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.

Continue reading “Strategic Debt Restructuring”

Full Day CLE Workshop Seminar: New Tools & Strategies for Distressed Homeowners

Full Day CLE Workshop Seminar: New Tools & Strategies for Distressed Homeowners

By Daniel Edstrom
DTC Systems, Inc.

8/25/2012 – Emeryville, CA – Full Day CLE Workshop Seminar: New Tools & Strategies for Distressed Homeowners

August 25th, 2012 – in San Francisco, California

Venue is the Hyatt House in Emeryville, CA http://emeryville.house.hyatt.com

This workshop has been approved for Minimum Continuing Legal Education (MCLE) by the State Bar of California. Total credit hours approved are 6.75 hours.

SECURE DOCUMENT RESEARCH<br>Auburn, CA 95603; ph: 530.888.9600

DTC Systems, Inc.

[email protected]

http://www.dtc-systems.net

Presented by:
Secure Document Research and DTC Systems, Inc.

http://www.dtc-systems.net

in Association with the Garfield Continuum and Neil F. Garfield, Esq. http://livinglies.wordpress.com

Visit us at http://www.dtc-systems.net

If you have any problems paying for this event, you can also pay by sending PayPal payments directly to [email protected]

Problems Registering? Call 530.888.9600

Presented by:
Secure Document Research and DTC Systems, Inc. in Association with the Garfield Continuum and Neil F. Garfield, Esq.
REGISTER EARLY, LIMITED SEATING IS AVAILABLE

Workshop Information
This is a comprehensive 1-day workshop CLE seminar for lawyers and paralegals: Deny and Discover: New Tools & Strategies for Distressed Homeowners

This workshop has been approved for Minimum Continuing Legal Education (MCLE) by the State Bar of California. Total credit hours approved are 6.75 hours.

Speakers:

1. James Macklin

Owner of Secure Document Research providing Securitization Research and Analysis. While working briefly within the securities industry, Mr Macklin has been focused on the study of economics and macro-economics for over fifteen years, gathering professional insight into Generally Accepted Accounting Principles, Financial Accounting Standards, business ethics, securitization and the effects of “Control Fraud” (William Black, Professor; U.M.K.C.,) on market analysis. Mr. Macklin is now committed to the education, en mass, of the legal industry as a tool for the protection of rights of the under-sophisticated investing and borrowing public at large. James Macklin has over 10,000 hours of research into Securitization, Title and Publicly Recorded Instruments.
[email protected]

2. Daniel Edstrom

President of DTC Systems, Inc, having been in Information Technology for the last 18 years as a Systems Architect and Software Architect.The transformation of complex business requirements to complex Wall Street Engineering was an easy one. Securitization Expert, Daniel Edstrom analyzes complex financial engineering securitization transactions as well as providing a failure analysis, with well over 10,000 hours of research into Securitization and Title. Besides working for his own company, Daniel is a Senior Securitization Analyst for the Garfield Firm (www.garfieldfirm.com). [email protected]

3. Neil Garfield

Neil F. Garfield, M.B.A., J.D., 61, is the winner of dozens of academic awards, a popular speaker, and author of technical treatises on law and economics. He has come out of retirement with a bang and financial institutions should take note. He knows them from the inside-out, who the deciders are, and how they arrived at a catastrophic scheme to defraud people, agencies, institutions and governments all over the world. For more information on Neil Garfield visit his website at www.livinglies.wordpress.com

4. Daniel Hanecak

Daniel Hanecak, B.A. J.D., will be speaking on motion practice and recent court experience. Mr. Hanecak is licensed in California and specializes in complex real property litigation. Mr. Hanecak is currently representing homeowners against banks and mortgage servicers for fraud and wrongful foreclosure.

*Both James Macklin and Daniel Edstrom are not attorneys.

THIS WORKSHOP AND/OR ANY MATERIALS DISTRIBUTED AT THE WORKSHOP IS NO SUBSTITUTE FOR LEGAL ADVICE FROM LOCAL COUNSEL LICENSED TO PRACTICE IN THE COUNTY AND STATE WHERE THE SUBJECT PROPERTY IS LOCATED. The information presented is for general information for you to understand the current context of foreclosures and to enable you to ask relevant questions of an attorney of your choosing. Any opinions presented here, along with facts, cases, examples or arguments, may not apply to your case. You should consult with local licensed counsel before employing them.

Venue:

Venue is the Hyatt House in Emeryville, CA

http://emeryville.house.hyatt.com

Registration:
Pre-Registration is required and can be done on this website or over the phone at 530.888.9600, with payment by PayPal to [email protected]. Tickets will be emailed after payment is completed.

Pricing:
$497.00 for the one day workshop.

This workshop has been approved for Minimum Continuing Legal Education (MCLE) by the State Bar of California. Total credit hours approved are 6.75 hours.

Workshop Agenda

8:30–9:15 Introduction: James Macklin / Daniel Edstrom

9:15–10:00 The Securitization Process and Chain of Title: James Macklin

10:00–10:15 Morning Break

10:15–11:00 Prospectus, Pooling/Servicing and Trust Agreements: James Macklin

11:00–11:45 Discovery / Procedure: Neil F. Garfield, J.D., M.B.A.

11:45 to 1:00 Lunch

1:00–1:45 Proprietary Currency, Appraisals and Ratings: Neil F. Garfield, J.D., M.B.A.

1:45–2:30 Law and Motion Practice / Recent Courtroom Experience: Daniel Hanecak, Esq.

2:30–2:45 Afternoon Break

2:45–3:30 Credit Enhancements in Action: Daniel Edstrom

3:30–4:15 Panel Q&A

** Schedule subject to change without notice **

GMAC Residential Capital Lists 200-999 Creditors, Failing to Disclose Tens of Thousands of Homeowner Claims

GMAC Residential Capital Lists 200-999 Creditors, Failing to Disclose Tens of Thousands of Homeowner Claims

By Daniel Edstrom
DTC Systems, Inc.

Note that the original article has been updated to fix my mistake of showing 299 creditors when the number of creditors listed on the Voluntary Petition was 200-999. On April 13, 2011 the Board of Governors of the Federal Reserve System and the Federal Deposit Insurance Corporation issued a Cease and Desist Consent Order against Ally Financial Inc. fka GMAC LLC, Ally Bank fka GMAC Bank, Residential Capital LLC (and its direct and indirect subsidiaries) and GMAC Mortgage LLC. During the period of 1/1/2009 to 12/31/2010, the Mortgage Servicing Companies completed 89,998 foreclosure actions, representing less than 4 percent of the Servicing Portfolio over such such time period. View the attached Voluntary Petition below to see the number of creditors identified. The regulators found the following:

WHEREAS, in connection with the process leading to certain foreclosures involving the Servicing Portfolio, the Mortgage Servicing Companies allegedly:

Filed or caused to be filed in state courts and in connection with bankruptcy proceedings in federal courts numerous affidavits executed by employees of the Mortgage Servicing Companies or employees of third-party providers making various assertions, such as the ownership of the mortgage note and mortgage, the amount of principal and interest due, and the fees and expenses chargeable to the borrower, in which the affiant represented that the assertions in the affidavit were made based on personal knowledge or based on a review by the affiant of the relevant books and records, when, in many cases, they were not based on such knowledge or review;

Filed or caused to be filed in courts in various states and in connection with bankruptcy proceedings in federal courts or in the local land record offices, numerous affidavits and other mortgage-related documents that were not properly notarized, including those not signed or affirmed in the presence of a notary;

Litigated foreclosure and bankruptcy proceedings and initiated non-judicial foreclosures without always confirming that documentation of ownership was in order at the appropriate time, including confirming that the promissory note and mortgage document were properly endorsed or assigned and, if necessary, in the possession of the appropriate party;

Failed to respond in a sufficient and timely manner to the increased level of foreclosures by increasing financial, staffing, and managerial resources to ensure that the Mortgage Servicing Companies adequately handled the foreclosure process; and failed to respond in a sufficient and timely manner to the increased level of Loss Mitigation Activities to ensure timely, effective and efficient communication with borrowers with respect to Loss Mitigation Activities and foreclosure activities; and

Failed to have adequate internal controls, policies and procedures, compliance risk management, internal audit, training, and oversight of the foreclosure process, including sufficient oversight of outside counsel and other third-party providers handling foreclosure-related services with respect to the Servicing Portfolio. Continue reading “GMAC Residential Capital Lists 200-999 Creditors, Failing to Disclose Tens of Thousands of Homeowner Claims”

GMAC Residential Capital Declares Bankruptcy

GMAC Residential Capital Declares Bankruptcy

By Daniel Edstrom
DTC Systems, Inc.

According to Residential Funding Corporation, GMAC was one of the largest entities securitizing loans in 2000. This bankruptcy probably has an impact on nearly every single GMAC based loan or loan that was securitized by GMAC. Many of the GMAC deals pledged the loans to the trusts but never actually perfected the transfer. This could mean that your “lender”, “creditor” or “owner” of these loans is one of the many related entities of Residential Capital (RESCAP) – which may be a problem because they have probably been paid in full. Many of these entities had a security interest in the money advanced to fund the loans, even though they were not the named lender. Many of these entities were required and obligated to make payments on the borrowers loans – and they did in fact make payments. Many of these entities had guarantee agreements with other parties (such as servicers) to reimburse them for payments of principal and interest made on borrowers loans.

Here is the list of related entities RESCAP is attempting to consolidate into one bankruptcy:

ditech, LLC

DOA Holding Properties, LLC

DOA Properties IX (Lots-Other), LLC

EPRE LLC Equity Investment I, LLC

ETS of Virginia, Inc.

ETS of Washington, Inc. Continue reading “GMAC Residential Capital Declares Bankruptcy”

The OCC Misses the Point on Toxic Waste

The OCC Misses the Point on Toxic Waste

By Daniel Edstrom
DTC Systems, Inc.
http://www.dtc-systems.net

We all see what we want to see. But when others control the conversation, it is easy to miss the point. As a regulator the Office of the Comptroller of the Currency should be taking the lead and controlling the conversation, but in reality, they have been bridled and are being led around by the nose. Conspiciously absent are numerous issues they as a regulator have the responsibility of dealing with. This article is timely in response to an article by Neil F. Garfield (http://livinglies.wordpress.com/2011/12/27/the-big-lie-banks-did-nothing-illegal/), which is a response to Yves Smith of Naked Capitalism article (http://www.nakedcapitalism.com/2011/12/more-msm-criticism-of-obama-nothing-illegal-here-move-along-stance-on-foreclosure-fraud.html), which is a response to a Reuters article (http://www.reuters.com/article/2011/12/22/us-foreclosures-idUSTRE7BL0MC20111222). But I found none of these articles until I was finished writing this post. Take the following random and critical issues:

Are the loans in the pool? Were the loans ever in the pool? Does the pool exist? Did the pool perfect interest in any of the loans? This issue is very political and the OCC in our opinion will never address this issue or look into this.
What loans are in default? Can a loan be in default? What comes first, the default or the loss?
Are there any compliance issues?

Continue reading “The OCC Misses the Point on Toxic Waste”

Ohio Supreme Court Certifies Questions Regarding GMAC Robo-signing Issues and Ohio Consumer Sales Practices Act

Ohio Supreme Court Certifies Questions Regarding GMAC Robo-signing Issues and Ohio Consumer Sales Practices Act

By Daniel Edstrom
DTC Systems, Inc.

On August 24, 2011, the Ohio Supreme Court agreed to hear the following questions:

MOTION AND PROCEDURAL RULING

On review of preliminary memoranda pursuant to S.Ct.Prac.R. 18.6. The court will answer the following questions:

1. “Does the servicing of a borrower’s residential mortgage loan constitute a `consumer transaction’ as defined in the Ohio Consumer Sales Practices Act., R.C. 1345.01(A)?”

2. “Does the prosecution of a foreclosure action by a mortgage servicer constitute a `consumer transaction’ as defined in the Ohio Consumer Sales Practices Act., R.C. 1345.01(A)?”

3. “Is an entity that services a residential mortgage loan, and prosecutes a foreclosure action, a `supplier . . . engaged in the business of effecting or soliciting consumer transactions’ as defined in the Ohio Consumer Sales Practices Act., R.C. 1345.01(C)?'”

O’DONNELL, J., dissents.

Ruling: http://dtc-systems.net/wp-content/uploads/2011/12/State-ex-rel-DeWine-v.-GMAC-Mtge-LLC.pdf

Presentation regarding Mortgage Servicing Origination and Foreclosure Issues: http://dtc-systems.net/wp-content/uploads/2011/12/08-Mortgage-Servicing-Origination-and-Foreclosure-Issues-Jeff-Loeser-presentation.pdf

LAWYERS CLE WORKSHOP ON FORECLOSURE DEFENSE AND OFFENSE

LAWYERS CLE WORKSHOP ON FORECLOSURE DEFENSE AND OFFENSE

April 30 to May 1, 2011 – in Phoenix, Arizona

Venue is to be determined

Understanding the Governing Documents 1

Understanding the Governing Documents 1

by Daniel Edstrom

Wall Street financial engineering is a thing to behold. Of course most of it is in complex legal terms difficult to comprehend. Let’s take a look at a few definitions in a Prospectus Supplement and break them down. This is from the RASC Series 2005-EMX4 Trust put out by GMAC.

Subordination. So long as the Class M Certificates remain outstanding, losses on the mortgage loans which are not covered by amounts payable under excess cash flow or overcollateralization will be allocated to the Class M Certificates that remain outstanding with the lowest payment priority, and the other classes of certificates will not bear any portion of such losses. If none of the Class M Certificates are outstanding, all such losses will be allocated to the Class A Certificates as described in this prospectus supplement.

What this means: Numerous classes of certificates are issued. In this trust the Class A certificates are paid in priority first while any losses first come out of the Class M certificates. Once the Class A certificates principal is paid in full, the principal is applied to the Class M certificates. Once the Class M certificates absorb all losses and the principal is reduced to zero, the Class A certificates will suffer losses. The diagram to the left shows what this looks like. Is there a loss? Only if the loss is not covered by “amounts payable under excess cash flow” or “overcollateralization.”

DEBT SERVICE REDUCTION–Modifications of the terms of a mortgage loan resulting from a bankruptcy proceeding, including a reduction in the amount of the monthly payment on the related mortgage loan, but not any permanent forgiveness of principal.

What this means: A reduction in the monthly payment based on a bankruptcy ruling but not including any permanent principal forgiveness. This doesn’t mean much at the moment but we will revisit this shortly.

Realized Loss–As to any defaulted mortgage loan that is finally liquidated the portion of the Stated Principal Balance plus accrued and unpaid interest remaining after application of all amounts recovered, net of amounts reimbursable to the master servicer for related Advances, Servicing Advances and other expenses, towards interest and principal owing on the mortgage loan. For a mortgage loan the principal balance of which has been reduced in connection with bankruptcy proceedings, the amount of the reduction. As to any mortgage loan that has been the subject of a Debt Service Reduction, the amount of the reduction. For a mortgage loan that has been modified, following a default or if a default was reasonably foreseeable, the amount of principal that has been forgiven, the amount by which a monthly payment has been reduced due to a reduction of the interest rate, and any Servicing Advances that are forgiven and reimbursable to the master servicer or servicer. To the extent the master servicer receives Subsequent Recoveries with respect to any mortgage loan, the amount of the Realized Loss with respect to that mortgage loan will be reduced to the extent such recoveries are received.

What this means: This is part of the Wall Street engineering genius that is difficult to understand. Basically what it is saying is that despite what you might believe, despite what a judge rules in bankruptcy, and despite the fact that a loan modification has been applied to a loan, the investors receive the original payment of principal and interest. Even after a ruling by a standing bankruptcy judge the investors receive the original principal and interest based upon the original note (or at least the copy of the note allegedly pooled into the trust). One can only imagine the book-keeping nightmares that servicers face keeping multiple sets of books and trying to keep them all straight. This is my best guess as to why the servicers have such a hard time keeping the accounting straight for those in bankruptcy. Just ask O. Max Gardner III how often the servicers mess up bankruptcy rulings.

Read all of the above again. Even if the principal and interest payment are reduced in bankruptcy, the servicer is required to advance the principal and interest of the original mortgage loan as amortized. Once the loan is liquidated (paid off), the principal loss is calculated at that time and advances which have not been paid by other forms of credit enhancements are paid back to the advancing party. THE INVESTORS GET THEIR MONEY during the course of the loan (whether or not paid by the homeowners), then it gets ripped out of their hands all at once when the loss is calculated. But you never know for sure whether the investors will actually suffer a loss or if the credit enhancements will pay for it. This is one of many reasons why the homeowner is entitled to a full accounting.

Bankruptcy judges be warned: Wall Street takes your rulings with a grain of salt and applies them in their own fashion. This can only stem from multiple sets of books that are concealed, misrepresented and not disclosed to the courts.

Disclaimer Reminder: This is a blog for educational and informational use only and does not constitute legal advice. Take no action without first consulting an attorney in your jurisdiction.

Securitization: What is it?

The idea behind securitization is that a lender can make a loan and immediately sell the loan so that their capital is not tied up for 30 years. In reality it doesn’t quite work this way.

The idea behind securitization is that a lender can make a loan and immediately sell the loan so that their capital is not tied up for 30 years. In reality it doesn’t quite work this way.

In the classic securitization example, a company that originates loans sets up an agreement with a warehouse lender (GMAC, Morgan Stanley, Bank of America, Wells Fargo, etc). The agreement typically provides that the warehouse lender will provide the capital for the loan to the originator and the originator will provide the loan to the warehouse lender for securitization.

Continue reading “Securitization: What is it?”