Same Old Story: Paper Trail vs, Money Trail (Freddie Mac) Posted on May 15, 2018 by Neil Garfield

Same Old Story: Paper Trail vs, Money Trail (Freddie Mac)
Posted on May 15, 2018 by Neil Garfield
Payment by third parties may not reduce the debt but it does increase the number of obligees (creditors). Hence in every one of these foreclosures, except for a minuscule portion, indispensable parties were left out and third parties were in reality getting the proceeds of liquidation from foreclosure sales.
The explanations of securitization contained on the websites of the government Sponsored Entities (GSE’s) clearly demonstrate what I have been writing for 11 years and reveal a pattern of illusion and deception.

The most important thing about a financial transaction is the money. In every document filed in support of the illusion of securitization, it steadfastly holds firm to discussion of paper instruments and not a word about the actual location of the money or the actual identity of the obligee of that money debt.

Each explanation avoids the issue of where the money goes and how it was “processed” (i.e., stolen, according to me and hundreds of other scholars.)

It underscores the fact that the obligee (“debt owner” or “holder in due course” is never present in any legal proceeding or actual transaction or transfer of of the debt. This leaves us with only one conclusion. The debt never moved, which is to say that the obligee was always the same, albeit unaware of their status.

Knowing this will help you get traction in the courtroom but alleging it creates a burden of proof for you to prove something that you know is true but can only be confirmed with access to the books, records an accounts of the parties claiming such transactions ands transfers occurred.

GO TO LENDINGLIES to order forms and services. Our forensic report is called “TERA“— “Title and Encumbrance Report and Analysis.” I personally review each of them for edits and comments before they are released.
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For one such example see Freddie Mac Securitization Explanation

And the following diagram:

Freddie Mac Diagram of Securitization

What you won’t find anywhere in any diagram supposedly depicting securitization:

Money going to an originator who then lends the money to the borrower.
Money going to a named REMIC “Trust” for the purpose of purchasing loans or anything else.
Money going to the alleged unnamed beneficiaries of a named REMIC “Trust.”
Money going to the alleged unnamed investors who allegedly purchased “certificates” allegedly issued by or on behalf of a named REMIC “Trust.”
Money going to the originator for sale of the debt, note and mortgage package.
Money going to originator for endorsement of note to alleged transferee.
Money going to originator for assignment of mortgage.
Money going to the named foreclosing party upon liquidation of foreclosed property.
Money going to the homeowner as royalty for use of his/her/their identity forming the basis of value in issuance of derivatives, hedge products and contract, insurance products and synthetic derivatives.
Money being credited to the obligee’s loan receivable account reducing the amount of indebtedness (yes, really). This is because the obligee has no idea where the money is coming from or why it is being paid. But one thing is sure — the obligee is receiving money in all circumstances.
Payment by third parties may not reduce the debt but it does increase the number of obligees (creditors). Hence in every one of these foreclosures, except for a minuscule portion, indispensable parties were left out and third parties were in reality getting the proceeds of liquidation from foreclosure sales.
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Housing Wire’s Lynn Effinger: The Same Culprits are Re-inflating the Housing Bubble

The same culprits are re-inflating the housing bubble

Here we go again…

October 26, 2015
Lest anyone mistakenly believe that I am a lone voice questioning why the ruling/governing class in America seem to have already forgotten what led to the financial and housing crisis that sparked this nation’s longest recession, Stephen Moore, the Distinguished Visiting Fellow, Project for Economic Growth at the Heritage Foundation, and former writer for the Wall Street Journal, penned a recent article for, titled, “Why is Washington re-inflating the financial bubble.”

And I quote, “Bubble, bubble, toil and trouble. That might well be the new theme for the U.S. economy. Washington – the White House, Congress, housing agencies, and the Fed – have learned nothing from the housing bubble of 2007-08.”

Moore adroitly explains (as I have many times on HousingWire), that although there is blame enough to spread across Wall Street, and to many involved in the mortgage and real estate industries, as well as to consumers themselves, the true enabler was our government.

Through easy money, housing policies that pushed people into low down payment loans that many could not or would not ever repay, and a tsunami of debt, the stage was set.

Evidence abounds that the bubble is now being re-inflated by these very same culprits:

  • Fannie Mae and Freddie Mac are once again offering 3% down payment loans, albeit with purported underwriting “safeguards.”
  • Janet Yellen has yet to pull the plug on zero-interest rate loans that have only benefitted Wall Street and their congressional “partners,” which means that interest rates will no doubt begin to rise in 2016.
  • Government debt has climbed from just under $10 trillion in 2008 to more than $18 trillion.
  • Federal Housing Administration loans have become the “new sub-prime” loans according to many high-profile members of our industry.
  • There remains significant concern that the recasting HELOC loans will drive delinquencies upward.

If those aren’t troubling signs enough, other reports, including one from RealtyTrac, recently indicated that bank repossessions have spiked 66% year-over-year in Q3 of this year.

This is the greatest annual rise ever recorded by RealtyTrac. The foreclosure sales and real estate analytics company stated that more than 123,000 single-family homes went back to the lenders in just three months.

While it is true that in states such as Florida, Massachusetts, New York and New Jersey, a virtual flood of deferred foreclosures from the previous housing crisis are finally cascading over legal and legislative dams in these judicial foreclosure states, other states, such as Nevada, are seeing dramatic increases in mortgage delinquencies.

And, a dramatic rise in foreclosure activity will impact values in certain markets. A very large percentage of the homes being foreclosed upon have deferred maintenance, which means they will be sold at discounted prices. The added inventory of homes will in itself drive down or slow rising home prices, but the discounted sales will have an even greater negative impact.

Additionally, in an article in HousingWire authored by Brena Swanson on Oct. 19, “MBA predicts mortgage lending will shrink next year,” there is both negative and positive news for those involved in real estate.

According to Swanson, the Mortgage Bankers Association said at a press conference at its annual meeting being held in San Diego that it expects a decrease in refinance mortgage originations. But, it is also predicting an increase in purchase mortgage originations.

Swanson reported that Michael Fratantoni, chief economist and senior vice president of research and industry technology with the MBA, attributed the predicted increase in purchase mortgage originations to a mixture of factors, including growing demand in households for owning a home rather than renting, and mortgage finance options.

To put an exclamation point on Moore’s observations, consider that Fannie Mae and Freddie Mac are much more bullish on loan originations for 2016. Why wouldn’t they be, since they are promoting 3% down payment loans? This will no doubt increase loan originations, but just as surely, it will increase delinquency risks.

As a result of all this, there is a looming downward spiral predicted here. That said, savvy real estate professionals, investors and potential home buyers recognize potential opportunity when they see it.

Lynn Effinger
Lynn Effinger is president of Effinger Consulting and senior vice president of Institutional Services at RIO Software Solutions, Inc. He is a veteran of more than three decades in the housing and mortgage servicing industries and is also the author of the inspiring memoir, “Believe to Achieve – The Power of Perseverance.”