San Francisco, California (PRWEB) February 28, 2012
Certified Securitization Analysis, LLC, – According to the recent government settlement, a $2,000 payment will be made to borrowers in response to the banks’ fraudulent robo-signing practices. Unfortunately, the announced settlement is too little and too late for most borrowers facing foreclosure. Homeowners are left with little option except to pursue a civil case against fraudulent mortgage securitization practices. Certified Securitization Analysis, LLC has been conducting hundreds of mortgage securitization audits to assist borrowers facing imminent foreclosure. Below is a brief overview of mortgage securitization as well as industry best practices tips for the borrower to protect themselves while facing predatory lenders wrongful foreclosure practices.
What is Mortgage Securitization? A Brief Background
Current U.S. mortgage debt stands at $14 trillion. Most mortgages in the U.S. are securitized and owned by trusts and are often referred to as “RMBS” or “MBS” trusts, standing for “residential mortgage-backed securities.” The trusts are made up of a pool of mortgages (often greater than 5,000 mortgages per trust). The loans are usually sub-prime loans. Individual mortgages were packaged into MBS Trusts; these MBS trusts were pooled, sliced and sold. The mortgage loans in each pool, or MBS Trust, include both first and second lien mortgages, both fixed-rate and adjustable rate loans. There are different “classes” within each pool of loans, representing different qualities of loans. It is not unusual for each pool to have as many as 20 different classes. Bonds are issued to investors to represent the purchase, so investors are often called “bond holders.” The loans are selected for each pool by a particular date, often called the “closing date” of the trust. While a trust may substitute loans into the pool after the closing date, there are strict guidelines on such substitutions. The pool of loans is described in a “prospectus” usually called a 424B filing with the Securities and Exchange Commission – a printed document that describes the business enterprise that is distributed to prospective buyers and investors. Many representations (promises) are made to the potential buyers of these bonds regarding the loans in each pool in both the prospectus and the Pooling and Servicing Agreement. Most of these promises to date have been misrepresented whether intentional or not, which has resulted in numerous investor lawsuits against banks and wall street investment firms involved in the marketing of such securities.
There is still a valid defense against wrongful foreclosure. Here are some tips on what to look for:
1) Borrowers need to insure that the foreclosing entity is the actual “Note Holder”. Banks act as “pretender lenders”, when originating a loan. After it is sold to the “Bond Holders” (Investors), they take on the role of loan servicing only. If payments cease, then the Loan Servicer does have the right to initiate foreclosure proceedings, but only the “Note Holder” can actually complete the foreclosure process.
2) Borrowers need to insure that the foreclosing entity is in possession of the original mortgage note – The mortgage lender (Pretender) must be in possession of the original wet ink mortgage note to foreclose, hence the term “Produce the Note”. Be aware that after several hundred audits, CSA, LLC has never seen a bank produce the original wet ink promissory note.
3) Borrowers must check to see if the promissory note and the deed of trust have been separated. The banks split the Promissory Note and Deed of Trust in every Securitization Agreement. They sold the Note to the investors and recorded the deed with the county recorder, or in over 50% of the cases, Mortgage Electronic Registration Systems, (MERS). MERS told the servicers to hold the notes, and many or most of them were destroyed or lost. Further, the notes were separated from the mortgages, making them null and void.
5) Borrowers need to check if loan was recorded with MERS. Improper Mortgage Assignment – Over 60 million mortgages were assigned to MERS (Mortgage Electronic Registration Systems, Inc.) MERS business practices have been ruled by a NY Bankruptcy Judge in 2011 as unlawful.
6) Borrowers need to learn how to create a free account on http://www.secinfo.com for investigation of public SEC filings. Objection to an Entity that is Foreclosing – Mortgage Servicers will often foreclose in their own name and not reveal the identity of the true holder of the note. Since most of the Mortgages, if not all are owned by investors, through MBS Trusts, each investor only owns a portion of the collective pool of mortgages, but not any one specific mortgage. Therefore, there is no one who can legally foreclose.
7) Borrower must demand that the mortgage lender validate the debt. If homeowners would read their Deed of Trust they would discover it to be a glorified lease Agreement. This is why when paying off a mortgage, a homeowner must request a payoff letter from the bank, this is the only time the bank is admitting that there is a debt in existence. There are many reasons for this and will be discussed in-depth on our website soon.
CSA is now offering free mortgage securitization audit assessments to homeowners facing foreclosure. As legal options are dwindling, this should be the main focus of any wrongful foreclosure defense.
For more information, please contact us at http://www.securitizationanalysis.com or write to: sales(at)securitizationanalysis(dot)com or call (415) 316 8776 to schedule a time for a mortgage securitization assessment.
Certified Securitization Analysis (CSA), LLC is a consumer advocacy firm that provides due diligence and investigates mortgage securitization fraud. The Company’s proprietary methods and processes for audit and analysis focus on legal standing issues in foreclosure situations where the underlying mortgage was securitized.
CSA is not a law firm. CSA’s information and services are not intended as legal advice and practice.