Author: jmacklin

Control Fraud


Control Fraud

By: Jim Macklin
Secure Document Research

The term “control Fraud” was originally coined by Professor William Black, UMKC. A control fraud essentially starts as a core methodology for the exaction of some enterprise or movement, whether in commerce or at law. The instigators of a control fraud typically have their own self-interests as the motivation for participants to either ignore regulations or laws, or worse yet, to politically pressure or lobby for policy change that suits their agenda(s).

It mattered not that “liar loans”, defective underwriting processes, and securitization obviations were the norm during the run-up to 2008. The control fraud was in place to facilitate complete immunity from prosecution for the big money players at the top of Wall St. Every associated business that derived its income from the mortgage-backed bond sales was expected to follow the guidelines, as set by the fraudsters, or suffer the fate of not working. Everyone from bond insurers, hedge fund managers, realtors and property appraisers had to bend to the poisonous curve…or lose their competitive edge, and thus, their livelihood. When lying becomes the standard upon which your paycheck relies, you are a liar by proxy.

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Securitize This


Securitize This

By: Jim Macklin
Secure Document Research

In a recent article published, a staggering statistic was announced about the Gross Domestic Product (GDP) in the United States. Let me preface this by stating that twenty years ago, the financial services industry only contributed 16% of the GDP, while manufacturing, goods and services comprised the bulk of the GDP for the U.S. Meaning that goods were being manufactured, services were rendered and the economy is flourishing because of work product that actually produces something that is consumed, or services that are performed to promote the sale of goods. When money moves through the system, the system is healthy and grows. Conversely, when the system is stagnant and money stalls, the system tries to bury its head and consumers suffer all forms of malady.

Fast forward to today’s reality. The financial services industry now contributes 48% of our nations’ total GDP! Nearly half of what we are “worth” as a nation is derived from an intangible, non-product industry. Let’s examine the cause and effect of this crippling statistic. When Banks and lenders like Washington Mutual, World Savings, Countrywide and their ilk began using Wall St. profits from the sale of AAA rated mortgage-backed securities, then allegedly pooled them into REMIC Trust entities for reporting purposes, a dragon was released with an insatiable appetite for more, more, more.

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OUT OF HOUSE & HOME


OUT OF HOUSE & HOME

By Jim Macklin
Secure Document Research

Well, it has become official, Wall St. is now actively orchestrating the coup d’état. Major firms like Blackrock are setting up shop throughout major metropolitan areas of the U.S. with boots on the ground in an attempt to own and rent/lease properties back to the very souls from whom they stole in the last several years.

Pouring cash assets into the Net Lease Real Estate Investment Trusts seems like a sound business idea, except for one thing…the concept of owning real estate at this time for long term investment purposes does not align with the 20 year long term run-up of property values.

Remember this fact, the investment firms that are playing God with other people’s money don’t really care about the ROI for their investors, all they care about is selling positions or shares or certificates to the investment de jour. So if you invest $100 million in REIT’s but the long term projections for increased valuations of your portfolio have already reached the anticipated high, you are literally putting your money into a pool that pays you back for the use of the money, minus the fees in and out. Not to mention the fact that there is no possible way to project what a given administration’s policies will be in even 5 years. Tax treatments can, and often do, change.

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The 50 Yard Dash


The 50 Yard Dash

By Jim Macklin
Secure Document Research

Back in high school, we all had to run the short race that was a flat out sprint. More injuries occur in the shorter races than do in the races of duration for one simple reason…it places a higher impact on all muscles in the shortest amount of time, and with sometimes career ending results.

The recent run-up in housing prices, spurned by dog-fights at the auctions between private home buyers and investor money looking for another “bargain”, is a red herring. REO properties and direct sales in the short sale and traditional MLS (Multiple Listing Service) listings are now seeing one of the first signs of a healthier economy. Or so says the Real Estate industry. The numbers do not lie, however, there is a lot of activity to be sure, as compared to even one year ago, but this is a short race, so tape up and stretch.

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Strategic Debt Restructuring


Strategic Debt Restructuring

By: Jim Macklin
Secure Document Research

How many property owners in this country experienced the flush of “money for nothin’ and kicks for free” during the build-up to 2008? Champagne, boats, leisurely weekends at the lake all came part & parcel to those who were able and willing to leverage themselves at the urging of their local and national banks.

Obviously, those days were hazy and fast-paced for those caught up in the whirlwind of easy money provided by Wall St. and the MBS profits. I can still see the faces and attitudes of the mortgage brokers, loan officers and title company agents who were suddenly the darlings of the communities across the U.S.

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Irreconcilable Differences… I want a Mortgage Divorce!

Irreconcilable Differences… I want a Mortgage Divorce!

By James Macklin
Secure Document Research

Promissory Note Terms Vs. PSA/Prosectus Terms

When we are handed a voluminous stack of documents at the closing table for our mortgage transaction, a Borrower is expected to make a decision based upon the duty and care that the party who drafted these “investment contracts” has placed into them. However, none of us at the closing table has any idea what most of the words, phrases, and legal terminologies actually means… especially those affecting our rights as a consumer and as a real property owner.
Within the typical language of a Pooling and Servicing Agreement executed by the players of the securitization financing, there are countless references to the “interests” of the asset being conveyed, or, your Note and Deed. Interests are a finicky word of art used. The word simply means this: the asset, along with all of its’ benefits and liabilities. These are the “interests” being conveyed with the sale, set-over, transfer, conveyance, etc. So, under the terms of the Note we signed, look to the section titled: “Who is obligated under the Note” (usually sec. nine (9)). Here you will find that myriad entities may be, and probably are, also obligated under this same Note. These are the terms you have agreed to and bargained for. But the banking intermediaries would have us believe otherwise, as exhibited in the PSA under such language as: “The Depositor, Sponsor/Seller, Swap Counterparty, Master Servicer, Trustee do not intend for any obligation of themselves or their agents or employees to arise as a result of this Agreement”. This is contradictive to the terms and conditions that we have agreed to. Because the intervening assignments are a functional necessity to the bankruptcy remoteness of these assets, the specific substance of the PSA must be followed, including the mandate for the indorsement of each intervening assignment, along with the recordation of those assignment in the proper land title records office within the State of jurisdiction.
Let’s go back to the language of the “Who is Obligated” section of our Note. Notice that anyone who endorses the instrument is also obligated under the Note. Does this create an unknown Obligor at closing? If an un-named Beneficiary is the result of the unilateral agreement known as a Promissory Note”, how do we have the understanding necessary to execute such a critical document? It is the contention of this author, supported by the very agreements signed under oath and filed for record with the SEC, that “interests” and “obligations” are synonomous within the four corners of the agreement we signed…and the agreements signed by the intermediaries. A court of competent jurisdiction shall be posed these foundational questions very soon, and often. Are we a party to these agreements known as PSA/Prospectus? If we do a simple word search on each of these and look for references to: Borrower, Mortgagor, Obligor, we find these terms are typically used in excess of 60-75 times. Yet we were never disclosed the terms and conditions of the actual “loan” transaction as it truly was executed, and the rights, duties and responsibilities of the intermediaries. These are material disclosures relative to fees, expenses and various credit enhancements which are attributed to the Borrowers’ payment stream.
A divorce from this menagerie of deceit is not only appropriate, but a right that is being tried in many courtrooms. I believe that the judiciary will be tested on many platforms and small but visceral victories shall carry the day.

Fed Attempts to Re-Align Rescission Rights

The Fed has announced it’s intention to change the 3 year right of rescission that all homeowners currently enjoy.

Fed Attempts to Re-Align Rescission Rights

Jim Macklin
Secure Document Research

The Fed has announced it’s intention to change the 3 year right of rescission that all homeowners currently enjoy. This rule was implemented as a foundational protection of rights for home buyers who have been the victims of any number of consumer lending violations. It’s pretty simple: if a homeowner finds a violation of certain laws as it relates to the loan process, i.e.; a lender fails to disclose material information that might sway a loan decision by a home buyer, then the consumer has an extended period of three years in which to cancel the transaction. Under this scenario, the lender must either bring an action in court for declaratory relief which proves they are innocent of the wrongdoing, or they must refund the consumers’ money and the consumer may re-purchase the property through a different source of financing, or give up the property as a matter of equity.

The Fed, in its’ infinite wisdom, has decided that what’s best for the American economy is to make foreclosures even more airtight by eliminating this fundamental right to cancel. Of course, it is for our own good and the Nations’ best interests…right? I mean, if you did receive a predatory or improperly disclosed loan, you probably shouldn’t have any rights anyway because you really weren’t going to be making the payment, at least that’s what the Fed is pushing on Congress.

This is not only a bad policy, it is the epitomy of the Feds’ brash, Holier Than Thou attitude toward the consuming American Public. Whenever something is touted as being good for policy, or a “necessary measure” for re-gaining economic balance in the housing market, you can rest assured that your rights are being dragged through the dirt by an out of control, under-fed horse named the “ABA” (American Bankers Association).

Call or write your Representatives in Congress and scream long and loud for your rights, lest they be trounced. That’s how you wanted it…right?

Jim Macklin
Secure Document Research

Financial Control Fraud

Financial Control Fraud

By Jim Macklin
Secure Document Research

When a person or persons who own or oversee the operations of a seemingly legitimate business or Governmental Agency uses that business or agency as a “weapon”, it is known as a control fraud. The term was coined by UMKC Professor William Black (The Best Way To Rob A Bank Is To Own One, Black, 2005). The “weapon of choice” in a financial control fraud is accounting. More losses occur in financial control frauds than any other form of property crimes …combined!

In the early stages of our most recent financial crisis, the FBI had correctly identified the presence of the type of fraud, yet, the Bush administration failed to effect any real consequences, and so the fraud was swept under the rugs of the administrations’ offices. De-regulation and the advent of hyper-bonuses helped to encourage the practices of the ratings agencies, hedge fund managers, and CEO’s of the Wall Street elite, while the AAA rated “junk bonds” went out for sale with a frenzied push for more paper. Never before, in the history of Wall Street, had a AAA rated bond gone into a default. Remember, these ratings agencies hadn’t even bothered to sample the veracity or viability of the loan files upon which these ratings were issued. This is a control fraud in its’ simplest and purest form, with all of the key players indemnified against losses through trust agreements. This is the smoking gun.

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A Shot at the Title

The Title Companies are scrambling right now to try to verify the ability to have issued title insurance. After all, they sent the Notes and Deeds (allegedly) to the “lender” with a stamp of approval and clear title…right?

A Shot at the Title

By James Macklin
Secure Document Research

The Title Companies are scrambling right now to try to verify the ability to have issued title insurance.  After all, they sent the Notes and Deeds (allegedly) to the “lender” with a stamp of approval and clear title…right?

Along with the original mortgage loan file, these critical documents may evidence the beginning of the lack of disclosure that occurred in most of the loans written between 1999 and 2009.

Borrowers may want to contact the original title Company that handled their transaction and request a copy of the wire transfer of funds as received by the Title Company. Continue reading “A Shot at the Title”