Foreclosure Expert Confirms Mortgages Pledged Multiple Times, Not Actually Securitized, Document Problem Is Really a System of "Push-Button Fraud"
Yesterday, I showed that mortgages were fraudulently pledged to multiple buyers at the same time.
Today, foreclosure expert Neil Garfield (former investment banker, trial lawyer and board member of several financial institutions) confirms
this, explains that the loans were not actually securitized, and the
whole "sloppy paperwork" excuse is really an attempt to explain away a
system of push-button fraud:
The game was to move
money under a scheme of deceit and fraud. First sell the bonds and
collect the money into a pool. Second take your fees, third take what’s
left and get it committed into “loans” (which were in actuality
securities) sold to homeowners under the same false pretenses as the
bonds were sold to investors. By controlling the flow of funds and
documentation, the middlemen were able to sell, pledge and otherwise
trade off the flow of receivables several times over — a necessary
complexity not only for the profit it generated, but to make it far more
difficult for anyone to track the footprints in the sand.
If the loans had actually been securitized, the issue would not arise. They were not securitized. This
was a mass illusion or hallucination induced by Wall Street spiking the
punch bowl. The gap (second tier yield spread premium) created between
the amount of money funded by investors and the amount of money actually
deployed into “loans” was so large that it could not be justified as
fees. It was profit on sale from the aggregator to the “trust” (special
purpose vehicle). It was undisclosed, deceitful and fraudulent.
the “credit enhancement” scenario with tranches, credit default swaps
and insurance had to be created so that it appeared that the gap was
covered. But that could only work if
the parties to those contracts claimed to have the loans. And since
multiple parties were making the same claim in these side contracts and
guarantees, counter-party agreements etc. the actual documents could not
be allowed to appear nor even be created unless and until it was the
end of the road in an evidential hearing in court. They used when
necessary “copies” that were in fact fabricated (counterfeited) as
needed to suit the occasion. You end up with lawyers arriving in
court with the “original” note signed in blue (for the desired effect on
the Judge) when it was signed in black — but the lawyer didn’t know
that. The actual original is either destroyed (see Katherine Porter’s
2007 study) or “lost.” In this case “lost” doesn’t mean really lost. It
means that if they really must come up with something they will call an
original they will do so.
So the reason why the paperwork is all
out of order is that there was no paperwork. There only entries on
databases and spreadsheets. The
loans were not in actuality assigned to any one particular trust or any
one particular bond or any one particular individual or group of
investors. They were “allocated” as receivables multiple times to
multiple parties usually to an extent in excess of the nominal
receivable itself. This is why the servicers keep paying on loans
that are being declared in default. The essential component of every
loan that was never revealed to either the lenders (investors) nor the
borrowers (homeowner/investors) was the addition of co-obligors and
terms that neither the investor nor the borrower knew anything about.
The “insurance” and other enhancements were actually cover for the
intermediaries who had no money at risk in the loans, but for the
potential liability for defrauding the lenders and borrowers.
The result, as anyone can plainly see, is that the typical Ponzi outcome — heads I win, tails you lose.
the paperwork was carefully created and crafted to cover the tracks of
theft. Most of the securitization paperwork remains buried such that it
takes search services to reach any of them. The documents that were
needed to record title and encumbrances was finessed so that they could
keep their options open when someone made demand for actual proof. The
documents were not messed up and neither was the processing. They were
just keeping their options open, so like the salad oil scandal, they
could fill the tank that someone wanted to look into.
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