The Fraud
How the process begins
Every American wants that "American Dream," a home of their own. So they apply at a lending institution for a home loan. This could be a bank like J.P. Morgan, Bank of America or through “America’s Largest Lender” Countrywide back in the “ole days.” Or you could apply at a “government” agency like Fannie Mae, Freddie Mac, HUD or some other agency. You could even apply through a mortgage broker. It doesn’t matter where you apply, the results in most cases are still the same.
At least 60% of the mortgages are what is called “securitized mortgages” and are all done the same way.
You believe you are applying at a lending institution that will give you a loan and there will be another party involved in the process called a "Trustee" who will sell your home if you don't make your monthly payments.
But what actually happens is something else. In most cases in America, you got a securitized mortgage which is a completely different animal than the old conventional mortgage.
You were never told this when you got the mortgage, so in my opinion, this is the first fraud committed since there was no "meeting of the minds" in the transaction. A meeting of the minds means both parties are fully aware of all the elements in the contract that you made when you bought your home. This is an essential element in every contract. If one party isn't aware of all the elements in the contract, that party was mislead. That party can be taken advantage of, which is the case in securitized mortgages.
First Part Of The Process
So what is this securitized mortgage? It's one of those mortgages that got "pooled" together with a lot of other mortgages and sold to Investors through the Securities Exchange Commission. (SEC) As you will see, this is a very fraudulent system that leaves everybody holding an empty and worthless bag. The only one's who benefit from it were the original lenders who make their money and then run.
MERS
When you signed your mortgage paperwork, you may have noticed a number on the first page of your Deed that looked like this:
“MIN 1000185-0446500019-0” And you probably thought it was a accounting or loan number or something. But what it is, is a registry number for a company called MERS. MERS stands for "Mortgage Electronic Registry System."
In reality this company is the front for the fraud. Lending institutions (Bank of America, JP Morgan, Countrywide, Fannie Mae/Fredie Mac) use this company to be the owner of your mortgage. Allegedly MERS becomes the "Mortgagee"/"Note Holder", when in reality, they are neither. In case you're wondering what a Mortgagee and Note Holder are, they are the entity you allegedly owe money to for your home loan.
But wait; they never loaned you anything did they? You got the loan from someone else, so how could MERS be the mortgagee? Fact is; they can't. You don't make any payments to them and they don't receive any profits from you.
Your lender simply put the mortgage in their name. If you look on your Deed, it will basically say MERS is the Beneficiary AND Nominee for your mortgage.
A Beneficiary is someone who receives a benefit from the contract you signed. In other words, they receive the principle and interest payments on your loan. But MERS doesn't receive any of that, as earlier explaned.
You can go to MERS' own site and see the MERS System only"tracks changes in mortgage servicing rights and beneficial ownership interests in loans secured by residential real estate."
http://www.mersinc.org/information-for-homeowners/faq#whatisthemerssystem
So basically the MERS System is a database that tracks Mortgagee and Servicing rights on your mortgage. They admit on their own site they are not the Beneficiary or Note Holder for your mortgage.
The lending industry puts mortgages in their name so these lenders don't have to pay transfer fees to the county when they sell your mortgage to someone else. If your lender sells your mortgage, the mortgage stays in MERS' name. Nice huh? Imagine if they did this with vehicles and the vehicle was involved in a robbery. How would the police ever find out who owns the car?
Bottom line is, MERS cannot demand payment or foreclose on the new home owner. MERS did this anyway until 2011 I believe, when they got busted for illegally foreclosing for homes.
Rest Of The Process
Ok, so now you know who MERS is and what they really do, so let's move on to the rest of the process.
The Depositor
In a securitized mortgage, the Original Lender sells your mortgage to someone else. In securitized mortgages, this is what is called a Depositor. A Depositor is the one who puts your mortgage into a Securitized Trust. I'll explain that later. But the Original Lender releases ALL interest in the mortgage when they sell it, and cannot demand payment or foreclose.
In many cases, this Depositor is a subsiriary of the Original Lender. At least in Countrywide's case it is. So it's not really a sale in my opinion, just a transfer to a different branch of the Original Lender. And the reason for having a Depositor is to appear like there are several businesses involde in the process so it is less likely to involved "funny business." Right huh?
The role of the Depositor is to show the house was properly appraised, the borrower can actually pay the loan, and get the mortgage rated properly by rating agencies like Moody's. They failed in all three area's by the way. Then they sell the mortgage to the Securitized Trust. And when they make this sale, they release ALL interest in your mortgage, so they can't demand payment or foreclose even though they did it anyway.
The Securitized Trust
The Securitized Trust is a trust that is set up "solely" for the benefit of the investors that put up the money for all this to happen.
There is what I call a founding document for this trust called a "pooling and servicing agreement". (PSA) The PSA states exactly what must be done throughout this whole process. If it is not followed, then the trust is either not set up right or not adminstered right and is illegal.
Since all this is run through the Securities and Exchange Commission (SEC) then securities law apply to the whole process. And Securitized Trusts receive special tax status from the IRS. So if the Securitized Trust doesn't follow the PSA, they are in violation of securities and IRS laws. So they better be following the PSA or they are in big touble!
Now the Securitized Trust is not the Beneficiary because it does not receive any benefit from your mortgage payments either. They do not receive any principle and interest payments from your money. They only receive a small percentage of the money for their services of administering the trust.
But the interesting twist in securitized mortgages is, that the Securitized Trustee DOES hold the Promissory Note for your mortgage. So by definition, they are the Note Holder. But they receive no benefit, like I said earlier. Plus they have been acting solely as the Trustee and not a Beneficiary, so they are a Trustee and beneficiary by definition only. When a contract labels partice unclearly or deceptively, the court will look at their actions to determine their true role. And in teh case of the Securitized Trustee, they are solely a Trustee, not a Beneficiary. The Securitized Trustee never had an interest in the mortgage and cannot demand payment or foreclose. Plus under all trust laws, you cannot be the Trustee AND Beneficiary. It's simple illegal because it allows too much "funny business" to go on.
Servicer
Then we have the Servicer. The Servicer basically manages the money from your monthly payments. They distribute the money to the proper accounts and receive a percentage for that service. They are not the Beneficiary or Note Holder and therfore cannot demand payment or foreclose. They can and will bill you for your monthly payment, but can't foreclose.
Another interesting twist in the Securitized Mortgage is the PSA says ONLY the Servicer can foreclose. But the PSA doesn't provide any way for the mortgage to be transfered into the Servicers name. If the Trustee does this, it violated the PSA and is in big trouble with the SEC and IRS.
Investors
Then we have the Investors. They are the oen's who put up the money for this whole process. The reality is this whole process is a transaction between you and them, and you have all these "Pretender Lenders' in between you and them claimg to be the Beneficiary/Mortgagee/Note Holder when they aren't.
But the problem with Securitized Mortgages is that Investors bought Certificates from the Securitized Trust. The Certificates give them a percentage of the benefit. In other words a percentage of the profits. That's makes them a Beneficiary, but they don't hold the Promissory Note.
The ONLY recourse for Investors was to sue the Securitized Trust that sold them the Certificates; which they did in a big way. They sued for billions and billions and won.
So Investors cannot demand payment or foreclose on your home. And they have never tried.
Trustee On Your Deed
And last but not least, we have the original Trustee on your Deed. Rememebr them? Under Washington State law, they are the ONLY one's who can foreclose on your home.
But remember your mortgage was sold. Once it's sold they are no longer the Trustee. Rememeber there is the Securitized Trustee now? They are the one's holding your Note now?
If you contact that Original Trustee they will tell you they are still your Trustee. That's because they were never informed a sale happened. They still think your Orignal Lender is the Mortgagee/Note Holder when they aren't.
And if you ask that orignal Trustee "If the mortgage was sold, would you have to sign a new contract with the new Mortgagee to be the Trustee", they will say "Yes." Because there is no contract between the Original Trustee and the current Note Holder.
Bottom line for the Original Trustee is, they can't demand payment or foreclose on you either. Under Washington State law, ONLY the Trustee on the Deed can foreclose, unless they resign or are replaced by the Beneficiary. And this change has to be recorded at the county Auditor's Office, which they never do.
Conclusion
The bottom line to all this is, NONE of these crooks have the legal right to demand payment or foreclose on you. The money you've paid for your home went to someone who had no right to the money, yet they took it. They basically stole or defrauded you out of your money, and you have the right to get it back plus possibly more too.
Securitized Mortgages gave the Original Lenders quick, fast, easy money, that left everyone else (us and the Investors) holding an empty bag. These theives then foreclosed on millions of homes illegally because this Securitized Mortgage process is hard to figure out. No one has ever put this info together like this and in a simple format anyone can understand. It has taken me over a year of LOTS (thousands of hours) of study to figure it out.
The Way To See What I Said Is True
The way you can verify all of what I said is true for youself, is to ask your Servicer who the Note Holder is for your mortgage. If you have a Securitized mortgage they will state your Noteholder is some Trust. In my case it's "CWABS, Inc. Asset-Backed Certificates Trust 2005-7" CWABS stands for "Countrywide Asset Backed Securities". The "2005-7" means it was a Trust set up in 2005. The "-7" means it was the seventh trust of that type set up in 2005? I'm not sure about that part. Asset Backed Securities means they were securitices (Certificates) sold through the SEC. You can see 439 trust names by going to this site. http://www.countrywidembssettlement.com/index.php
That site is where 49 State Attorney Generals file lawsuits against Countrywide for 439 Trusts they set up that ripped off Investors. And they won BILLIONS, which were only pennies on the dollar for all the farud the Pretender Lenders committed. So they only got a wrist slap.
Finding Your Trust
Once you get the name of your Noteholder,the easiest way to find your PSA is to go to the link below and call the number at the top of the page [(202) 551-7230] and get the info you need to fill out the form on that page from one of the SEC professionals. Then order your certified SEC documents for your Trust, which are good in ANY court as unquestionable and undeniable evidence. It only cost me $56 for ALL the documents for my Trust. Here's the link:
https://www.sec.gov/forms/request_cert_docs
Ultimately all you need is the Prospectus and the PSA, so that would only cost you $10 if you can't afford buying all the documents.
Also, you will get the documents in pdf format by email. The email they send will include an invoice where you can pay the amount by mail. I don't recommend it, but the email has the documents you need. If you really can't pay the $10-$50 for the documents, I really doubt they will send you to collections or come after you for that amount. I think you should pay the amount if possible. Come to court with cleans hands or it could come back and bite you.
The Final Proof
Now to really prove what I've said is true, read the PSA. I know, it's over 200 pages long, but you don't have to read the whole thing. You can do some smart searching through the document.
So go through what I said on this page and see if the PSA backs it up. For instances, I said only the Servicer has the right to foreclose. If your PSA is like mine it states that in section 3.12 (b).
The PSA will say the Original Lender and Depositor give up all rights to the mortgage too. It will say there must be a "chain of endorcement" which includes the "original note". The PSA states how EVERYTHING must be done. So it's the blueprint for nailing these crooks.
In the case of Countrywide, they never put the notes into the Securitized Trusts. So Bingo! You tell them you either pay back the money I paid, plus give me clear title, or they will force you to expose their securities and tax fraud in court. Do you want to settle now or in court?
