SEC Civil Action VS Fannie and Freddie Execs

Six executives have been cited in a civil action by the SEC for understating risk in subprime mortgages. Once again, the SEC serves as pimp to the White House and the DOJ. Civil cases? More settlements "Without admitting or denying guilt?" Another Mozzilo-type "enforcement action? This SEC, this President, have done everything in their power to appear to have brought justice to the mortgage fraud scandal. In fact, they have failed miserably. 95% of criminal acts are now barred by the statute of limitations. Over 3 years of not prosecuting, and then, last week, the President said,"Wall Street did nothing illegal." Now the SEC hands up civil charges against the latest batch of scapegoats, and ignores the origination and securitization frauds which really caused the problems. Whether Fannie and Freddie misled the markets is one thing. Certainly there should be accountability for that. But the root causes, the worst players, the biggest origination and securitization crooks, have been, and will continue to be, let go. And, worst of all, there really has been no reform of the industry.

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MORTGAGE CRISIS

MORTGAGE CRISIS
Years back the banks began to turn a mortgage into a commodity, with good paying mortgages, then they saw they were running out of this commodity, so the big banks, including Fannie & Freddie started approving loans to almost anyone and everyone, not so much to just give that person a home to have, but they were more concerned about creating more of the commodity. More securities to sell to investors. They even knew some home owners would not last several years or several months, as long as they could say to investors, "Hey, we have more mortgage backed securities to sell”.

Now, to sell all these securities, they would have to create a mortgage assignment which is normally recorded with the county land recorders office for a fee. Physically, that would take up too much time and money, so the big banks invented and created MERS,(Mortgage Electronic Registration System). This electronic service was only created to track mortgages sold and bought in the secondary securities market. MERS legally has no invested interest in the mortgage, so they truly are not able to transfer or assign the mortgage acting as a nominee of the loan. But they are! Wrong. The chain of title of the mortgage is broken right here at this very early stage. The mortgage/note has to be assigned from one owning entity to the next owning entity. MERS never owns the loan, but they are creating and are listed on assignments at the local land recorders office. Now that the mortgage was bundled, sold and bought back and forth with investors, no continuing assignments are recorded with the county recorders office. By not recording these documents, Fannie & Freddie & and all your Big Mortgage Servicing banks are saving millions-billions on recording fees, and possible taxes, etc.

What I have found was that the Servicer of the mortgage is listed with the county recorders office as if they own the mortgage, while Fannie & Freddie or other Big Banks are selling the bundled mortgages as securities. Kind of like a Pizza shop cooking pizza legitimately up front, and a mobster selling off investments in the back. (Racketeering). The Servicer up front really is not the owner of the loan, and they tell you this. They also admit that your loan is owned by Freddy or Fannie, or the Investors. So when the Servicer now tries to foreclose on a homeowner, they are not truly the owner of the loan, and you have to own the loan to foreclose!!! Many never even question the Servicer and walk away from their home. Now to foreclose as quick as they can, that’s where the robosigners come in. These people do not review anything in the foreclosure paperwork about the loan, but only sign a name on the affidavit page on thousands of mortgages to get the foreclosure going before any homeowners begin to catch on.

You see, its a matter of a quick process the Servicing banks want to achieve in order to get the property in their possession, only to sell it. The crazy thing is, when the originating bank gives the loan, then sells it to the 2nd bank which mostly ends up being the servicer, they again sell it to the 2 major players (Freddie & Fannie) and they sell the mortgage back securities to investors. So the servicing bank gets paid for the mortgage and still collects payments toward the mortgage and a percentage goes to the Servicer, Fannie & Freddie and the Investor. So they are all making money. Then the Servicing bank comes to foreclose and if they are allowed to foreclose they get the home without true ownership, even though the loan is actually sold off into bits and pieces to investors. I can go on further, but to conclude, if this were a murder case, I would call this act of the banks premeditated, not an accident. This was all planned out in order to reach the highest profit they could using the mortgage backed securities as a commodity, and have total disregard, deliberately, intentionally ruining the lives of millions of homeowners.

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