OCC to the OTS to the SEC to Tim Geithner and President Obama didn't do anything about it either, not then and not now.
WHY should you, I or anyone else have any obligation to any so-called "law" when this sort of abject and outrageous abuse goes on for years and it takes a lawsuit to perform any sort of diligence upon the corpus of this so-called trust - and when that is done what is found is an empty ****ing box!
WHERE ARE THE DAMNED HANDCUFFS AND WHY ARE YOU PUTTING UP WITH THIS CRAP AMERICA?
And by the way, I asserted exactly this had happend more than five years ago. Now we have proof.
When this entire Foreclosurefraud nonsense got going, and I started digging through documents from various parties, one of the striking findings I kept coming up with was that mortgages had not been timely transferred into the trusts that form the MBS in question.
REMIC law is extremely clear and has no exceptions or exclusions -- you either get the actual documents into the trust on time or you can't do it at all. The reason is that these are pass-through instruments for tax purposes and widespread, indeed trivial fraud would be easy to commit if no such requirement was adhered to (you could substitute only "good" loans later on, you could stuff the trust with "bad" loans posthumeously to generate fake losses, etc.)
I had argued that given the apparent widespread failure to transfer mortgages into these trusts an attempt to later sue for foreclosure in the name of the trust (by the Servicer as a nominee or agent of the Trust, etc) was presumptively invalid because the alleged "owner" of the mortgage in fact was not the owner because they never took their ownership interest in a timely fashion and the law bars them from doing so at a later date.
In this appeal, the borrower contends the trial court erred by sustaining defendants' demurrer as to all of his causes of action attacking the nonjudicial foreclosure. We conclude that, although the borrower's allegations are somewhat confusing and may contain contradictions, he nonetheless has stated a wrongful foreclosure claim under the lenient standards applied to demurrers. We conclude that a borrower may challenge the securitized trust's chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under New York law) occurred after the trust's closing date.Transfers that violate the terms of the trust instrument are void under New York trust law, and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement.
We therefore reverse the judgment of dismissal and remand for further proceedings.
And why did they take this position? Right here, which is exactly the reason that I argued originally that this was a potentially fatal defect in these trusts:
Despite the foregoing cases, we will join those courts that have read the New York statute literally. We recognize that a literal reading and application of the statute may not always be appropriate because, in some contexts, a literal reading might defeat the statutory purpose by harming, rather than protecting, the beneficiaries of the trust. In this case, however, we believe applying the statute to void the attempted transfer is justified because it protects the beneficiaries of the WaMu Securitized Trust from the potential adverse tax consequence of the trust losing its status as a REMIC trust under the Internal Revenue Code. Because the literal interpretation furthers the statutory purpose, we join the position stated by a New York court approximately two months ago: “Under New York Trust Law, every sale, conveyance or other act of the trustee in contravention of the trust is void. EPTL § 7–2.4. Therefore, the acceptance of the note and mortgage by the trustee after the date the trust closed, would be void.” (Wells Fargo Bank, N.A. v. Erobobo (Apr. 29, 2013) 39 Misc.3d 1220(A), 2013 WL 1831799, slip opn. p. 8; see Levitin & Twomey, Mortgage Servicing, supra, 28 Yale J. on Reg. at p. 14, fn. 35 [under New York law, any transfer to the trust in contravention of the trust documents is void].)
Ratification by fiat of an untimely transfer into the trust forcibly voids the REMIC's tax pass-through status by that same judicial fiat.
It is manifestly unjust to impose upon the holders of the certificates such a draconian outcome when the harm, if any, that accrues from being unable to foreclose properly falls upon the originators, servicers and their agents who failed to perform their duties according to law.
Now the game is afoot.
A newly unsealed lawsuit, which banks settled in 2012 for $95 million, actually offers a different reason, providing a key answer to one of the persistent riddles of the financial crisis and its aftermath. The lawsuit states that banks resorted to fake documents because they could not legally establish true ownership of the loans when trying to foreclose.
This reality, which banks did not contest but instead settled out of court, means that tens of millions of mortgages in America still lack a legitimate chain of ownership, with implications far into the future. And if Congress, supported by the Obama administration, goes back to the same housing finance system, with the same corrupt private entities who broke the nation’s private property system back in business packaging mortgages, then shame on all of us.
Your house, if you purchased it or refinanced at any time in the last 10 years, probably has a fake document somewhere in the mortgage chain.
I've been writing about this since 2007. Continually.
This lawsuit was filed in 2011, five years later.
But yeah, folks, it was all just a "little paperwork blunder" according to damn near everyone in the political sphere.
Like hell it was.
A federal judge on Monday made the rare move to stop the foreclosure auction of an Aurora woman's house in a case that squarely takes on the constitutionality of Colorado's foreclosure laws.
U.S. District Judge William Martinez issued a preliminary injunction against the sale of Lisa Kay Brumfiel's four-bedroom home, scheduled for Wednesday in Arapahoe County, until the judge can decide whether parts of state law are unfair to homeowners facing the loss of their house.
"Unfair" isn't quite the word.
Colorado, for those who haven't followed either the news or The Ticker, passed a nice law to "solve" the foreclosure problem for banks -- they stripped the requirement that the banks actually have the mortgage documents to prove that they were the proper party to be able to foreclose.
Remember that the big issue a couple of years ago was "robosigning" -- that is, document forgery. Continuing the scam is, of course, the highest and best use of "lobbying" lawmakers, and in Colorado the banksters scored big, removing even the pretense that a foreclosing actor actually owned the mortgage through documentation -- even forged documentation!
Now a simple statement became enough.
So-called "financial news media" has ignored this, of course. It's in their "best interest" too; after all, you wouldn't be able to sell ads on a TeeVee station talking about "together we'll go far" if the people understood that how the stagecoach "went far" was by stealing all your property.
I thought I was disgusted in the 1990s when I saw company after company issue fanciful S-1s collectively claiming the GDP of the world a few dozen times over. That was indeed quite the scam, and when it came apart everyone who believed in it lost all or most of their money. Nobody was held accountable for that in the media either; witness Cramer. He got a TV show out of it. What did you get out of his list if you bought into it just weeks before it all blew up? That's simple: Bankruptcy.
But these guys were and are chumps. After all, we're just talking billions there. No, the big enchilada is taking homes, the biggest asset that most Americans have, slicing and dicing that while turning it into "financial products" that the banksters can then skim off their "piece" of, taking what should be a durable consumer good and transforming it into the greatest heist of all time.
Nobody has put a stop to it, despite clear proof via admission that not only were thousands upon thousands of perjured documents filed with courts but in addition to that there is an email and other document trail that the banks knew they were screwing people as their own staff were calling these securities by such lovely and value-descriptive titles as "vomit" and "trash."
Our local, state and federal governments have all been involved in what amounts to an organized looting operation. As people have challenged the schemes the response has been for the banksters to go to the governments and get passed even more laws making legal what would otherwise be a raw abuse of process and even outright theft.
Now there may be one tiny bit of honest judicial intervention -- in Colorado.
This problem is not about, at its core, whether someone paid their mortgage or not. It is about whether a financial institution can take a debt instrument and pass it around in name only as the "footer" of a monstrous labyrinth of bogus securities and schemes from which they skim fees and costs while damning the ordinary people to bear those costs whether they are actually the proper party or not.
At its core this is about abuse of leverage and manufacturing a retroactive paper trail after the fact to cover up what were a host of improper and, perhaps, criminal activity beforehand. It is a rank violation of the IRS code, not to mention Trust Law where these "securities" are bundled and packaged, to fail to transfer into the trusts these loans in a timely manner. The tax implications alone run into the hundreds of billions of dollars and a huge part of why such "laws" were pushed and passed appears to be focused on preventing a meritorious defense from reaching into that cesspool and forcing out into the open the fact that these instruments do not in fact really exist as the requirements in the law to create them were not followed.
Now, finally, literal years after I and others started raising hell about this, there is one judge who has called "Bee Ess!" on this entire house of cards. Perhaps -- just perhaps -- Colorado's "law" will be ruled an unconstitutional piece of trash intended to steal homes from citizens at literal gunpoint.
When courtrooms are used to take property without the moving party having to produce the actual documentation proving their standing what has happened is that the party filing suit has managed, through legislative fiat, to obtain the guns and personnel of government as their own "private army" which they are then abusing to commit an act that is in form, substance and function virtually indistinguishable from old-fashioned armed robbery.
We are well past the point where the judiciary should have put a stop to this crap.
Here's hoping that Judge Martinez does so.
Wow, you're so on-the-ball that it only took you five years to start raising hell beyond when multiple people, myself included, began to howl about exactly this point?
Investors in mortgage-backed securities, built on the shoulders of the tax-advantaged Real Estate Mortgage Investment Conduit (“REMIC”), may be facing extraordinary tax losses because of how bankers and lawyers structured these securities. This calamity is compounded by the fact that those professional advisers should have known that the REMICs they created were flawed from the start. If these losses are realized, those professionals will face suits for damages so large that they could put them out of business. That is, unless the Wall Street Rule is applied.
From 2010-10-03 on The Ticker, which re-hashed a theme I've been pounding on since 2007:
See, there's this little problem. A REMIC (Real Estate Mortgage Investment Conduit, or "MBS") is a special thing under IRS rules. Normally a business would have to operate at a profit or loss, pay taxes, and then pay dividends. This results in double-taxation.
A REMIC has a special status under the IRS code which avoids this; the interest flows through to the investor without being separately taxed at the business-level of the REMIC itself.
But in exchange for this, there are constraints. One of them is that a REMIC cannot acquire "distressed" assets - that is, notes that have defaulted. It cannot, in other words, engage (intentionally, up front) in what would be considered "recovery operations" if you will.
The reason for this is that if it could, every "distressed asset" acquirer would set up such a structure and avoid monstrous amounts of tax. So, as to avoid this problem, a REMIC can acquire only loans that are current.
And of course if there are no notes that are transferred this explains many things.
Like robosigned documents.
Like "lost document" affidavits (it explains notes being intentionally lost, since they can't be transferred to their correct place late, as the time window has long expired to meet legal requirements.)
Like allonges that magically appear on a document years later (and which are barred under the UCC because otherwise fraud becomes trivial to commit.)
Because REMICs did not file the correct returns and may have committed fraud, the statute of limitations for earlier years will remain open indefinitely, giving the IRS adequate time to pursue REMIC litigation after it obtains the information it needs.If the IRS does not take action at the appropriate time, however, it will be a serious failure and will result in the loss of billions of dollars of tax revenue for the federal government.
More troubling still is the IRS’s failure to address the wide-scale abuse and problems that existed during the years leading up to the financial meltdown. The IRS’s failure to adequately police REMICs is one more reason that the mortgage industry was able to overly inflate the housing market. And that, inexorably, led to the crash and our tepid recovery from it.
More generally, by overlooking the serious defects in the transactions, courts and governmental agencies encourage the type of behavior that led to the financial crisis. Lawmakers, law enforcement agencies and the judiciary cede their governing functions to private industry if they allow players to disregard the law and stride to create law through their own practices.
And until We The People demand through political process that this crap stop and if necessary form a new political party to do so, trampling the existing parties who refuse, you will continue to get screwed and both you and your children will be serially robbed and financially abused by these latter-day robber barons.
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