Balancing the Scales of Justice for Pro Se Homeowners

Posts by Simonee

Do you have a claim against New Century Mortgage?

Posted by on Feb 20, 2012 | 2 comments

New Century Mortgage is currently in the process of wrapping up its bankruptcy proceedings, having successfully skirted dealing with the feared “floodgates” of borrowers claiming to be known claimants harmed by New Century’s, and its associates in enterprise, predatory lending practices.  So let’s take a quick look at few facts.

  • New Century originated approximately 100 Billion in Mortgage loans between January 2004 and April 2007
  • Estimates put the number of discrete borrowers between 2 to 3 million individual loans.  (According to the Center for Public Integrity, the average loan size at the subprime lending peak in 2005 was $183,000 per loan (See here  Read under the “Deeper and Deeper in Debt, ¶3) – that would put the number of borrowers closer to the FIVE million mark)
  • The Missal Report states that, at a minimum, 10% of those loans were subject to TILA/RESPA Violations, state and federal violations, faulty appraisals (overvaluing property) among other actionable deficiencies.
  • The Missal Report details that New Century was provided monthly reports that detailed, on a loan level basis, the precise reason for an investor refusing the loan because of the above mentioned problems.
  • The Missal Report details how New Century created Bid Sheets detailing the obvious deficiencies and problems of the above identified loans that were then sold to investors as “Scratch and Dent” loans at a discount.

The Liquidating Trustee, Alan Jacobs, and the Creditors Committee (made up of the likes of Deutsche Bank, Wells Fargo and Credit Suisse) claim that they “never knew” of any borrower having a potential claim.  Really?  Jacobs claims that upon reviewing the debtor’s books and records, he can’t identify any borrower that may have a potential claim against the Estate of New Century.  Missal could find these records, but Jacobs and the crew can’t.  What do you think – is he lazy, stupid, or a liar?

                The Court has ruled in the Galope Claim that constructive notice by way of placement of ads in the Wall Street Journal and the Orange County Register are sufficient.  Sigh.    The Wall Street Journal, in 2007/2008, reported:

  • Paid readership of approximately 1.2m in 2007 – so the Court assumes that what, 100% of the New Century customers read the WSJ?  And that of course does not deal with the other 800,000 to 1.8 million borrowers (assuming the 3m count is correct and not the 5m).
  • The profile of a WSJ reader in 2007/2008 is an individual with an annual income of 191k and a personal net worth of 2.1m – does this describe a subprime borrower?
  • The Orange County Register has a readership of approximately 650,000 daily readers
  • The profile of the daily reader is has an annual income in excess of $100,000 annually

If you add the 1.2 million readers from the WSJ with the 650,000 readers of the Orange County register, and assume that the number of borrowers IS less than 2 million – you still can NOT rationalize that these two publications were sufficient.  If you follow the Center for Public Integrity estimate of borrowers, the notifications fall woefully short of providing constructive notice to all New Century borrowers.   

Testimony by New Century counsel confirms that their intended audience was the financial firms (those that funded New Century Mortgage) and the employees of New Century Mortgage (the individuals that perpetrated and executed the predatory loans).  Of course the Judge has expressed his “weariness” of the case and that apparently is a sufficient basis upon which to allow New Century Mortgage to continue its victimization of borrowers. 

A homeowner would have to claim that they are one of the “scratch and dent” borrowers or that they were subject to a “kick out” by New Century Mortgage investors.  The only way to find that out is through discovery because they sure as heck won’t tell you – even though by law they were required to do so.  The Missal Report also details how Patrick Flanagan, a Sr. Executive at New Century, negotiated contracts with investors that they would not kick out more than around 2.5% of the loans for known problems.  This means the investors – you know the ones sitting on the Creditors committee like Deutsche Bank, Wells Fargo and Credit Suisse – closed their eyes and took the Loans knowing they were taking Notes that were subject to claims by the borrowers.  Missal, not surprisingly, was unable to verify this – think Deutsche Bank is going to admit that they intentionally ignored problematic loans?   Does anyone know what that does to their precious “holder in due course” status?  Doesn’t the UCC state that in order to claim HIDC status when the investor purchases the Notes they are claiming that they were unaware of any known “claims”??

I am exploring this interesting aspect …and if you are a New Century Mortgage borrower…you might want to spend some time reading the Missal Report  (Click HERE to down load a partial report).  Compare YOUR loan to those characteristics describe as being a basis for a “kick out” (starting around page 109 of the report) and then discuss it with your attorney NOW.  You have to ask, if New Century KNEW…then weren’t you entitled to ACTUAL notice and not  just constructive notice of the deficiency?? 




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San Francisco Recorder Claims 99% of LOANs contain irregularities and 84% contain VIOLATIONS OF THE LAW

Posted by on Feb 16, 2012 | 11 comments

Whoo hoo! Bravo to Phil Ting, Assessor-Recorder for San Francisco.  Mr. Ting is joining ranks with other county land recorders in assessing and calling the Banks on their fraud and violations of the law.  Read here for this fascinating report that details that 99% of the loans evaluated contain irregularities and 84% contain VIOLATIONS OF THE LAW.

Areas the Assessor evaluated are:

  • Assignments
  • Notice of Default
  • Substitution of Trustee
  • Notice of Trustee Sale
  • Suspicious Activities Indicative of Potential Fraud
  • Conflicts Relating to MERS

This is a blue print of how to identify the fraud in YOUR foreclosure and title documents.  Don’t waste another minute reading this blog..down the report and READ IT NOW. (foreclosure-in-california-2-12 SF County)

Thank you MSFRAUD.ORG for bringing this VERY IMPORTANT document to the attention of your readers!




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Posted by on Feb 8, 2012 | 4 comments


This morning I spent 2  ½ hours discussing the current mortgage crisis with  Storm Bradford from Mortgage Fraud Examiners (See here for Storm’s website).   Storm brought to light a few disturbing issues that have been troubling me but I have not been able to articulate.  As a homeowner that is continuing to battle the banks one of the most frustrating aspects is being able to clearly understand what the issues are, what the law says about those issues, and what the law  says about whether I am entitled to a recovery from those issues, and what the law says that recovery should be.  I hear a lot of theories but not a lot of case law cites backing up those theories.

With all the noise out on the internet – securitization failures, no real defaults, falsified and forged documents, TILA/RESPA audits – there seems to be a myriad of solutions that ultimately are NOT solutions but rather stall tactics in delaying the inevitable, the loss of one’s home.  Some sites call these services “tools” in the foreclosure defense while others call them “scams”.  So I am going to try to cut through the chaff and noise and talk about my own personal perspective on these services and hopefully, help you gain enough insight and knowledge so that you can further investigage them and make that determination for yourself rather than letting others tell you.

We have strong emotional ties to our homes, so much so that we seek to find reasons why we should be allowed to keep our home based on what we want, rather than what is proper and legal.  Many of us have attempted “loan modifications” and have spent time (and for many, money) in having some fool lawyer submit our paperwork to the bank – only to have the bank deny the modification.  I have not spent a lot of time pursing or investigating the whole loan modification services so I do not have a lot to offer you in regards to loan modifications.   Other than I know of TWO people that have gotten one – and one of them had to write letters to our Senators, the CEO of Wells Fargo and the Obama Administration; she caught the attention of Feinstein (or was it Boxer?) and that caught the attention of Wells Fargo which ultimately lead to her getting her loan modification in the form of a more favorable rate.  She did it herself and spent many an hour writing letters and making phone calls.  I will ask her to write a guest blog detailing how she managed to get the elusive, and I say urban myth,  “loan modification”.

As loan modifications continue to be denied, homeowners have started seeking defenses to the foreclosures.  The first defense  was the Produce the Note theory; the second defense was TILA/RESPA violations can lead to rescissions; and the third defense are Securitization Audits with mortgage loan files demonstrating the Note is not in the REMIC Trust and/or is NOT in default.  Each of these defenses is being promoted by firms offering services to help you in your battle by employing the firm to conduct the service, so you can use it in your legal strategy.  There are also two other services I hear a little bit about but are not prevalent, yet  remarkably – these are the two services that most likely will result in getting the banks to the table – the first one is a Forensic  Mortgage Audit and/or Mortgage Fraud Examination and the second is a Title Audit.

Before any homeowner (you) can justify the expense of any of these services you have to first determine why you are interested in fighting your foreclosure.  We all have an emotional investment in the property that we call home as well as in our own credit scores and financial health.  When a foreclosure is looming our gut instinct is to first to save our home and if that fails, to move past the situation as fast as possible.  It is very hard to take a discerning look at your situation and make a decision based on logic rather than on the emotional gut reaction to fight and keep your home.  Yet that is exactly what you have to do.

For myself I would look at what the value of my home is, what I owe and what the value of a loan modification would be.  If I owe 500k on a house that is now worth 250k and most likely, in the next year or two will drop another 10 or 20% in value – what kind of loan modification would I want?  I had an escalating ARM that was making the payments unsustainable – I needed my ARM adjusted to a fixed rate.  This of course was 4 years ago; today I would want a principal reduction along with both a fixed AND lower rate on the Note.  If couldn’t get that I would want to do a short sale or deed in lieu of foreclosure and move on with my life.

Why would the bank be inclined to reduce my principal or rate?  Because they like me and want to be nice?  Of course not.  These are National Banks – soulless, careless money machines that only want as much money from you (and me) as possible.  So they are only going to do a modification for one of two reasons – some government program qualifies you for the modification and allows the Bank to recapture what they are losing on the loan; or there is a violation of the law somewhere in either your mortgage origination or in the servicing of your loan and you bring that violation to their attention.

You have a choice now – go investigate the government home modification programs and determine whether you 1) are qualified for the program and 2) if your bank is participating in the program; and the other choice (which you can do both by the way) – is look at your actual loan papers and determine if there are any violations of the law that you can sue under – and if you can sue, what is the recovery for those violations and is that recovery worth the cost of the fight to get the recovery?  Some people may have violations in the servicing of the loan as well as – such as forced placed insurance, misplaced or misapplied payments, etc.

Since so many people are in the middle of foreclosure (and trying to get a modification) I am going to go through the services mentioned above and how they may be used in a legal strategy to defeat the foreclosure.  Notice I said “defeat” and not stall.  Unfortunately some of these services only delay the inevitable – the foreclosure on your property.

I am going to go through these services in the priority of which I, if I were starting out today, would use the services. [nonmember] REGISTER FOR FREE AND READ THE FIVE MAIN SERVICES BEING SOLD TO HOMEOWNERS.  CLICK ON THE BUTTON FOR A QUICK EASY REGISTRATION!

         [/nonmember][ismember]       FORENSIC LOAN/MORTGAGE AUDIT:  This service looks at the actual origination, promissory note and deed of trust/mortgage and determines whether there are any contractual breaches that are a violation of the laws of your state or a federal violation which would entitle you to a recovery worth fighting for.  Read this statement again.  Contractual breaches that are a violation of the laws of your state or a federal violation that would entitle you to a recovery that is worth fighting for.   Note I am not mentioning anything about securitization because at the core of the foreclosure fight is what are the contractual breaches that violated the law.  We already know that 99.9% of the predatory lenders (that DOES include Wells Fargo and Bank of America) used fraudulent appraisals prevalently and those appraisals  overvalued the property so the homeowner was induced into a contract for a property that was already underwater.   This is a powerful argument and something an attorney can sink their teeth into.  The Forensic Loan Audit will detail the fraud in the appraisal and any other fraud/violations of law they see in your paperwork.  THIS IS THE FIRST AND MAY BE THE ONLY SERVICE YOU NEED.  You can take that report to an attorney who will be able to see a clear strategy on how to help you get what you want.  OR the audit may demonstrate that there are no violations.  So you may want to attack the foreclosure process itself.

                TILA/RESPA AUDITS:  Now I foolishly purchased one of these right out of the gate; TILA/RESPA violations are for refinance loans not purchase only loans.  That should have been one of the first questions asked by the auditor and she should have told me, even if I find them, you have no legal grounds to pursue them since this is a purchase loan, not a refinance loan.  In addition, the auditor should have asked when the loan was originated because 1) there IS  a statute of limitations and 2) the recovery is minimal so is it worth pursing?  But these are not questions someone asks or answers they give when they are cashing your check.  IMHO, the auditor should provide you with a check list to determine whether the audit is of value to you BEFORE you purchase the audit, and second, they should have provided me with a document on what each violation means and what the potential recovery value is and a really savvy auditor should give you case cites to back up the claims.  Short of getting that, it is a waste of time and money.  When I gave mine to my attorney he laughed and asked me what I wanted him to do with it.  I was not a happy camper.  I am not saying there isn’t a use or place for a TILA/RESPA audit, but the wins where a homeowner actually STOPS or overturns a foreclosure based on a TILA/RESPA violation are few and far between, and were egregious violations.  You or your attorney HAS to know what to do with a TILA/RESPA violation.

                TITLE AUDIT:  These are audits where the auditor goes to your public county court records and documents what they are seeing in the records.   They get a copy of each document on file (i.e. Deed of Trust, assignments, Notices of Default, Trustee Sale, etc.)  The auditor looks at each document for:

    1.  Who filed it? Did that party have the legal right to file it?
    2.  Who signed it? Are they a known robo or surrogate signer?
    3.  When was it filed? Signed? Notarized? Is the notary known for fraudulent notarizations?

The title audit then details where there are improprieties that may be evidence of fraud or simply a technicality in the manner in which the document was executed and filed.  Most likely you will need an attorney to look at the audit and have that attorney tell you what the violations of law are and whether there is potential recovery (either in stopping the foreclosure or monetary) that justifies hiring the attorney to purse the violations.  Keep in mind that YOU can go get the documents yourself, you do not need to pay someone to get your documents.  What the auditor should bring to the table is their being able to recognize known robo or surrogate signers (which in Missouri and Nevada are considered forgeries and are illegal) and where there are gaps in the chain of title. These are grounds to use in a legal strategy to stop (but for the most part have only stalled) the foreclosure.  The banks can overcome technicalities in most cases (though not all); if there is fraud or an actual violation of law– then the battle is on.

                 SECURITZIATION AUDITS:  This is the latest craze right now and there are both good audits and stupid audits.  The purpose of the securitization audit is to assist your attorney in your legal strategy by determining if the party foreclosing has a standing to foreclose and whether the actual beneficiary has incurred a default.  Just as you can go to your county recorder’s office and get your title records, you can also go to EdgarOnline and pull the securitization documents of the REMIC Trust that is listed on your Notice of Default and/or assignment.   (See Who is Edgar? To pull your documents on your own).  Now what the audit SHOULD do is:

    1. Detail who the parties are to the REMIC Trust and their roles
    2. Detail when the REMIC Trust closed and whether your Note and Deed of Trust made it into the trust; if not the report should detail the failure.
    3. Detail what the conveyance requirements of the REMIC Trust are and whether there is evidence that the parties followed the conveyance requirements or did not; if they did not, then the report should detail that failure.  (i.e. Trust requires an endorsement of all parties but your Note only shows an endorsement in blank by one party, etc.)  This audit should also detail if the Purchase Sales Agreement was followed as well as the Pooling & Servicing Agreement.
    4. Evaluates the mortgage loan files to determine if the REMIC Trust has actually incurred a default and if not provides you with a detailed analysis of how the REMIC Trust has not incurred a default.  (This in turn would mean the Notice of Default is fraudulent and a violation of CCC § 2924 (California) since ONLY the beneficiary can incur the default).

Keep in mind that the whole argument on the whether the REMIC Trust claiming rights to your Note is a “theory” that is being debated in court rooms across the country.  Can a homeowner, who is not a party to the REMIC Trust, defeat the foreclosure based on the parties not having legal standing to pursue a foreclosure?  The primary argument is that the homeowner is NOT a party to the REMIC Trust and therefore can make no claims against the REMIC Trust’s rights (this is the bank argument); the homeowners argument typically is that the homeowner is not trying to enforce the REMIC Trust documents but rather demonstrating to the court that the NOTE is not the property of the REMIC Trust and therefore, the party foreclosing has no standing.  And, if the Note IS in the REMIC Trust, the TRUST is reporting to the investors (owners) of the REMIC Trust that the Note is not in default.  This is serious legal sh** and your house is at stake.  If you are going this route, either totally understand YOUR states laws and the securitization or hire an attorney who gets it.  In fact BOTH of you should get it; because if you don’t then you are in for one long, expensive fight that right now is untested and there are some wins and many losses.

If you purchase a securitization audit and all you get is a binder full of the SEC documents (photocopies) with no legal analysis and no certified copies of the documents, demand your money back.  Those are expensive audits (upwards towards $4,000 per audit!) and you damn well better get documents you can submit at trial as “evidence” and you need to make sure that whoever did the audit can testify at court.  Most of the legitimate services will only work through an attorney – so if they aren’t demanding you have an attorney you need to ask some hard questions before you spend the money.   If you are a Pro Se, then it is imperative that the firm you are dealing with provides certified copies, has an expert evaluating the documents, an expert who can testify at court and that you totally understand how to plead the REMIC Trust’s failure to secure the Note.  I can not stress enough about making sure this is part of a total overall legal strategy — don’t take your SEC documents and then some pleading you downloaded from the interent and run into court.  LEGAL REPRESENTATION IS HIGHLY RECOMMENDED.  In fact, you should only get this audit, IMHO, if you DO have an attorney and he/she tells you to get it.  And most likely, if the attorney thinks it is a good idea, they will have resources who can do the audit for you.

UPDATED:  One final thought on the Securitization Audit – (thanks Dutch) the language can not be couched in “most likely” or “more likely than not”.  If the Audit is telling you that then you won’t be able to use it in court; you will have to do  discovery to CONFIRM it – otherwise it is just hearsay allegations.    Here is an affidavit-Tom-Adams-esq-horace-case who testified for  the Plaintiff Horace – this is the kind of testimony that is worth 4k.  Which Horace WON! (See here).

This isn’t easy stuff folks, I know that.  I am four years into this stuff and I am learning every day.  What I do know is that prevention is the best course of action.  If you are not in the foreclosure process then definitely investigate the loan modification programs (do it yourself folks, no one can guarantee the loan modification, so go see what the government is and isn’t doing and see if you qualify for one of their programs) – and get your loan papers audited.  That is where your legal strategy should start – if you do these two things right you most likely won’t need a title or securitization audit.  And definitely pass on the TILA/RESPA audits unless there is a viable violation that is worth pursuing.  Make sure the TILA/RESPA auditor can tell you all about the potential violations, the timing to bring actions against those violations ,  what the recovery is and can provide case cites to support the findings.  If they can’t have a meaningful, honest conversation about what may or may not be found in the audit, keep looking.  When you find someone who can have that conversation then you will be better prepared to dtermine if it is a viable investment of your prescious legal dollar. The actual audit will give you the details of the violations (and cites!)   (But as Storm says, the bite is in the fraud or contract violations, not TILA or RESPA).

I think that we will start seeing more and more cases involving the robo – surrogate signing and false notarizations of documents.  I am not clear how the homeowner uses these in their legal arguments and as I research and understand it better, I will definitely tell it to you here.  I do get the securitization audits but am wary of how they are being done and whether homeowner’s expectations are being managed properly on what the audit can and cannot do.   I believe that they do have a place in legal strategies yet they bring a layer of complexity that is vexing for most people, including judges.  The cleanest simplest way is to attack the underlying contract (the promissory note) and the process in which you entered that contract.  When you can’t attack the contract, then attacking the foreclosure through a Title and Securitization Audit are worth considering.   As I gather up case law on these issues I will definitely let you know. [/ismember] I would love your feedback on whether you have used any of these services and if so, were they helpful or not?






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Obama loves mobsters – AG/Bank Settlement Stinks! My oh my..Ignorance IS bliss!

Posted by on Feb 7, 2012 |

Obama is threatening financially strapped states to sign on to this settlement, or else face losing federal funding to their states. A $25 Billion penalty on $13.5 TRILLION in fraudulent foreclosures and investment fraud is insulting. Why does Obama want to give safe harbor to criminals and allow them to KEEP that which they have stolen?

We know the bank executives orchestrated pumping up the housing market through fraudulent appraisals so they could sell the loans, then they lied to the investors about the quality and risk of those loans. We know they never actually conveyed Notes to the REMIC’s so Wall Street could freely sell the revenue streams on the stock market. This is KNOWN. We know the banks have committed massive fraud by using robo and surrogate signers to MANUFACTURE documents for ownership of Notes they do NOT own. This is KNOWN.

Last night I listened into an Occupy teleconference call, which called for the settlement to have, at the minimum:

1) Full disclosure of what the banks actually did. (If there is no full disclosure, then we can assume that whatever the banks agreed to means they did worse than what we know )
2) Justice must be known for all
3) Restitution to everyone that has been wronged, to make them whole ($1200 to $1800 per foreclosure and $20k principal reduction is symbolic, NOT restitution. My fraudulent appraisal overvalued the property by $55k to 90K – so $20k doesn’t’ even begin to cut it)
4) Deterrence from repeating – if there is nothing put in place to penalize them for repeating this massive fraudulent scandal – IT WILL HAPPEN AGAIN
5) Reconciliation – the settlement needs to either go after the banks for their CRIMES and lies, or it must provide for real reconciliation that leads to the healing of our country. A paltry penalty of $25 Billion spread out over 5 National Banks is like asking someone for a quarter as a penalty for stealing $1,000 dollars – and by the way – the thief gets to KEEP THE $999.75 that is left over with no jail time. Sweet deal for the Banks.

While I have not read the settlement, I have heard enough to know that the Federal Government is once again headed down a road that leaves American’s out in the cold. Perhaps it is time that we the people, start taking actions on our own and forget about Washington DC and the idiots running around up there.

One of those ways is to start lobbying your LOCAL governments – city and county – to take actions on their own. Bold, decisive actions that put the people of the city and county first, instead of the mobsters we call National Banks. Get involved with Main Street Matters and learn about how local communites can stop foreclosures in their own cities.  Start with Stopping Foreclosures:  A Local Action Plan   down load this document and send it to every city and county official in your city and county.

YOU can make an impact if one by one, every single homeowner pulls their money from Bank of America, Wells Fargo, Chase, Citibank and put your funds into a local community bank or credit union.

YOU can make an impact by going to your city council meetings and demanding that the City withdraw its funds from the National Banks and put it into a local community bank or credit union. Get them to follow Berkeley who just pulled $300m from Wells Fargo for their role in this massive fraud (Read here)

We can’t stop Obama and our Congress from selling out Main Street – but we can protect our portion of Main Street by getting our local governments to start making a stand AND by making our own stand by refusing to do business with these mobsters we know as National Banks. If every city, every county gives push back, we can do it!  Take your stand with your money – move it.  So do it. Today!



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Is a Securitization Audit a Scam?

Posted by on Feb 6, 2012 | 3 comments

Is a Securitization Audit a Scam?

There has been a lot of talk lately about securitization audits and whether they are a “scam” or legitimate services.  A scam is a “devious scheme to defraud” or “swindle” someone.  It is trickery.  Unfortunately there are scams and the only way to protect yourself against a scam is by educating yourself on what is real and what is not real.  Scam artist prey on victim’s ignorance and manipulate the victim’s expectations by promising the impossible.

So let’s start first by understanding what a securitization audit is and what it isn’t.  Securitization is the process in which Wall Street financial companies, such as Morgan Stanley, GoldMan Sachs, Credit Suisse, JP Morgan and the banks like Wells Fargo, Bank of America, WaMu, etc.  pooled together a group of mortgage Notes and deposited the Notes into a REMIC Trust.  The Wall Street firms then broke the revenue stream from those Notes into securities or, certificates, that were /are sold on the stock market.  People who bought those certificates are the “certificate holders” of the REMIC trust.

As we now know, the Wall Street firms and banks never actually followed through with the proper conveyance of the Notes into the REMIC Trusts, and the common belief is that the majority of those REMIC Trusts are empty, they hold title to nothing.  It is these REMIC Trusts, through their Trustees – Wells Fargo, Deutsche Bank National Trust, Bank of America, etc. – who are conducting foreclosures.  The only problem is if the Note never made it to the Trust they are not the proper parties to be foreclosing.

So how does a homeowner determine if the REMIC Trust is the proper owner with rights to foreclose?  You can both pull the securitization documents yourself and read them, or you can have a Securitization Audit firm pull the documents and tell you, with documentation, whether your Note was actually conveyed to the Trust.  This is what a Securitization Audit is all about.

You can get onto EdgarOnline (which is a free online database containing all files filed with the SEC for the REMIC Trust) and pull the documents you need to review.  For every REMIC Trust, a homeowner will want to review:

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                  Pooling & Servicing Agreement – This is the document that created the REMIC Trust and provides details of who, what, when, where, and how.

  •                                 Who are the parties to the Trust?
  •                                 What the roles are of each party to the Trust
  •                                 When the Trust was created, when it closed, and when all Notes had to be conveyed (deposited) into the REMIC Trust as per the Internal Revenue Codes
  •                                 Where the Trust documents are
  •                                 How the Notes were purchased and conveyed, and how they are managed
  •                                 Which laws governed the REMIC Trust (most are governed by New York State laws)

                 Purchase Sales Agreement – This document details who sold what to who and when.  What entity sold the Notes to the depositor of the Notes for the REMIC Trust?

                Schedule of Loans – This document details the actual Notes that were intended to be deposited into the REMIC Trust.  Typically it is an excel spreadsheet that provides details such as property address, amount of the Note, etc.   Some of the SEC filings have this document; some do not.  If your REMIC Trust doesn’t have it then you will have to ask for it through discovery.

The Pooling & Servicing Agreement can be anywhere from 200 to 300 pages long; so if you know what you are looking for this can be a relative quick read (about an hour or so); if you don’t, then plan on some serious read time.  The Purchase Sales Agreement varies in length and again, if you know what you are looking for it can be a fairly quick read; if you don’t, plan on some serious read time.

This is where Securitization Audits come in; firms conducting the Securitization Audits know what to look for – they pull and read the documents and then provide an analysis of what they are seeing in the documents.  Key things that they will look at and report on are:

  •                 Who created the Trust?
  •                 Who purchased the Notes for the Trust?  Who were the Notes purchased from?  Does the Purchase Sale Agreement show a clear “chain of title” from the originator, to the seller to the purchaser to the depositor?  If not, the report should explain the failure and why it is a failure, and it should detail where in the document the failure is highlighted.
  •                 What were the conveyance requirements for the REMIC Trust according to both the PSA and the Sales agreement?  Were those requirements followed?  If not, the report should explain the failure and why it is a failure as well as the details of where in the document the failure is highlighted.
  •                 When the REMIC Trust was closed and was your Note conveyed in time to actually make it into the Trust?  (There are strict requirements that all Notes must be properly and validly conveyed within 90 days of the REMIC Trust’s closing)
  •                 What laws govern the PSA and Sales Agreement?
  •                 Is your Note on the Schedule?

 If you want to roll up your sleeves and read the documents to determine the above information, then you don’t need an audit; If you do not know how to do the above or what to look for, then an audit may be beneficial in your foreclosure fight.  You can teach yourself how to get this info and read it;  or you can pay someone to do it for you.  That is YOUR call.

I have heard people call these audits a scam because an individual can pull the documents and read them themselves; but that is not what a scam is.  A scam deceives someone into paying for something that they do not receive.

The next question is, what do you do with the information once you get it?  If you are a homeowner fighting a foreclosure, you may be able to use the audit as evidence that the REMIC Trust who is foreclosing on you is not the actual owner of the Note and Mortgage or Deed of Trust and therefore, has no standing to be conducting a foreclosure.

 And I suspect this is the real reason why individuals call the audit a scam.  If you do not know how to use the evidence that the Trust does NOT hold your Note and Mortgage and/or Deed of Trust, then the audit is useless to you.  You have wasted your money.  And that is key – you can use the audit to determine if you have grounds to fight the foreclosure for lack of standing and if the audit does indeed detail the failure of the REMIC Trust to hold your Note, you can use it as evidence in your pleadings and at trial.  But YOU or your attorney will have to know the statutes of your state and how to properly plead this information; the audit is NOT going to tell you how to use the evidence in your legal pleadings.

I think Securitization Audits have a definite place in the fight against these wrongful foreclosures; not everyone has the time, inclination or knowledge of how to find and determine this information and the audits are an effective tool.  I personally did my own research (Our Who is Edgar? ebook provides step by step instructions on how to find your documents) but that is because when I did the research it was before these audits were being offered.  It could have saved me many hours of reading especially when I did not knowing what I was looking for and it would have helped me educate my attorney more quickly.

If you decide an audit is what you want, there are plenty of firms on the internet.  Check out their references, get a sample of their work, and price shop.  There ARE legitimate firms (some are listed under our Experts Sections) providing a legitimate service. [/ismember]




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