Posted by mortgagelies in Uncategorized.
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Securitization offers a highly profitable efficient and vulnerable opportunity that suffers in an economic downturn. Its unique financial structure is subject to a controversial opportunity that requires a realistic view of the cost to benefits afforded to the lender and registrant. Its upside is measured by certain rules and criterion that may outweigh the risks of lenders incurring an impossible outcome when pursuing claims for the beneficial interest and rights to a foreclosure.

Therefore how can the defendant be assured that the Plaintiff in a foreclosure has standing? The law holds that before an entity assigned an interest in a property is entitled to receive a distribution from the sale of a property their interest in that property must have been recorded in accordance with the law.

A court must request the proper clarification requiring each plaintiff to submit a copy of the assignment of the collateral

The assignment in each instance must be in under sufficient consideration on the date the assignment was signed and notororized.

Deviations and discrepancies found in filing and recording information indicate a misleading and fraudulent effort to satisfy the above requisites for showing proper standing.

The court must have in its possession sufficient evidence of having maintained not all but perhaps even a majority of the beneficiary’s rights deemed to make enforceable the deed of trust.


The lender will sell the loans it has originated and effect a lawful transfer’s upon releasing all its beneficial rights and interest in the pool. This is a mandated accounting prerequisite for ensuring a proper delivery into a trust investment. A seller is compelled to maintain the integrity needed for transfer under GAAP and for derecognition. A better way to think about this is to consider the holder in due course holds the note. And upon sale of the loan a lender will lose for ever its rights once subject to the terms and conditions contained within the note. ‘


A bonefide sale is defined under the revisions of FAS 140-3 which is the criterion that IS necessary to effects a breach and will condition a claim or deceptive practices and constitute a fraud. Therein an inquiry and claim into servicing violations may be warranted under 1122 AB and from inquiries by the Securities and Exchange Commissions. How does a lender and seller maintain economic survival and allow it self to lose all controlling aspects of the assets after the sale? It uses the servicing agent to effect a series if clandestine and secretive financing arrangements and shall employ a variety of deceptive, methods used to circumvent losses. In other words, a loss of control over performance or controlling influence over the loans sold is condition precedent for gain on sale and recognition purposes.

Otherwise, the benefits in line with securitization become lost and subject to serious recognition issues. An example is where the assets sold are subject to having become classified as debt and any benefits from the sale upon transfer become moot.

A clear understanding for this Seller Servicer and Trust relationship is paramount for pre-litigation responses and for demanding the parties demonstrate their standing prior to filing for foreclosure.

Retained under other delivery methods traditional agency mortgage banking assumptions. Therefore the transfer is considered a bona fide sale.

The registrant is the Depositor or primary parties of interest in the pool sold and transferred. When delivering a bulk pool of assets the transfer is subject to a no recourse understanding (see FAS 140 for release of controlling interest) and acknowledge by parties as found in published investment materials (i.e. prospectus and or trust indenture).

Whereby the seller has limited its complete liability for default, the investment trust as the purchaser will maintain separate servicing and collection agreements. Recourse is enforceable and available to the trustee under a separate arms length servicing contract provider. This enforces a repurchase commitment upon the servicer for any single asset determined to be a likely default under the underwriting and servicing criterion for classifying assets and determining impairment.

Structured financing endures a significant burden of stress and vulnerability when a percentage of delinquency and default exceeds the threshold as set by the indenture.

Triggers for a repurchase and right to replacement are made subsequent to notice by a servicer for likelihood of any single loan considered ineligible under the terms and conditions for the bulk sale. A determination for declining asset quality may trigger if upon reaching a cap or upon a twenty percent mark (ratio to total assets) and trigger suspension or even liquidation of the assets. Such drastic and desperate responses are mandated by the trust department and trustee whereby the matter is absent any recourse provision as to the seller’s representations and warranties of the seller.

Whereby one may assume a breakdown in the structure is evident upon a twenty percent mark, the servicer is afforded a simple yet highly dangerous means to circumvent loss through “culling” or replacement of “spot” dollar for dollar assets. A purchases and right to replacement option allows the servicer to retune a like a similar loan to a pool before a term or other deadline criterion.

Servicers assumed right to identify asset impairment and honor claims for a repurchases are none the less void of any seller obligation for settling a problem delinquency.


One thought on “

  1. corina says:

    can the bank send you a 3 day notice to quit , before they can tell you if you qualify for a modification. give you three days to move out.

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