FREDDIE (MAC) IS FHUKED
Ray Elliott
The almost daily barrage of news releases stating that this or that attorney general is "on board" with accepting an agreement (blanket amnesty) with the banks is similar to the daily "we solved the problem" with Greece. Compared to the bank's problems, Greece is no more than the question of who pays for lunch. The reason that the banks are desperately seeking an amnesty is that they are looking into a very deep, black abyss. The abyss is Freddie Mac (and Fannie) who have come to the realization that they have no assets. That is correct, no assets. You might say, don't they have my mortgage and note? No, they do not. You think that they do, they let you think that they do, but they don't.
Why don't they have your promissory note and your deed of trust? Because they were set up by the bankers and the bankers didn't think they needed the documents. What?? Didn't need them? Why wouldn't they need the two most important documents in the history of real estate ownership? Because the bankers had a better idea. The bankers didn't want to pay the county recorders the fees that were due when a sale occurred. They had this great idea that if they set up a "straw man" to represent the real ownership, any transfers didn't have to be paid to the county recorders because it would always be in the name of the "straw man". The straw man was called MERS. MERS is the acronym for Mortgage Electronic Registration Systems, Inc. If you have a mortgage, look at the first page and it will say, "MERS is a separate corporation that is acting solely as a nominee for Lender and Lender's successors and assigns. MERS is the mortgagee under this Security Instrument."
After creating this monster, the bankers decided that they had eliminated the need for paperwork. Freddie discouraged the bankers from sending in the notes or the mortgages that the banks sold to Freddie. Freddie didn't think that they needed them. Some of the selling banks simply threw them away. Some kept the original notes in their files. The problem with this is that in order for a legal transaction to occur, the notes and the mortgages had to be in the physical possession of the buyer (Freddie Mac or Fannie Mae). Freddie and Fannie had great years bundling these mortgages into Mortgage Backed Securities (MBS) and they were sold to almost every pension plan in the world. Everybody was happy because everybody knew that real estate was always going to go up.
But it didn't. When it started to go down, and some defaults began to occur, Freddie and Fannie had a big problem. The banks that were servicing the loans (collecting the payments) wanted to foreclose on the homeowners. Freddie and Fannie realized that they could not convey ownership (assignment) to the servicer banks (which would allow the banks to foreclose) because Freddie and Fannie did not have any ownership to convey. They had failed to consummate the purchase of the loans by not originally taking possession of the mortgages and the notes. Making matters worse, the MBS buyers had tax free trusts that required the loan transfers into the trusts to occur within 90 days of the transaction. Transferring a loan several years later (or even 120 days later) would eliminate the tax free status of the trusts.
Matters became much worse. The servicing banks finally realized that the straw man (MERS) was their only hope. They began creating assignments to themselves from the straw man (MERS). The problem was, MERS did not have a beneficial interest to convey. You may ask, who were they conveying from? The MERS assignments didn't say who they were assigning from. Freddie and Fannie (who provided the money for the original purchase) had no beneficial interest to convey.
Obama to the rescue. Obama realizes that this sh**storm is about to fall on him. He has this great idea. He will save the banks. Wait. That's not what he said. He said he was going to help all those desperate people that had trouble with their mortgage payments and would provide a $1,800 payment to those that had lost their home to foreclosure. This is the grand schemer to have the state's Attorney General's give a blanket amnesty to the banksters that have forged all those assignments. The homeowner's would have to sign a document that would let Freddie, Fannie and the banksters off the hook. If a modification in their loan is created, the new loan would definitely be recorded in the county recorder's office (and the homeowner gives up his rights to sue).
Sounds great doesn't it. Everybody is off the hook. The problem is that an enormous fraud has been inflicted on the American homeowner. He should not accept $1,800 dollars from Obama and give up his home. He should not sign off on his rights.
Where does this leave us? Sixty two million Freddie and Fannie home loans are uncollectible. The incompetent fools that created this gigantic mess have not been prosecuted or even investigated.
3 February 2012
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