Subprime originators did not convey notes to securitization trusts!

[mooncliff]

This has been brewing for a while, but now it is entering actual legal proceedings.

Yves Smith said:
Testimony in a New Jersey bankruptcy court case provides proof of the scenario we’ve depicted on this blog since September, namely, that subprime originators, starting sometime in the 2004-2005 timeframe, if not earlier, stopped conveying note (the borrower IOU) to mortgage securitization trust as stipulated in the pooling and servicing agreement.
http://www.nakedcapitalism.com/2010/...on-trusts.html

Many other posts popping up rapidly. If there are lots of these, trusts may have to be unwound. Maybe this is another reason The Bernank is printing as fast as possible. I have seen guestimates that an unwinding would cost trillions of USD.

One of my friends said:
"On a real estate transaction... Countrywide ... failed to record on my unit."

Here is a summary diagram.
http://rortybomb.wordpress.com/2010/...helpful-chart/

If this is pervasive, then the question becomes
"Why did they do this on purpose?"
Did they do it just for short term gains?
Did they know that eventually it would be discovered that the notes were not conveyed and the trusts would blow up, and they wanted that to happen?
Some other reason?

[don]

Re: Subprime originators did not convey notes to securitization trusts!

the chart

[bill]

Re: Subprime originators did not convey notes to securitization trusts!

HA!
http://www.itulip.com/forums/showthr...21171#poststop

posted by bill 11-30-07
These securitized pool agreements have to state and appoint beneficiary powers to a designative representative (banks) representing the pool investors. I’m sure the banks hold such powers as trustee and have used them in the past but this time the court will not recognize it. The Banks hold Trustee powers in a foreclosure procedure that are granted from the beneficiary. The banks will need to return to the beneficiary of the notes and have them execute and grant powers to the trustee then proceed to foreclosure. This is a stall (freeze) tactic by our courts to not allow as in the past trustee foreclosure procedures.

11-30-07
The powers of foreclosure are in the hands of the beneficiary of the note. I think what happened these notes had beneficiary assignments recorded and that transferred the powers to a new beneficiary voiding the trustee powers of the banks(trustee). The note may have been assigned to a new beneficiary many times and the trustee will have to go back and have the current beneficiary grant foreclosure powers. What a note flipping mess.

11-30-07
The beneficiary ultimately holds the power. If it is multiple then follow the note assignments. Any side agreements do not hold powers of foreclosure they will just have to get in line at the foreclosure procedure.