Legal Standing At Inception

Legal Standing At Inception

By Daniel Edstrom
DTC Systems, Inc.

No I am not an attorney and no I am not providing legal advice.  This is the name of an article I just read posted on Neil Garfield’s LivingLies blog.  The article is from Mark Stopa, an attorney in Florida.  Read this article first and then come back and read my comments below: http://livinglies.wordpress.com/2011/12/19/legal-standing-at-inception/

When I saw the title, I thought awesome, they will go back to the origination of the loan.  But they went back to the time the judicial foreclosure case was filed.  This is a good argument and it should be fairly straight forward, or at least as straight forward as anything can be in a legal proceeding.  What I was looking for was what I heard this last week from somebody.  They went to bankruptcy court and told the judge that they had evidence that their loan was table funded, which means the named lender did not provide the money to fund the loan.  The money to fund the loan came from an unknown and undisclosed third party.  The bankruptcy judge made a simple statement.  The judge said that if the named originator did not fund the loan, then they have nothing to transfer, and the movant in the motion for relief from stay (the bank) would therefore have nothing.  This judge understands that the note is only evidence of the obligation, it is not the actual obligation.  Transfer of the note or the security instrument (Mortgage, Deed of Trust, Security Deed or Mortgage Deed) without an interest in the obligation itself, is meaningless.  That is the type of standing issue that I would like to see attorneys make in all states.

Is this why under Regulation “Z” table funded loans have the presumption of being predatory?

Just When You Thought You Knew Something About Mortgage Securitizations

Dan Edstrom is a guy who is in the right place at the right time. His profession? He performs securitization audits (Reverse Engineering and Failure Analysis) for a company called DTC-Systems.

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Just When You Thought You Knew Something About Mortgage Securitizations

by williambanzai7

Dan Edstrom is a guy who is in the right place at the right time.

His profession? He performs securitization audits (Reverse Engineering and Failure Analysis) for a company called DTC-Systems.

The typical audit includes numerous diagrams including the following:

  1. Transaction Parties and Flow (similar to the chart below, but much easier to understand)
  2. Note exchanged for a bond Foreclosure parties
  3. Priority of Payments from the Security Instrument (Mortgage, Deed of Trust, Security Deed or Mortgage Deed)
  4. Priority of Payments from the Pooling and Servicing Agreement

This diagram shows that they are not following the borrowers instructions in the security instrument Continue reading “Just When You Thought You Knew Something About Mortgage Securitizations”