What is a Securitization Examination? |
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Too Much Fraud Was Committed By Way of These Securitizations |
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1.The securitization examination is a thorough examination of the Pooling and Servicing Agreement ("PSA") recorded in the Securities and Exchange Commission. This examination will detect the parties involved in the securitization.
2. A securitization means that your mortgage was put in a large pool of mortgages and sold to special purpose vehicle entities. 3. What was supposed to happen –in theory- is that your mortgage –within a big pool of mortgages- was sold to a sponsor. This transaction was supposed to be a true sale, with money exchanging hands, under a Sale and Purchase Agreement, from the originator to the sponsor. The sponsor is just an entity created to buy the large pool. The originator ("A") was supposedly selling the mortgage to the sponsor ("B"). |
| 4. Then the sponsor ("B") was supposed to sell this pool to another entity called the depositor ("C"). This transaction was supposed to be another true sale, with money exchanging hands, under another Sale and Purchase Agreement.
5. Finally, there was supposed to be a final transaction from the depositor ("C") to the trust ("D"), under a Custodial Agreement and the PSA. 6. All these steps, "A" to "B", "B" to "C", and "C" to "D" were supposed to have taken place within a period of 3 months approximately. Every PSA set a cut-off day and a closing date, which was the date that all the notes and mortgages were supposed to have been transferred to the trust. Most of these PSAs were created during the mortgage boom period 2004-2006. Accordingly most of those closing dates are within that time frame. 7. The trust was an entity that –under the Tax Code and REMIC rules- was a tax exempt entity. That means that the trustee sold the pool of mortgage into pieces or bonds or securities to multiple investors. Investors from China, Europe, and all around the world bought those securities under the belief that those mortgages were going to produce revenue or profit. |
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Securitization Examination
Part 1 of 3