WHY MORTGAGE SECURTIZATION DOES NOT WORK

Press Release Nationwide Loan Services/ www.borrowerhotline.com
Rescission time for Homeowners


November 10th 2008 Regulatory criteria from HUD and compliance with the SEC are two very distinct and different sets of regulations that are at Odds. The newest theory is great news for homeowners struggling who need something other than government promises that are yet to be seen. The recent discovery focuses on the wide gap and distance separating Wall Street and Main Street. Therein is the logical argument for some of lenders whom remain unwilling to capitulate to borrower demands for relief in lieu of foreclosure.

According to recent score cards being tallied by house and senate members, nothing is happening with regards to the national mortgage aid plan. The news of an exact cause for the meltdown is timely given nothing is anticipated to be resolved until President-elect Barack Obama takes office on Jan. 20 next year. The president elect will then pick up the pieces while pursuing policies for administering the rescue program that are likely to be more closely aligned with his Democratic allies in Congress.

Random predatory lending over recent years may or may have not have occurred by accident or malice. Nor is there evidence the meltdown was caused by complete disregard for federal regulatory guidelines such as the Real Estate Settlement and Procedures Act. What is important to law makers and the private sector is how Wall Street fits in to the workout and why lenders are not necessarily where a homeowner will find the appropriate elixir.

Either way, consumers expect a sincere effort from the lender of record where the struggle continues to remain in one’s home. That is where the problem exists from most homeowners, according to Maher Soliman, an industry analyst and expert in the field. Experts are entitled to testify at trial because of their special knowledge in a particular field. This entitles him or her to offer opinion on the meaning of facts versus non-expert witnesses who are only permitted to testify about facts they observed and not their opinions about these facts.

According to Soliman, “I changed my views and no longer see the problem as solely due to collective recklessness and unwarranted lender predatory acts”. This news arrives after many legislatures’ grow concerned and are feeling hopeless while their constituency of homeowner’s come to grips with the high level of lender inertia and institutional apathy towards the problem.

The SEC is very specific in accordance with each offering and what roles the parties play in securitizing these loans. The level of detail and scrutiny under SEC guidelines is strict, though it varies from one loan servicing “pool” agreement to another. See the securities filing with the SEC - Periodic Distribution Reports by Asset-Backed Issuers, Form 10-D, 424B5 Registrations Prospectus -- Rule 424(b)(5)

That being said, their need to remain compliant with regards to shareholders and SEC disclosures requirements is a reason why securities sponsors are focused on other things rather than the regulatory protections offered under RESPA and TILA. RESPA protects consumers and requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers.

Mortgages are bought and sold on
Wall Street all the time and that is nothing new

The borrower’s we talk to do not even know who their lender is therefore have no idea they have a disclosure problem. According to Soliman, “loan servicing agents often cannot even tell you who the lender of record is and that is a disclosure violation should the borrower ask the question”. The loans are assigned on a regular basis away from one party to the next. Therein is another problem with regards to trustee’s where multiple transfers occur in difficult times due to bankruptcy of the original lender and or borrower delinquency and foreclosure.

An immediate failure to assign any interest or disclose of such has no bearing on Wall Street but is a violation of federal housing laws. They are not in compliance due to Mortgage Electronic Registry Systems (MERS) and that’s just the tip of the iceberg as for your conflict.

Another problem exit’s where the trustees and beneficiary of record are working against the borrower with complete avoidance of the repurchase provisions show in the SEC master serving and filing documents. A UCC filing requirement under Rule 9 does not allow for a bilateral contract to compromise a third party unrelated to the contract.

Trustees and “beny” must record intervening assignments before the fact and properly disclose its transfer upon evidencing a recording. Therefore all conveyances from MERS will potentially fail and are voidable under a court ruling. Most non-agency securities sponsors show the lender at close is an undisclosed bank and the guarantor on the loan. The guarantor and the sponsors have no interest in the loans pending the mandate to repurchase the loan.

They cannot allow servicers to represent the lender where they only share a name or otherwise you have collusion. Improper disclosure issues are what allow a consumer to file suit for a rescission. With little effort NLS claims it can show the lender is not the beneficiary of record or the lender as many think. This revelation now brings into play the unlawfulness of a combination or affiliated business arrangement. RESPA regulatory requirements apply to transactions that may involve a loan on residential real estate. That is according to Jonathan A. Goodman, attorney for Frascona, Joiner, Goodman and Greenstein, P.C., Boulder, Colorado. The lawyer’s web site states it as follows “RESPA generally prohibits payment of referral fees, unearned fees or kickbacks, as well as the splitting or sharing of fees or charges made or received for providing "real estate settlement services."

SEC Vs. HUD

What this all comes down to is the mortgage backed securities structure used in a private placement violates a borrower rights under the loan master servicing and pooling agreements. It’s actually a consumer advantage for arguments sake disguised as a regulatory nightmare. But in the detail and legalese that looks like it was written in written in Greek is valuable substance for attorneys to make a case for relief under the threat of a lawsuit seeking to cancel their loan.

Again, what is important to know is the quagmire known as the mortgage mess consists of a card game with poker players who are highly exposed. These public companies, investment bankers and high net worth private investors are “dealing” and “wagering” under the watchful eye of the SEC. Soliman uses this example to point out the following

“now try to imagine high stakes game of poker being under strict rules of the players . . .no cheating! The players are the SEC and local town authority is the HUD. . . In other words the game is wrongful but none the less, played by the rules and behind the city's back!

All of this is something the government can’t get a handle on or does not want to become involved in. NLS is an authority on the subject of wrongful foreclosure and has received growing press coverage by national news organizations (Newsweek, CNN and MSNBC) over the internet.

It’s harder now to convince people of their rights with all the internet sites fighting for business in this new economy called stop foreclosure now, according to Soliman. NLS was warning of the coming meltdown and doing this work long before the market collapsed and was viewed then as a hardliner and critic dangerous to Mortgage Banking.

According to Soliman, “borrower loans that are in default or that are going into foreclosure continue without a fight. Borrowers need to get up top speed and realize that these loans can be rescinded”.

NLS staff offers 25 years in the biz and have served as industry analysts, bulk loan traders and purchase and sale underwriters on Wall Street. NLS have helped attorneys as expert witnesses and their clients on wrongful foreclosure matters for years. Their involvement includes many larger high profile cases such (particpating or study close up) of the SEC case for the AARP Vs Lehman Brothers; Pinn Fund USA Vs Government and cases such as CitiFinancial Corp which settled for $300 million after purchasing Associates and after only one year.

This Web site is specifically designed to review foreclosures and lender malpractice cases. NLS Nationwide Loan Services is a mortgage foreclosure legal research advisor to counsel.
You can file your claim with NLS who will opine and reccomend to counsel the merit for seeking a rescission. They also can provide an attorney to work with you.

Maher Soliman
Borrower Hotline