Securitization Audits& Mortgage Lifecycle Research

Securitization is the transformation of debt into securities, called bonds or pass-through certificates, whose payments of principal and interest are derived from the payment streams generated by a pool of loans, such as mortgages.

Many people don’t realize it, but the first time a mortgage was securitized was in 1909, and over the following twenty years, until 1929, the securitization of mortgages become quite popular, until the extreme leverage of stock pools, combined with some financial manipulation and speculation by Goldman Sachs, led to the crash of 1929.

Sound familiar?  It should.  What we’re living through today is not exactly new, it has happened before.

After the market’s crash of 1929, we stopped creating such securities and the concept wasn’t put back into practice until the 1970s, with the Government-sponsored National Mortgage Association, and “Ginnie Mae pass through,” which remain popular among investors to this day.

Today, of course, computers have revolutionized how we think and work, and nowhere more spectacularly than on Wall Street.  Today, when we talk securitization we mean CDOs, or CMOs, or CLOs, or ABSes, or MBSes, or CDSes, or ABS of CDS, or synthetic CDOs, or CPDOs, or securitized notes of all variety, or ABCP conduits… alphabet soup, as far as most people are concerned.

But, at CDA Law Center, we understand the language of securitization.

Clearly, such financial innovation is a double-edged sword, but the fact is that the increased application of securitization and derivatives has, in large part, permitted capital and risk to be allocated more efficiently. Companies with access to more funds use the amounts to fuel growth and innovation, and as a result, the American economy benefits from gains in productivity.

However, during the last decade, moving at the speed of light, mortgages were securitized in record numbers, and in many cases the rules that govern the securitized pools of loans, and the laws governing the transfer of real property were ignored… and the result has become the basis for the emerging practice of law know as Foreclosure Defense.

Before securitization’s re-birth in the 1970s, a bank or Savings & Loan originated a mortgage and held it on their own books, often for the lifetime of the loan, but today’s securitized mortgages pass between different parties before reaching the securitized trust where they become the security for the sale of bonds and pass-through certificates that are bought by investors all over the world.

As one might imagine, there are a myriad of laws and regulations governing the transfers involved in the securitization process, and the fact is, during the recent real estate boom, many loan originators, commercial banks, and Wall Street investment bankers often failed to follow them.  When that’s the case, consumers are using the failure of bankers to follow the laws to push back against unfair treatment by turning to the courts and seeking equitable outcomes.

CDA Law Center can help you uncover your loan’s chain of title and securitization history, through our comprehensive Property Solutions Report, and should that report indicate that there is reason to dig deeper, we can arrange for a comprehensive Mortgage Lifecycle &Securitization Audit that is prepared by some of the most experienced forensic accountants, and Certified Fraud Examiners in the nation.

In your Property Solutions Report, you’ll find:

VALUATION SUMMARY – Your property’s approximate value, high, medium, and low, with a link to a full report, based on 35 AVMs with confidence score.

ANALYSIS SUMMARY – The loan modification workout solutions for your property – HAMP, Flex Mod, Cap Mod, I/O, et al.

VESTING INFORMATION – How you took ownership and whether the property has been moved into a trust, for example.

SUPPORTING DOCUMENTS – A link to the actual legal documents described in the report.

TAX INFORMATION – Shows if you owe any property taxes and if so, exactly what is owed.

ASSESSMENT INFORMATION – This section will show what the county is currently showing the property is worth and this figure is used to calculate the property’s tax basis.

MORTGAGE AND CREDIT INFORMATION – Here you will find Voluntary liens.  This section will include the mortgage/deed of trust depending on the state in which the property is recorded.

MERS – To determine if a MERS loan, check the Beneficiary/Lender… you may also find that it was assigned from the original lender to MERS check Assigned To:
This section is also vital in determining if the Notice of Default was recorded correctly. 

JUDGMENTS, LIENS, AND MISCELLANEOUS RECORDINGS – This section will show any involuntary liens.  Here you will find the Federal Tax Liens, HOA liens, Child Support, etc. 
This is important to pay attention to when processing a request for a modification or short sale.  For example, a property with a value of $185,000.00 that had a Federal Ta x Lien for $125,000.00 – this would definitely be considered by the bank in either modification or short sale.

MISCELLANEOUS NOTES – this section will show any notations that should be considered as it relates to title.

LEGAL DESCRIPTION – This is the “full legal description” of the property and is needed in recording any documents related to the property.

For more information on how CDA Law can help you uncover your mortgage’s history through its lifecycle, contact us at info@cdalawcenter.com.