What is a securitization audit? Was my mortgage securitized? Will a securitization audit stop my foreclosure? Will a securitization audit help me get a modification with my servicer? Lets start with a few definitions. A securitization audit tracks what happened to your promissory note after you closed your loan. Thats right, if you have a MIN number on your deed of trust or on your mortgage document, your lender tricked you. First of all the word lender is probably a misnomer. Most of the time they just deposited your note at a federal reserve affiliated bank and cashed it, using new money to fund your mortgage transaction that they borrowed at a much lower interest rate than what they charged you. The difference in the interest they borrowed the money at and the rate on the face of your note is a yield spread. That is the difference in the interest payments over the thirty years that you would pay at say 7 or 8 % (just for example) and the payments that the note the fed generated at 3% is a yield premium of 5% over the life of your loan represents alot of money they made just cashing your note at the fed. The fed desired to do this to use your note to create money supply. It added money to the US economy. The money was never borrowed from your pretender lender. Then the depositor pooled a bunch of these loans, decided upon a trustee for what is called an RMBS or Real Estate Mortgage Backed securites pool, incorporated the pool, transferred all of the loans (they didnt really transfer them legally but that was the idea) to the investment bank who would sell pass through certificates (pool ownership interests) to investors.
They would buy an insurance policy (credit default swaps) on many if not most of these RMBS’s so that they could tell investors that their return was guaranteed and that way they could hoodwink Moody’s and Standard and Poors (the bond rating agencies) into giving the pools a triple A rating and this allowed the dirty rotten investment banks to sell this pile of garbage to municipal and corporate retirement programs.
A securitization audit purports to find the RMBS that your promissory note is in and do some detective work to see if the pooling and servicing agreement (which is part of the prospectus for the RMBS) requires that the note be signed or endorsed by each of the parties that the note passed through to get into the pool. Most of the time this will be the case. Then we look for whether or not the notes are endorsed. If not, legally the pool does not own your note. If the pool doesn’t own your note, do they have legal standing to substitute in a trustee in the land record? Are they legally allowed to foreclose on you? Even make an assignment? Of course not, see Horace v La Salle and GMAC v Ibanez. Look at the recent bankruptcy cases in New York.
So, another part of the securitization auditing process is to look in the land record at filings made by entities who are stepping up claiming to have standing to foreclose on you by virtue of their filings and describe the challenges the homeowner may be able to make as to the authenticity or potential fraudulent nature of these filings. Further, some securitization auditors keep a list of known potential robo-signers. These are individuals… go here to review what a roboo-signer is.. http://www.legalforensicauditors.com/2011/11/01/what-is-a-robo-signer-take-a-look/
Will type more later, gotta go to court.. BTW none of the above is legal advice, just the opinion of the author..