What is a Securitization Examination? |
|
| 8. Trustees fictitiously fabricated rating scores and divided those securities into "tranches" (type "AAA", "AA", "A", "BBB", etc), which defined the order under which the investors could have their money back in case of loss.
9. The trust assets were also bankruptcy remote in case the originator filed bankruptcy. The bankruptcy trustee would be unable to capture back those assets and put them back into the bankruptcy estate. 10. Nowadays, during this foreclosure crisis, the steps of the securitization were missing. Banks and lenders never took pains to effect those true sales because it would have represented a lot of money. So they decided to draft long distance assignment of mortgages from the originator to the trustee ("A" to "D"), skipping the sponsor and the depositor ("B" and "C"). Most of those assignments of mortgages were signed by robo-signers without any corporate authority, and without verifying that the note was lost. 11. In lots of events, the bank foreclosing a property was not the true owner and the note was lost. 12. According to the Pooling and Servicing Agreement ("PSA") any transfer AFTER the closing date is supposed to have an independent opinion of Counsel to be transferred as a Qualifying Substitute Mortgage. There is no evidence that such independent opinion of Counsel exists in any case. 13. The long-distance transfer from the original lender to the trustee does not comply with the Pooling and Servicing Agreement. For every securitized mortgage, there was supposed to be a transfer from the original lender to the sponsor ("A" to "B"), another transfer from the sponsor to the depositor ("B" to "C"), and a final transfer from the depositor to the trustee ("C" to "D"). True transfers, true sales with money exchanging hands, under true sale and purchase agreements to make the trust bankruptcy-remote. In the subject case the transfer has been artificially fabricated from "A" to "D", skipping "B" and "C" parties. 14. Such transfers are prohibited and void and the trust loses its tax-exempt status. Additionally, the loan has to be repurchased by the original lender. 15. Any assignment of mortgage that reflects a possible transfer from "A" to "D" is void, illegal and fraudulent, since it does not reflect the true transactions delineated under the PSA. |
|
Securitization Examination
Part 2 of 3