Destroying mortgage docs part of standard operating procedure?

[dkf]

Anyone know if this is true and what the implications are?


http://www.democraticunderground.com/discuss/duboard.php?az=show_mesg&forum=389&topic_id=9290435&mesg_id=9290435

"But servicers don’t have the necessary documents, and they can’t get them. The Florida bank lobby says that destroying mortgage documents was standard operating procedure during the bubble years. If you can’t provide the documents, then in many cases, you simply do not have the right to foreclose at all. That means catastrophic losses for both safe investors and servicers, since they never get to recoup any losses."

[FreakinDJ]

1. Covering up the Mortgage Fruad

You also have to remember that in some states like California, and at the Federal level (US Attorney's office) they are currently investigating 1000s of mortgage originators. The SCAMMERs, the thieves in the Big Picture. The crooks who took "Used Car Financing Techniques" and applied them to Home Loans.

Sure the RATpubliCON Jack Asses in the House and Senate Deregulated an entire system of protections put in place after the Crash of 29, and the "Great Depression", but those crooks didn't fill out the paperwork or encourage needed Home owners to engage in fraud

[WillyT]

2. K & R !!!

:kick:

[me b zola]

3. K&R

[Fire1]

4. K&R

[WillyT]

5. Hey dkf...

Go Here: http://blogs.alternet.org/speakeasy/2010/10/06/organized-crime-wall-streets-foreclosure-fraud-machine/

Be sure to check out the hyperlinks.

:shrug:

:hi:

[WillyT]

7. Also...

Read the deposition here: http://4closurefraud.org/2010/10/07/exclusive-bombshell-of-foreclosure-fraud-full-deposition-of-tammie-lou-kapusta-law-office-of-david-j-stern/

:kick:

[dkf]

26. Makes the out of state notary seem like small potatoes indeed.

Thx

[flvegan]

6. I think they're talking about the loan origination docs, not the mortgage, note, etc.

In Florida, at least, "do not have the right to foreclose at all" is fairly limited to the Note and proof of ownership of the Note.

At least that's been my experience.

[dkf]

8. But the mortgage docs do exist?

Why is the origination paperwork necessary to the process?

[flvegan]

11. The mortgage is made of public record.

The Note is not. The Note is the most important document to the process. The origination paperwork wouldn't be unless the foreclosure became contested and the defense attorney demanded they produce it, alleging fraud or something along those lines. Then it would be up to the judge.

[SoCalDem]

9. These people were in the RISK business, and I'd be willing to bet

that mortgages were broken into pieces relating to the risk..for instance:

a variable rate interest only for the first 3 years before the interest re-set would be relatively LOW risk, so what if those first 3 years were broken off and sold for a higher rate..Perhaps year 4 though 6 were separated and packaged with a higher risk portfolio..and so on.. If the original paperwork was destroyed, there would be no way that anyone actually "owned" that mortgage.

I'm betting that there are gazillions of mortgages out there that were split into different risk pools and the people who did it, planned to skim off their fees & let others worry about the hot potato they passed on..

Most people do not ever really pay off a mortgage on a single home they plan to stay in forever, and as long as nefarious types were willing to keep on falsifying, the ponzi scheme could continue pretty much forever..especially since these companies kept buying each other & merging as they traded worthless mortgages between each other

[WillyT]

10. And You'd Be Correct...

That brings us to the investors. Mortgage-backed securities involve different levels of risk—investors don’t just buy one security composed of lots of mortgages. Instead, the pool of mortgages is cut into different pieces according to how risky they are. The riskiest bits fetch the highest monthly payments for investors, but are the first to take losses if the mortgages go bad. The safest parts bring in lower monthly payments, but are the last to take losses.

Investors who have the safe parts of the security want to see the foreclosure process burn through as fast as possible. The faster it goes, the lower the expenses for the servicer, and the more these investors will be able to recoup after foreclosure.

But investors who have the risky parts of the security have the exact opposite incentives. They want foreclosures stalled for as long as possible, so that the servicer has to keep forwarding them payments for as long as possible. The servicer doesn’t take its cut from the investors after foreclosure, it takes them from the sale of the house. So the risky investors (junior bondholders in finance-speak) are hoping to delay foreclosures, while the safer investors (senior bondholders) are hoping to stall for time, since time means more payments.

Link: http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=389x9290435

:kick:

:hi:

[dixiegrrrrl]

12. Thank you for that link.

Adding it to my collection of info.

[WillyT]

13. You Are Quite Welcome !!!

:bounce:

:hi:

[Yo_Mama]

27. No, not really

Securitized mortgages are first put in a pool which resides with a trustee.

The tranches that are sold off are payment rights to the proceeds from the pool, and many different tranches with different risk profiles can be created from the same pool and sold to investors. But this does not affect ownership. Ownership will reside with the trustees and the mortgage documents should have gone along with the mortgages when the mortgages were conveyed. The servicer can be a third party. Servicing rights on mortgages were also bought and sold. A servicer usually gets a cut of the interest.

The entire original file isn't transferred to the trustee is transferred - only what is legally necessary to show perfection of security and evidence the debt. The originator may have well destroyed some documents, but not the ones needed to perfect security or establish conveyance (that would include the note). However the servicer frequently may not have those docs - they'll be sitting in a vault somewhere.

There do appear to have been a lot of mistakes, but the mortgages (in Florida, the mortgage must be recorded within a year or it is void), the notes, and the documents showing the trail of ownership (assignments) should be in a vault. Or they could legally be imaged with some pretty strict controls and the images (if properly done) could be used to produce copies.

[kentuck]

14. That means they can asked to be bailed out on those...

which were "destroyed". Yeah, right!

[dkf]

15. Question is are Freddie and Fannie still obligated.

That is us after all.

[kentuck]

16. They shouldn't be..

But they will be. Yes, that is us.

[Statistical]

17. Fannie & Freddie hold roughly half of all mortgages.

So if this ends up being say a $500B problem you can expect $250B losses at F&F (paid for 100% by taxpayers).

[kentuck]

18. But were they not sold to Fannie and Freddie under false pretenses?

By these same banks? Fannie and Freddie were not told they were junk.

[Statistical]

19. Not sure that is going to fly...

In any debt sale the due diligence is upon the buyer to require any documentation the buyer believes will be necessary to service the debt.

Failure to do so and ensure they have a collectible claim is upon F&F. Now if the bank falsified documents then that would be different.

[kentuck]

20. They were fraudulent.

Is that the same as "false"?

There was article about this subject a few days ago? I don't have the link..

[Statistical]

21. Well in that case the taxpayers would be protected.

However I fear there are millions of loans where the paperwork is lost, incomplete,or wrong.

[dkf]

22. Is that the reason they destroyed the docs?

To prevent proof of fraud? Then what happens?

In retrospect maybe the bigger fraud is against the American Taxpayer.

[kentuck]

23. I think that is exactly what happened.

and that is why it happened.

[northernlights]

24. K&R

[WillyT]

25. Kick !!!

:kick: