A PSA (Public Service Announcement) aboutPSAs (Pooling and Servicing Agreements)
I recently saw a book review/ interview in which the author stated that Mortgage Backed Securities have been around since Mitt Romney's father, George Romney, was involved in one of the first mortgage backed securities. I was also reviewing HUD regulations and loan modifications and ran across modification programs in the early 1990's. Apparently, Mortgage Backed Securities have been around forever and are not necessarily the root of all evil.
At some point Mortgage Backed Securities became prevelant and dominated the finance of real estate transactions. Talking heads spoke of a housing bubble and the eventual bursting of the bubble. Those involved in Mortgage Backed Securities eventually invented financial products to protect themselves against the risk of the bubble bursting. Real Estate transactions began ocurring at a more rapid pace and less credit worthy individuals became involved in these transactions. As more information becomes available, more time is spent writing and talking about how we got here and who is to blame. If they are not casting blame, the articles discuss extreme measures that should be taken by Homeowners against Banks or Politicians. All of this adds to the collective "noise" that has allowed the Banks to continue to do wrong. The Banks' wrong was not the MBS or the financial items used to diminish the Banks' risks. The Banks' wrong which continues today is failing to take responsibility for their losses. When they were making money the Banks did not do things "by the book", "did not crosss their T's and dot their I's". Now the Banks are attempting to avoid the results of these failures. Robo-signing is really just the result of Banks trying to recreate or create numerous transactions that should have been done years ago. The banks created Trusts to hold mortgages and sold an interest in these trusts as certificates. However, these Trusts required the notes and mortgages to be transferred to the Trust within a very limited period of time. If these transfers did not occur within these strict time periods, then the assets were not properly transferred to the Trust. If the assets were not transferred to the Trust, then the Trustee can not bring suit on the note or foreclose upon the mortgage. Further, the Trust or Trustee can not subsequently transfer the note or mortgage to an investor or a Government Sponsored Entity; Fannie Mae, Freddie Mac. I strongly believe that Homeowners must engage counsel at an early stage. As soon as the complaint is filed a Homeowner should contact an attorney. Attorneys that do not regularly defend foreclosures should refer Homeowners to those attorney that do. In the last week I have filed a number of pleadings throughout Ohio, in which I argue that the Plaintiff Trust does not possess the Note or Mortgage, and that the Trustee can not seek to enforce a note or mortgage that is not an asset of the trust. I have relied upon the following authority to make this argument: 1. The Pooling and Servicing Agreement will set forth the governing law as the law of teh State of New York. 2. The New York Law of Estates, Powers, and Trusts, NY EPT LAW 7-2.4 *** any act of the Trustee in contravention of the Trust is void *** 3. I then provide provisions of the Pooling and Servicing Agreement which provide the manner in which the note and mortgage are to be transferred from the Originator to the Sponsor, to the Depositor, and then to the Trustee, 4. I then cite cases Horace vs. LaSalle Bank NA; Hendricks vs. US Bank NA; and Deutsche Bank National Trust Co. vs. Williams for the proposition that a Plaintiff that fails to comply with the Pooling and Servicing Agreement can not bring suit. These pleadings are currently pending in four different county courts of common pleas and a court of appeals. I will post the results as they occur. Should any attorney have additional authority or would like to discussthe matter in greater detail, please contact my office