We’ve had a series of posts (see here, here, and here) on the judge’s decision in a case called Kemp c. Countrywide, which provided what appeared to be the first official confirmation of what we’ve long suspected and described on this blog: that as of a certain point in time post 2002, mortgage originators and sponsors simply quit conveying mortgage notes (the borrower IOUs) through a chain of intermediary owners to securitization trusts, as stipulted in the pooling and servicing agreements, the contracts that governed these deals. We say “appeared to be” because Bank of America’s attorney promptly issued a denial, effectively saying that the employee whose testimony the judge cited in his decision, one Linda DeMartini, a team leader in the bank’s mortgage- litigation management division. didn’t know what she was talking about. As we discussed, this seems pretty peculiar, since she was put on the stand precisely because she was deemed to be knowledgeable about Countrywide’s practices.
Today, an article appears in Bloomberg, and it appears to be a rehash of this now week-old story, so I was puzzled to see it run now. But buried in the article is the probable reason for this piece, namely, that the Bloomberg reporters saw that BankThink had purchased and posted the trial transcripts, and quoted more of DeMartini’s testimony. And it isn’t pretty. From Bloomberg:
The judge asked DeMartini whether the notes ever move to follow the transfer of ownership, according to the transcript of the August 2009 hearing.
“I can’t say that they’re never moved because, I mean, with this many millions of loans as we have I wouldn’t presume to say that, but it is not customary for them to move,” DeMartini said.
This is in keeping with the judge’s recap, and also underscores the notion that it was Countrywide’s practice to not convey the notes. We have been told separately that a senior industry executive also said that no one in the industry transferred the notes. If true, this has very serious implications. As we’ve indicated, it means that residential mortgage backed securties are not secured by real estate, or as Adam Levitin put it, they are “non mortgage backed securities. Bloomberg provides further comments along those lines:
“It may mean investors who think they bought mortgage- backed securities bought securities that aren’t backed by anything,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California.
With the ramifications so serious, expect industry denials to continue apace until the evidence becomes overwhelming.
Of course there is no discussion of the elements of the article that don’t agree neatly with the “grassy knoll” approach to legal analysis, such as:
“The transfer of mortgage notes was outside the scope of DeMartini’s knowledge because she doesn’t deal with the sale of loans, Platt said.
DeMartini, who at one point said she wasn’t “comfortable”
testifying about the extent to which notes were transferred before continuing to do so” OR
“Those who seek to attack the integrity of securitizations have taken a number of approaches that have been refuted, so now they’re focusing on New York trust law,” said Karen B. Gelernt, a lawyer in New York at Cadwalader, Wickersham & Taft LLP who works for banks.
The part of the law they cite relates to “actions taken by the trustee after the trust is formed; it’s nonsensical to apply this provision to the creation of the trust,” she said. “There doesn’t appear to be any case law that supports their interpretation.”
yeah but have you seen the story in the new Time magazine?
GSAMP (goldman) owned a bunch of mortgages, their ‘person on the phone’ didnt even know that the trust ‘custodian’ was supposed to have the note, not the trust ‘trustee’. the guy found the note in some warehouse somewhere.
of course he also mentions a situation where tens of thousands of notes just got ‘lost’ in shipment between sites.
now if i ‘lost’ my drivers license and was driving on the highway and smashed someones car, i’d be arrested for driving without a license. if i didn’t have my insurance card, it wouldn’t matter if i really had insurance, i’d be guilty of a crime.
please explain to me why the fundamental basics of american law are different for robotic plaintiffs like MERS or massive corporations who dont seem to be able to tie their own shoes, spending too much money on executive bonuses instead of getting their basic paperwork looked after properly. doubtless some ‘efficiency expert’ decided to cut thousands of workers who could have dealt with all this stuff but theyd rather give a ‘performance bonus’ to dick fuld or jimmy cayne.
Why is everyone so up in arms about this? The GSEs will simply buy all of the questionable securities and put those losses on the treasury. It really makes little difference.
The cost of the bailout isn’t the $2T in Fed balance sheet expansion or $700B TARP, it’s the $40T or so in guarantees the government has and is making, the GSE being just a fraction of those promises. These off-balance sheet promises which can never be paid make the US Treasury the next Enron…and folks are complaining about title conveyance? Big whoop.
That IS what I’ve been talking about in relation to these title issues. It’s the GSEs, stupid! The banks are apparently trying to unload a lot of “toxic” stuff onto the government before this whole legal thing caves. It isn’t just about feeling sorry for the poor homeowners; it’s this train wreck headed straight for you and me as taxpayers and citizens.
That’s the middle ground, the compromise. There are more extreme ways out, though:
(1) Congress can change the laws to give the banks special rules just for them — but then your property rights are toast. Just a little itty-bitty Constitution getting in the way, but it’s not as if that has mattered in the past.
(2) All these people can fight their foreclosures and win. Then the banks go down again. Refer to “GSEs” speech above. Same damn thing — a bailout.
Or maybe this time we just let these criminal syndicates called banks crash, and everybody keeps their house, and we all start over with an honest society.
We’re going to have to do so eventually anyway, because as economist Michael Hudson has written, the feeding of the “miracle of compound interest” with the proceeds of less predictable actual economic activity crashed the Roman Empire and will crash ours if we let it. It didn’t actually tumble, remember? I lingered while enslaving people to a feudal system across Europe.
This is a natural law, not an opinion. An unrealistic mathematical model crashes. It doesn’t reform itself, get a bailout or find greener pastures to loot. It crashes.
reason, meet reality.
when wikileaks dumps its 5GB disk from a Bank of America executive, we will see how much ‘reason’ is behind the house of cards you browbeat us as just and proper.
I will try to drill down to the article in which you quoted this from (presumably one of the links in Yves’s post), but I would be thrilled to know just two of the “approaches” mentioned by this bank mouthpiece:
““Those who seek to attack the integrity of securitizations have taken a number of approaches that have been refuted ….”
rational @5:02, the Bloomberg item linked to in the main post included only the conclusory assertion by the Cadwalader attorney, with no further explanation or support for her claim that “approaches” to attacking standing of banks engaged in foreclosure fraud have been “refuted.”
Perhaps they were “refudiated” instead?
Just a thought.
The Platt argument re “sale of loans” being outside DeMartini’s area is pure apples and oranges. Loan sales took place PRIOR to securitization. Once the loan is securitized, it is supposed to go into the trust, period. Only extremely limited substition permitted, the trust is supposed to be static. So he points to limits of her responsibility that are irrelevant to the matter at hand.
As to her “not being comfortable”, Platt is surmising as to why. She was clearly uncomfortable being asked to make definitive conclusions either way, since she could not comment with certaintly as to whether some mortgage notes indeed might have gotten into trusts. But from what she could see, it was Countrywide’s pattern and practice not to transfer them.
As to the point re case law, the Cadwalader argument is bunk. There is TONS of NY trust case law going back to the 1800s on this one. This does not have to do with the formation of the trust, as she incorrectly states. It has to do with the adherence of the trust to its governing agreement. The NY trust law argument is that the agreement governing the trust, which is part of the PSA, stipulates how the notes have to be conveyed to the trust in some detail. NY trusts are not permitted, per well established case law, to deviate from these requirement. So if you did not get the note into the trust as stipulated (and there were requirement both as to how the notes had to be conveyed, with endorsements through specified intermediary entities, AND time limits), you are screwed. The trust has no latitude to deviate from those instructions.
There are no rulings yet on securitizations specifically simply becasue no cases have been tried. But all five experts who advise New York State on trust law matters agree with our reading, which is the polar opposite of the Cadwalader view. Note that Cadwalader probably has liability under opinions it has provided, they can’t be seen as an impartial source here. See http://www.dandodiary.com/2009/05/articles/subprime-litigation/gatekeeper-case-against-securitization-attorneys-survives-dismissal-motion/
The Kemp case provides support for what we’ve heard, that Countrywide did not convey the notes (we reported this on NC nearly two months ago). There is also tons of evidence in consumer cases of out-of-time assignments, and incorrect conveyance chains, both impermissible as far as the trusts are concerned and hence “void acts” under NY law.
This is an amazing crucial fact: “the agreement governing the trust, which is part of the PSA ….” I did not know that the PSAs generally incorporate New York state trust law. So the creators of the RMBS/REMICs, our criminal archenemies at the money-center banks, bound themselves by CONTRACT to follow NY trust law to ensure assignment of mortgage notes to the securitization trusts. This is the first time I have seen that simple crucial fact reported!
Guess I need to get my hands on an actual PSA somehow.
You can get the PSAs on the SEC’s website.
So, why hasn’t Yves produced an actual PSA and dissected it for us all to show us where the PSA states that it incorporates NY Trust law?
Thanks, Alchemist! This is a good lead. I presume you mean that SEC’s EDGAR database includes filings by the REMIC/CMBS/RMBS trusts, because the trusts are issuers of securities (pass-through certificates). Do we search EDGAR by the name of the individual securitization trusts?
As Alchemist said, SEC’s EDGAR database shows scores of filings under the name of Asset Securitization Corp., one of Nomura’s subs:
The ninth item on that list is the Series 1997-D5 trust at the center of the malpractice case against Cadwalader. It is a commercial REMIC, NOT an RMBS or residential REMIC trust like the one to which Kemp’s mortgage should have been assigned, about which Linda DeMartini testified.
Under the filings by Series 1997-D5, the prospectuses under sections 424(b)(3) and 424(b)(5) are the third and fifth items from the bottom at this link:
The prospectuses are each 1.6 MB text files. The pooling & service agreement (PSA) is described and analyzed starting at p. 116 of the (b)(3) prospectus, here:
I am not certain whether the fully-executed PSA is attached to either of those prospectuses, or whether they are filed separately.
@Fractal – you need to know some specifics before searching. Otherwise, it is going to be difficult to navigate through the site. See the examples above.
I have discussed the New York trust issue at length since August, as has the Congressional Oversight Panel and Adam Levitin in his Congressional testmony in November (both of which were discussed here). This is not news if you have been paying attention.
I think that the funniest thing in the full transcript http://cdn.americanbanker.com/media/pdfs/CountrywideDiMartini112910.pdf is the fact that they couldn’t find the relevant signed PSA. The copy that they submitted to the court was a draft!
Here is the applicable provision of GSAMP Trust 2007-NC01 (all caps in original):
Section 12.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
I hadn’t seen any PSAs on your blog. I wasn’t debating whether or not this was news. I was just looking for some actual examples.
Thank you for the link
“Those who seek to attack the integrity of securitizations have taken a number of approaches that have been refuted, so now they’re focusing on New York trust law,” said Karen B. Gelernt, a lawyer in New York at Cadwalader, Wickersham & Taft LLP who works for banks.
Refuted? Where and by whom (other than the banks, their paid flacks and their media shills)? The cases I’m aware of that addressed the issue of compliance with the securitization PSAs have been dismissed on technical grounds (i.e., standing of investors to initiate put-back investigations).
BofA’s response to DeMartini’s admission is really and admission of incompetence of counsel. She was the witness that the bank produced. Normally, bank counsel (or any litigation attorney) would “prepare” the witness by going over her responses to likely questions. If BofA’s counsel didn’t think to ask DeMartini about the bank’s custom and practice regarding transfer of the notes or, worse yet, didn’t realize the import of her answer then I’d like to know where the bank found that legal “talent” so others can beware.
The fatcat law firms for the criminal money-center banks are as deeply in denial as their clients. As Yves’s link to the dandodiary blog shows, Cadwalader itself is facing scores of millions in liability for allegedly screwing up just one REMIC trust.
Most likely, a firm like Cadwalader was backstopping the local NY Bankruptcy Attorney or at least in-house counsel at BofA, who was consulting with a firm like Cadwalader. The big firms not want to tarnish their reputations by appearing in “minor” case – but this “minor” case does not seem so minor.
If you want to get bamboozled by Gelent, an atty for the banks, go for it.
That’s quite a pretzel she passes off as ‘argument’.
As I read her so-called ‘refutation’, the creation of a security has no relationship to it’s existence.
A is not A. A is only B.
Business Insider has semi-confirmed that Wikileaks’ next megaleak will be internal documents from Bank of America. Read about it here:
Attorney Max Gardner weighed in with his analysis of Kemp v. Countrywide at http://www.maxbankruptcybootcamp.com/demartini-testimony-in-kemp-v-countrywide.
He has been in contact with the attorney who deposed Ms. DeMartini, Bruce Levitt, who is a graduate of Max’s Bankruptcy Boot Camp.
Evidence isn’t overwhelming yet? hmm.
This article in yesterday’s Time describes how the author located a ‘lost note’ in a WF-owned warehouse in MN, by checking the SEC filing of the trust attempting to foreclose.
The loan was from Fremont General (now bankrupt), sold to GS, bundled into GSAMP 2005-HE3. Fremont General was in California, and the home is in Orlando.
A simple search of public documents on the Securities and Exchange Commissions website was able to produce the address and telephone number of the building it was in. Bank of America now concedes it made a mistake. Instead of calling Wells Fargo, an associate in Bank of America’s mortgage-servicing division requested [the] note from Deutsche Bank, which runs the mortgage trust [the] loan is in, but is not the document custodian. Wells, as the SEC documents say, has that job.
I don’t have an iPad so I couldn’t read the entire article. It sounds to me that if WF is the document custodian for GSAMP 2005-HE3, then this note may have been conveyed?
DocX has an office in Dakota County, MN. The warehouse is described as 5 miles east of Minneapolis. Dakota County is east and south of Minneapolis.
From your TIME liWhere is it? About five miles east of downtown Minneapolis, in a warehouse owned by Wells Fargo. A simple search of public documents on the Securities and Exchange Commissions website was able to produce the address and telephone number of the building it was in. Bank of America now concedes it made a mistake. Instead of calling Wells Fargo, an associate in Bank of America’s mortgage-servicing division requested Douglas’ note from Deutsche Bank, which runs the mortgage trust Douglas’ loan is in, but is not the document custodian. Wells, as the SEC documents say, has that job. What’s less clear is why Deutsche didn’t tell the associate to call Wells or why someone at Bank of America didn’t look up the same SEC filing I did. Instead, Owens, based on the information from her associate and doing no checking of her own, signed the lost-note affidavit. Douglas’ loan had officially disappeared.
(sent from iPad)
Apologies for the poor formatting in that paste. Should be:
You got most of the article.
But here appears to be Exhibit A of a robo-signer; someone is going to lose their house because she couldn’t make a phone call and no one but the TIME author could seem to be bothered to drive out to a warehouse and find original documents.
So based on the work done by the author of the TIME article, the bank now has the guy’s note. They didn’t do the work mind you; the author of the TIME article located the note, on his own dime. So the TIME author now feels really rotten about the consequences for the poor homeowner — despite the fact that it was obviously never his motive to help with a foreclosure. I’d say the TIME author is not the person who ought to be feeling remorse in this case.
BoA says that it is ‘reviewing’ Douglas’s case to see whether he merits a loan mod.
I hope that I have not overstepped Yves’ commenting guidelines by posting (twice!) in response to your TIME link. It certainly does highlight unbelievably irresponsible conduct by the banks. It’s not like it required 6 months and $80,000 for the author of the TIME magazine article to trace down that loan note; it appears to have taken him about 4 hours once he got inside the warehouse.
So glad to know that those of us still fortunate to have mortgages have put our financial well-being in the hands of morons who can’t be troubled to make a single phone call to locate a mortgage note. Wheeeeee!!!!
Is it possible to determine where this WF warehouse actually resides from the article? See my sleuthing below.
Apparently it’s LPS, not DocX, that is located at1270 Northland Drive, Mendota Heights, MN 55120. According to a post at StopForeclosureFraud*, many banks, including WF are using this address, so it’s possible that the note found by the author of the Time article only ‘found’ the note at the ‘WF’ warehouse if it was using the LPS address.
Googling for WF job openings in Mendota Heights gives 6 pages of listings in the Minneapolis area, but none are in Mendota Heights, so clearly WF also has a large operations center nearby.
I just found this comment from 11/11/10:
viking says: November 11, 2010 at 4:56 pm
In my continuing quest to find who owns my mortgage note, I tracked down the architect of Wells Fargo’s securitization program. He has been fired. He’s forty five and retired and lived in the midwest.
This person instigated and oversaw ALL ABS for WF for the better part of a decade. HUGE PLAYER. I found his home number online and called him and he picked up.
I told him how I couldn’t get anywhere with WF. After it was securitized, it went into a black hole. He laughed. He said, “if you can find a single person who understands how to track stuff, it will be the first.” He told me about the huge paperwork vaults in Denver and Salt Lake City where original mortgage notes were stored. I asked them if they were every modified to reflect changes in ownership.
He said no. Never. They didn’t modify anything. They just stored them. He offered to help me get into one of the vaults, then remembered, after he was canned, that the storage facilities were ‘consolidated’.
Yves, I believe this person would be willing to talk if his anonymity was assured. If you are interested in pursuing email me.
Looks like you found it then ;-)
If you still need more assistance with that article, leave a note.
Here’s a case in which the judge agreed with Wooddora Eisenhauer that WF had fabricated its copy of her note, and dismissed the foreclosure:
Twice bitten? Second Crestone resident claims fraud
Jefferson Dodge, Boulder Weekly, November 18, 2010
…the first page of the promissory note clearly did not match the rest of the document, in part because it didn’t have the same fax stamp. In addition, they claim, the initials and signature on the document do not match Eisenhauer’s handwriting.
This comment by Eisenhauer (a former RE agent) intrigued me:
“They don’t give a shit. They pile on penalties and fees, sell it at a discount to Fannie May for $10, and they go to the FDIC and get [80 percent] for what their claimed losses are.”
If all of WF’s notes are ‘consolidated’ in that warehouse that is suspiciously near LPS’ facility………
I’d love to read the rest of the article. Perhaps you could paste more of it on dday’s or ew’s next foreclosure posts, (about today’s hearing?) maybe?
I hang out over there in the FC posts as a root vegetable that includes my initials.
Did Gandel actually drive to the warehouse, and it only took him 4 hours to find the note? Does he live in the Twin Cities? Why would they let him in and wander around their warehouse? Did they leave bread crumbs? How is he sure it wasn’t planted, and is he sure it’s not forged? Did he compare signatures, etc. ?
Will follow up by 1 pm (PST) on 1 Dec, if not earlier.
Leaving note here ‘just in case’; late getting to dday and ew today, so please check later in the day.
I hope Yves doesn’t mind my leaving this comment, primarily for the sense of trying to leave a ‘tag’ for followup.
Hey AR, here’s what I have briefly: there are rules about what can be copied from a copyright article onto a website, so I can’t really copy any more from that TIME article, I don’t think.
The iPad version appears to be like the print version (which I happened to get my hands on this a.m.). It’s quite a read.
William Black points out that one reason to ‘lose’ mortgage docs is to hide the fact that the loans were fraudulent. Okay, everyone knows that, but at least Prof. Black has the guts to say it out loud.
Turns out that this mortgage was transferred at least 5 times.
There is also mention of someone else’s loan, which originated with WaMu and ended up in — get this — Juarez, Mexico. (Hmmm… haven’t we read about drug lords and money laundering in Juarez, Mexico…? Oh, well, maybe just coinkydink…?)
The article is in the print version of TIME and appears to be identical to the full iPad version — so get thee to thy local shops, or library, and honestly it reads like a detective novel.
It’s hard to think how the banksters look at all credible when people are reading stories like this one, as well as what Yves and other legit blogs are documenting.
Kudos to TIME on this one, I’d say.
Here’s from the original report about WaMu shipping their loan docs to Juarez:
The files were delivered to a warehouse owned by Dallas-based Affiliated Computer Services, incorporated, or ACS. Our sources say this was part of an outsourcing contract to have all the loan files imaged into a computer data bank then destroyed. Once all the files were shipped Washington Mutual closed its Houston warehouse on July 27. 
Guess I’ll have to go to town for a dead tree Time.
BofA ended the day 3.18% down, to 10.95 per. So is it Linda or Julian causing their pain….which seems very likely to continue.
heh heh. Linda is gonna hurt ’em lots, but who is Julian?
Julian Assange, WikiLeaks public frontman.
Aussie by birth. More at Wikipedia, although no doubt there’s misinfo there, given what he’s up to.
Personally, if he (er, WikiLeaks) dumps BoA docs, I’ll be giddy with glee.
WikiLeaks to go after US bank(s)
by Andy Greenberg – Forbes
These megaleaks, as you call them, we haven’t seen any of those from the private sector.
No, not at the same scale as for the military.
Yes. We have one related to a bank coming up, that’s a megaleak. It’s not as big a scale as the Iraq material, but it’s either tens or hundreds of thousands of documents depending on how you define it.
Is it a U.S. bank?
Yes, it’s a U.S. bank.
One that still exists?
Yes, a big U.S. bank.
The biggest U.S. bank?
When will it happen?
Early next year. I won’t say more.
[..] So do you have very high impact corporate stuff to release then?
I mean, it could take down a bank or two.[..]
What do you want to be the result of this release?
[Pauses] I’m not sure.
It will give a true and representative insight into how banks behave at the executive level in a way that will stimulate investigations and reforms, I presume.
Another Bloomberg story today.
Banks Resisting Fannie, Freddie Demands to Buy Back Mortgages
You have to love the line taken by the line of Courson, head of the Mortgage Bankers Association ($15 to $20 billion isn’t worth pursuing):
“We’re burning a lot of stockholder resources, and clearly a lot of Fannie and Freddie resources, to have 40 percent of these things rescinded,” Courson said in an interview. “It hurts the banks and frankly we’re wasting government resources, too.”
In an Oct. 29 research note, Credit Suisse Group AG analysts estimated that Fannie Mae and Freddie Mac would successfully be able to put back 5 percent of their delinquent loans, recovering between $15 billion and $20 billion.
“The overall loss amount is pretty contained from the GSEs,” Mahesh Swaminathan, a Credit Suisse mortgage strategist, said in an interview.
A bigger risk to large banks could be the private mortgage- backed securities issued by investment banks when subprime lending was at its peak, analysts say.
Repurchase demands from GSEs and private investors combined could cost financial institutions between $54 billion and $106 billion, the FBR analysts said in their Nov. 29 note. JPMorgan analysts in an Oct. 15 report put the total at $55 billion to $120 billion.
“We’re burning a lot of stockholder resources”
LOL….is that code for bonus pools et al.
The whole Bush HomeOwnership Society Bubble was backed by thin-air and bullshit — from Bush himself, all the way down the crooked path that wound around thousands of mortgage officers and thousands of bankers — and the most amazing part of this fraud is that no one seems to have done anything wrong …… or so it (still) seems to DOJ, FBI, FTC, SEC, Homeland Security, Treasury … duh, oh that’s right, it wasn’t collusion or conspiracy, and I’m sure the Wiki-leak about wall street scumbags will show them to all be honest cub scouts and brownies.
Cadwalader’s lawyers were part of the obstetrician group who gave birth to mortgage-backed securities.
It will become clear before too long that all of these private label mortgage backed securities are defective, were never properly assigned the documents which they were represented as having, and are utterly uncollateralized debt obligations of a razor-thinly-capitalized issuer.
With all this mess, Edward DeMarco, acting director of the Federal Housing Finance Agency, actually wants banks to keep foreclosing on the ‘two track’ process.
Meaning, if you’re in a modification, the government still wants the bank to foreclose.
Will they ever stop talking out of both sides of their face?
Fannie, Freddie regulator backs two-track process
Yves, do you have any comments on what the non-conveyance issues mean for the monolines? They have access to the loan files to support their suits against the banks. Can they tell which of these files are legit and which are not? Can they shift the tenor of their suits from reps and warranties (which as you’ve posted time and time again is a grueling process done on a loan-by-loan basis) to the broader issue of non-conveyance?
The monolines weirdly have not chosen to pursue this argument, which seems a lot stronger than their putback cases. So I’m at a loss to figure this one out.
It would make my day to see the banks that sold RMBS be hung and convicted by a jury for selling fraudulent products (backed by ex nihilo ~ chaos ~ out of nothing) to investors convicted
How flipping omnipotent these banksters behave.
The banks are…to me…in my reckoning of the global humanistic topography we call economics…the beefeaters of yore…gate / toll keepers to the monarchs of debt (cough debt slavery).
Skippy…JB how many times have we be electronically been bought and sold…eh
BTW nice to see ya.
So has anyone done an analysis of the systemic implications if it were discovered that a majority of MBS are worthless, unsecured paper? I mean, I know it would be bad, but is this totally uncharted territory or are there precedents we can look to to make predictions?
Um…Meso America…JK…they don’t need to pull the beating hearts out of firstly voluntary victims moving on to random sacrificial to satisfy the debt gods.
Do I correctly remember from some ancient memory that judges are potentially liable to very severe sanctions up to and including loss of pension etc for wrongdoing in office?
If so, this would present a pressure point where the people could achieve leverage. Taking down just one or two rocket docket jusdges would wonderfully concentrate the minds of the rest.
Good point. There’s only so long this can keep going on, right?
Yves, so if securities were not put into the trusts where do/did payments on performing loans go? And also BoFA and the like had their own “servicing” subsidiaries, what about privet label mortage servicers, like PHH how do they fit into this mess.