asset backed securities | FORECLOSURE FRAUD | by DinSFLA

Tag Archive | "asset backed securities"

Former Ameriquest Employee fired after he reported illegal activity, sued under the whistleblower provision of the Sarbanes Oxley Act of 2002

Former Ameriquest Employee fired after he reported illegal activity, sued under the whistleblower provision of the Sarbanes Oxley Act of 2002

Those of you who’ve had any dealings with Ameriquest may find this interesting…

Via William McCloskey

William McCloskey worked for Ameriquest from November 2004 till March 2005. William was fired after he reported illegal activity behind the walls of his Ameriquest branch, which virtually mirrored all of the widespread reports about the company (to local detectives, the PA Attorney General, the S.E.C. and the F.B.I).

William sued Ameriquest Mortgage Company under the whistleblower provision of the Sarbanes Oxley Act of 2002. The act pertained to publicly traded companies and issuers of securities under Section 15(d) and 12h-3 of the Securities and Exchange Act of 1934.

[WJM 7]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

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FALSE STATEMENTS | Maiden Lane Asset-Backed Securities Trust 2008-1

FALSE STATEMENTS | Maiden Lane Asset-Backed Securities Trust 2008-1

By Lynn E. Szymoniak, ESQ

False Statements

Lender Processing Services
Maiden Lane ABS 2008-1

Action Date: June 16, 2011
Location: New York, NY

Who Else Relied on Mortgage Assignments From Lender Processing Services to Foreclose?

In the past few weeks, Fraud Digest has reported on NovaStar, Bear Stearns and WaMu Trusts. These trusts almost always do not have the critical loan documents needed to foreclose so they turned to Lender Processing Services to manufacture mortgage assignments for them.

Like these trusts, Maiden Lane Asset-Backed Securities Trust 2008-1 (“Maiden Lane”) most often uses Mortgage Assignments from LPS to foreclose.

Maiden Lane is “a special purpose vehicle consolidated by the Federal Reserve Bank of New York.” Maiden Lane was put together by some of the best and the brightest in banking – but when it came to seeing that the mortgage files contained the critical documents, Maiden Lane was no better than Countrywide or WaMu or Long Beach.

And to facilitate foreclosures, Maiden Lane uses Mortgage Assignments – that also purport to assign the NOTE – from Lender Processing Services. These Assignments were most often made in 2009 – and filed in 2009 and 2010.

Here is a partial list of Mortgage Assignments to Maiden Lane ABS Trust 2008-1. Note in particular the number of MERS titles claimed by LPS employees Greg Allen and Liquenda Allotey.

From Hillsborough County, Florida Official Records:

Instrument#: 2010265459
Assignor: MERS as nominee for Bear Stearns Residential Mortgage Corp., by Greg Allen, VP
Date of Assignment: 7-20-2009

Instrument #: 2010072578
Assignor: MERS as nominee for Solstice Capital Group, Inc., by Liquenda Allotey, VP
Date of Assignment: 7-20-2009

Instrument #: 2009383278
Assignor: MERS as nominee for Bravo Credit, by Greg Allen, VP
Date of Assignment: 11-2-2009

Instrument #: 2009316873
Assignor: MERS as nominee for GreenPoint Mortgage Funding, Inc., by Christine Allen, VP
Date of Assignment: 9-14-2009

Instrument #: 2009314046
Assignor: MERS as nominee for Bayrock Mortgage Corp. by Liquenda Allotey, VP and Greg Allen, VP
Date of Assignment: 9-16-2009

Instrument #: 2009043801
Assignor: MERS as nominee for GreenPoint Mortgage Funding by Greg Allen, VP and John Cody, VP
Date of Assignment: 1-13-2009

Instrument #: 2009017120
Assignor: MERS as nominee for Bravo Credit by Christine Anderson, VP and Greg Allen, VP
Date of Assignment: 12-9-2008

From Lee County, Florida Official Records:

Instrument #: 2009000111365
Assignor: MERS, by Liquenda Allotey, VP
Date of Assignment: 4-20-2009

Instrument #: 2009000033548
Assignor: MERS as nominee for Amerimortgage Bankers, LLC by Greg Allen, VP
Date of Assignment: 1-12-2009

From Palm Beach County, Florida Official Records:

Instrument #: 20080419438
Assignor: MERS as nominee for First Guaranty Financial Corp., d/b/a Phoenix Funding by Liquenda Allotey, VP and Mathew Casey, VP
Date of Assignment: 10-15-2008

Instrument #: 20080435965
Assignor: MERS as nominee for Geneva Mortgage Corp. by Liquenda Allotey, Assistant Secretary and Christine Anderson, VP
Date of Assignment: 11-11-2008

Instrument #: 20090055586
Assignor: MERS as nominee for American Home Mortgage Acceptance, Inc. by Liquenda Allotey, VP and Greg Allen, VP
Date of Assignment: 1-20-2009

Instrument #: 20090076228
Assignor: MERS as nominee for AMPRO Mortgage by Liquenda Allotey, VP and Greg Allen, VP
Date of Assignment: 2-3-2009

Instrument #: 20090096176
Assignor: MERS as nominee for Equifirst Corp. by Liquenda Allotey, VP and Greg Allen, VP
Date of Assignment: 2-24-2009

From Martin County, Florida Official Records:

Instrument #2132924
Assignor: MERS as nominee for GE MoneyBank by Greg Allen, VP
Date of Assignment: 2-4-2009

From Broward County, Florida Official Records:

Instrument #108479192
Assignor: MERS as nominee for Bravo Credit by Greg Allen, VP
Date of Assignment: 2-6-2009

Instrument #108878042
Assignor: MERS as nominee for Hometown Mortgage Services, Inc. by Greg Allen, VP
and Liquenda Allotey, VP
Date of Assignment: 9-9-2009

Instrument # 108819366
Assignor: MERS as nominee for Home Loan Center, Inc. d/b/a Lendingtree Loans by Greg Allen, VP and Liquenda Allotey, VP
Date of Assignment: 8-24-2009

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

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Ginnie Mae is pleased to announce that it has joined with Fannie Mae and Freddie Mac (GSEs) in adopting the Mortgage Industry Standards Maintenance Organization’s (“MISMO”) Uniform Loan Delivery Dataset (“ULDD”) for delivering loan information to the agencies. The GSEs have been working on this effort; and, announced to their respective program participants that effective September 1, 2011, and forward, all loans delivered to the GSEs will be required to be transmitted to the GSEs using the ULDD specifications.

The mortgage finance industry supports the adoption of standards and common file formats, as they lead to higher quality data, less rework, and lower costs for all participants in the industry, including borrowers.

Continue reading letter below…


[ipaper docId=45270380 access_key=key-2d8e3lcqmn1a42nlky1q height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

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WHITE PAPER: The Trustee’s Role in Asset-Backed Securities

WHITE PAPER: The Trustee’s Role in Asset-Backed Securities

November 9, 2010

—By the American Bankers Association, Corporate Trust Committee

Executive Summary
In this position paper, the Corporate Trust Committee is responding to current assertions that the obligations of trustees in asset-backed securities1 (?ABS?) are greater than the duties contractually undertaken by those trustees.

These assertions, which have been made by participants in the ABS market by investors, investment advisors, rating agencies and others2, fail to recognize the legal limitations on the duties of ABS trustees and have been made in response to both disappointing ABS investment performance and market issues arising from the current economic crisis. Although ABS investment performance has been disappointing, particularly with respect to certain residential mortgage-backed securities, and there were numerous market issues which gave rise to the current crisis, it is the position of the Committee that the contractual role of the trustee was not a contributing factor to either the investment performance or the market issues which may have caused or affected it.3 Moreover, in many instances, ambiguities or errors in the transaction documents governing impaired asset-backed securities have been construed in ways that were not contemplated or bargained for by the original transaction parties and that seek to alter the role and potential liability of trustees to a degree not warranted either by the contractual language or applicable statutory and common law. As a basic principle, the Committee acknowledges the need for more clarity in transaction documents generally going forward. However, the Committee’s position is that any issues that were neither contemplated by nor addressed in the documents governing current ABS transactions must be resolved in accordance with the legal contracts governing those transactions and generally accepted rules of contractual interpretation. Reliance on clear hindsight, even with the goal of protecting particular constituencies or investors generally, to impose duties retroactively on trustees that are clearly outside the range of duties undertaken in their contracts effectively abrogates those contracts and violates basic tenets of U.S. contract law.

[ipaper docId=42227548 access_key=key-1uknn1d8h89ukxpfkc5z height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in STOP FORECLOSURE FRAUDComments (0)

MISMO comments to the SEC on adopting MERS

MISMO comments to the SEC on adopting MERS


Page 23359 -Is the approach to asset number identifier workable? Should we only require or permit one type of asset number for all asset classes? If so, which one would be most useful? It appears that our proposed naming convention of “[CIKnumber]-[Sequential asset number]” would be applicable to all asset classes. Does the use of an asset number alleviate potential privacy issues for the underlying obligor? Why or why not? What issues arise if the asset number is determined by the registrant? Would there be any issues with investors being able to specifically identify each asset and follow its performance through periodic reporting.

MISMO Response
MISMO does not believe that a single asset numbering system should be required across all asset classes. The industry infrastructure behind each asset class is supported by different systems and business processes. Each ABS participant industry (e.g. residential real estate finance) should be able to utilize an asset numbering system as efficiency and convention dictate, absent a compelling regulatory purpose.

In the mortgage sphere, the MERS Mortgage Identification Number (MIN) has been in use since 1997 and has been assigned to over 65 million loans. The MIN is a combination of a unique loan identifier for the originating lender plus the loan’s internal file number. It is available for residential, multifamily and commercial loans. It can attach to a mortgage as early as the application for a loan. The MIN is then used to track a loan throughout its life cycle, from application through monthly servicing activities until final loan payoff. It is used also used within the loss mitigation and Real Estate Owned (REO) processes. The MIN is well integrated within all facets of the real estate finance industry.

The adoption of a new, different, and/or conflicting numbering system would result in greater confusion, unnecessary system development costs, longer lead times for compliance and decreased transparency by making it more difficult for industry participants to track assets across multiple data and reporting systems. The real estate finance industry would be required to add the new asset number to all of its applications, databases, and file transfers between applications. In certain situations, a new asset number may have unintended consequences in the primary residential mortgage market. If a lender has to decide at the time of application whether to employ the MIN or some other loan numbering system based on the lender’s estimation that the borrower may not qualify for a conforming loan (loans meeting the criteria of Fannie Mae or Freddie Mac) or governmental mortgage (loans meeting the criteria of FHA, VA, or the Rural Housing Service), then the Proposal could unintentionally steer applicants to particular loan types. Alternatively, if a lender starts down one path and then needs to re-key an application, the chances for error increase.
The MIN is the only universally accepted identifier for loans in the mortgage industry across the entire lifecycle of the loan. The major participants in the residential mortgage industry utilize the MIN. Fannie Mae, Freddie Mac and Ginnie Mae all utilize the MIN. MISMO encourages the SEC to adopt the MERS Mortgage Identification Number (MIN) as the primary loan identifier for real estate finance ABS.

As long as the proposed data elements cannot be associated with a specific individual, there should not be privacy concerns with this information being made publically available. In anticipation of this requirement, MERS has designed and will implement a public version of the MIN that issuers would use in their public disclosure file format that could not be used to identify an individual associated with the required data.

To address the possibility of duplicate loan identifiers across different ABS industries (e.g. real estate finance and credit cards), a unique identifier can be provided with file submissions to denote a particular asset class, avoiding the drastic impact of imposing a whole new numbering system on an industry.

[ipaper docId=42072634 access_key=key-agtoyaj6evcxfh7lkuv height=600 width=600 /]

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in STOP FORECLOSURE FRAUDComments (7)

MERS comments on the Commission’s Proposed Rule for Asset-Backed w/ Referrals

MERS comments on the Commission’s Proposed Rule for Asset-Backed w/ Referrals


MERS was created in 1995 under the auspices of the Mortgage Bankers Association (MBA), as the mortgage industry’s utility, to streamline the mortgage process by using electronic commerce to eliminate paper. Our Board of Directors and shareholders are comprised of representatives from the MBA, Fannie Mae, Freddie Mac, large and small mortgage companies, the American Land Title Association (ALTA), the CRE Finance Council, title underwriters, and mortgage insurance companies.

Our initial focus was to eliminate the need to prepare and record assignments when trading mortgage loans. Our members make MERS the mortgagee and their nominee on the security instruments they record in the county land records. Then they register their loans on the MERS® System so they can electronically track changes in ownership over the life of the loans. This process eliminates the need to record assignments every time the loans are traded. Over 3000 MERS members have registered more than 65 million loans on the MERS® System, saving the mortgage industry hundreds of millions of dollars in the process. The Federal Housing Administration (FHA) and Veterans Administration (VA) approved MERS for government loans because they recognized the value to consumers. On table-funded loans, MERS eliminates the cost to the consumer of the mortgage assignment ($30 – $150). In addition, the MERS process ensures that lien releases are not delayed by eliminating potential breaks in the chain of title. Similar to the residential product, we also addressed the assignment problem in the commercial market with MERS® Commercial, on which is registered over $110 billion in Commercial Mortgage-Backed Securities (CMBS) loans.

More than 60 percent of existing mortgages have an assigned MIN, making a total of 65,000,000 loans registered since the inception of the system in 1997. The corresponding data for these mortgages is tracked on the MERS® System from origination through sale and until payoff. MERS therefore offers a substantial base of historical data about existing loans that can be harnessed to bring transparency to existing MBS products. Attached are letters from the MBA, FHA, Fannie Mae and Freddie Mac on this point.

[ipaper docId=35515524 access_key=key-vw36i36b7uiubwj5x8u height=600 width=600 /]


MERS May NOT Foreclose for Fannie Mae effective 5/1/2010


Fannie Mae’s Announcing Miscellaneous Servicing Policy Changes

© 2010-19 FORECLOSURE FRAUD | by DinSFLA. All rights reserved.

Posted in bank of america, chain in title, fannie mae, foreclosure, foreclosures, Freddie Mac, mbs, MERS, MERSCORP, Mortgage Bankers Association, MORTGAGE ELECTRONIC REGISTRATION SYSTEMS INC., Notary, R.K. Arnold, Real Estate, robo signers, S.E.C., securitization, STOP FORECLOSURE FRAUD, title company, Wall StreetComments (2)

A short modern HOUSING STORY…

A short modern HOUSING STORY…


[scribd id=30335710 key=key-1tioqtwz59yxmd5403h9 mode=list]

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SEC Proposes Rules to Increase Investor Protections in Asset-Backed Securities

SEC Proposes Rules to Increase Investor Protections in Asset-Backed Securities

 Wouldn’t it be “nice” if someone gave a da** about all of us who have had our entire life’s work destroyed?
The primary reason they’re catering to the investors is so many are foreign who won’t think twice about filing lawsuits!


Video: Open Meeting
Play video of SEC Chairman Schapiro discussing ABS
Chairman Schapiro Discusses ABS:
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Washington, D.C., April 7, 2010 — The Securities and Exchange Commission today proposed rules that would revise the disclosure, reporting and offering process for asset-backed securities (ABS) to better protect investors in the securitization market.

The proposed rules are intended to provide investors with more detailed and current information about ABS and more time to make their investment decisions. The proposed rules also seek to better align the interests of issuers and investors by creating a retention or “skin in the game” requirement for certain public offerings of ABS.

“The rules we are proposing stem from lessons learned during the financial crisis,” said SEC Chairman Mary L. Schapiro. “These rules if adopted would revise the regulatory regime for asset-backed securities in order to better protect investors.”

Asset-backed securities are created by buying and bundling loans — such as residential mortgage loans, commercial loans or student loans — and creating securities backed by those assets, which are then sold to investors. Often, a bundle of loans is divided into separate securities with different levels of risk and returns. Payments on the loans are distributed to the holders of the lower-risk, lower-interest securities first, and then to the holders of the higher-risk securities.

Most public offerings of ABS are conducted through expedited SEC procedures known as “shelf offerings.” ABS offerings also are sold as private placements which are exempt from SEC registration. ABS private placements are typically sold to large institutional investors known as qualified purchasers (QIBs).

Public comments on the proposed rules should be received by the Commission within 90 days after its publication in the Federal Register.

# # #



During the financial crisis, ABS holders suffered significant losses and the securitization market has been relatively dormant ever since. The crisis revealed that many investors were not fully aware of the risk in the underlying mortgages within the pools of securitized assets and over-relied on credit ratings assigned by rating agencies, which, in many cases, turned out to be wrong.

The proposed rules seek to address the problems highlighted by the crisis and to head off the next one, by giving investors the tools they need to accurately assess risk and by better aligning the interests of the issuer with those of the investor.

The Proposed Rules:

Specifically, the Commission’s proposals would:

Require the Filing of Tagged Computer-Readable, Standardized Loan-Level Information

Under the current ABS rules, information about the loans in an ABS pool is required only at the pool level. The SEC will consider whether to propose new disclosure rules that would require ABS issuers to provide specific data for each loan in the asset pool both at the time of securitization and on an ongoing basis.

The loan-level data would cover items such as the terms and underwriting of the loan, credit information about the borrower, and/or characteristics of the property securing the loan. To make the required information comparable among issuers of the same asset class and more useable to investors, the rules require that the data be provided according to proposed standards and in a format tagged in eXtensible Markup Language (XML) so that it may be processed by computer. This would enable investors to synthesize large amounts of data about the underlying assets.

Examples of the types of information that would be provided for each loan in the pool include:

  • A number identifying each loan so that the loan and its performance can be tracked throughout the life of the security.
  • Disclosure of whether or not the loan was made without following the stated loan underwriting standards.
  • Disclosure of the extent to which the obligor’s income was verified (e.g. did the lender look at W-2 forms and tax returns?).
  • Detailed information about the steps being taken by the servicer to limit losses on loans that are not being paid in full.

The proposal requiring loan-level information would apply to ABS issuers that offer securities backed by residential mortgages, commercial mortgages, automobile loans and leases, equipment loans and leases, student loans, floorplan financings, corporate debt, and ABS backed by other ABS.

ABS that are backed by credit card receivables may have millions of accounts in the pool, so those offerings would be exempt from loan-level information requirements. However, proposed new rules would require issuers to disclose more granular information regarding the underlying credit card accounts in tagged, computer-readable and standardized groupings. Under the proposed rules, issuers of ABS backed by credit cards would present statistical data about accounts with similar characteristics grouped by credit score range, age of account, payment status, and geographic location.

Require the Filing of a Computer Program That Gives Effect to the Waterfall

The SEC will consider a proposal requiring, along with the filing of a prospectus for an ABS transaction, the filing of a computer program that demonstrates the effect of the “waterfall.” As noted above, the waterfall dictates how borrowers’ loan payments are distributed to investors in the ABS, how losses or lack of payment on those loans is divided among the investors and when administrative expenses such as servicing those loans are paid to service providers. Currently, a narrative description of the waterfall must be disclosed to investors in the prospectus. The computer program of the waterfall would allow the user to input the loan level data that would also be required to be provided, as described above, giving investors and the markets better tools to analyze an ABS offering.

Provide Investors with More Time to Consider Transaction-Specific Information

The SEC will consider whether to impose time limits before a sponsor of the ABS can conduct the first sale in a shelf offering. Under current rules, issuers may sell ABS almost immediately, without providing investors a minimum amount of time to review the disclosure in the offering materials.

The SEC will consider whether to propose requiring that issuers, for each off-the-shelf takedown or offering, file a preliminary prospectus at least five business days before the first sale in the offering. This would give investors time to consider transaction-specific information, including the loan level data described above, before an investment decision needs to be made.

Repeal the Investment Grade Ratings Criterion for ABS Shelf-Eligibility

Under existing rules, an ABS offering is not eligible for an expedited offering unless the securities are rated investment-grade by a credit rating agency. The SEC will consider whether to propose new ABS “shelf” eligibility criteria to enhance the type of securities that are being offered and the accountability of participants in that securitization chain.

The proposals would require, as a condition for shelf-eligibility, that:

The chief executive officer of the ABS issuer certify that the assets have characteristics that provide a reasonable basis to believe that they will produce cash flows as described in the prospectus.

The ABS sponsor hold five percent of each class of asset-backed securities and not hedge those holdings.

The ABS issuer provide a mechanism whereby the investors will be able to confirm that the assets comply with the issuer’s representations and warranties, such as representations and warranties that the loans in the ABS pool were underwritten in a manner consistent with the lenders’ underwriting standards.

The ABS issuer agrees to file Exchange Act reports with the Commission on an ongoing basis (rather than stop reporting with the Commission in the first year, which the Exchange Act currently permits many ABS issuers to do).

While ratings would continue to be allowed for ABS offerings, the proposed rules would eliminate the ratings requirement from the SEC’s expedited shelf-eligibility test. Additionally, the added information and time provided under the proposals should allow investors to perform their own analyses and rely less on ratings.

Increase Transparency in the Private Structured Finance Market

The SEC will also consider whether to propose disclosure requirements that would increase transparency in the exempt private structured finance market where some types of asset-backed securities, such as collateralized debt obligations (CDOs), are sold. Under these proposals, where an SEC safe harbor (e.g., Rule 144A or Regulation D) is relied upon for the unregistered sale of securities, the issuer must provide investors, upon request, at the time of the offering and on an ongoing basis, the same information that would be required if the offering were registered with the SEC or if the issuer were required to report with the SEC under the Exchange Act.

The SEC also will consider a proposal to require that an ABS issuer file a public notice of the initial placement of securities to be sold under Securities Act Rule 144A. This notice would require information about those ABS offerings and would be publicly filed with the SEC in its EDGAR database. Form D, the notice of an offering made in reliance on Regulation D, also would be revised to collect information on structured finance products.

Make Other Revisions to the Regulation of ABS

The SEC also will consider whether to propose other revisions regarding ABS. Among other things, the SEC will consider whether to propose to:

  • Standardize certain static pool disclosure.
  • Amend the Regulation AB definition of an “asset-backed security” to better ensure that investors have sufficient information about the securities.
  • Require additional information regarding originators and sponsors, such as information for certain identified originators and the sponsor relating to the amount of the originator’s or sponsor’s publicly securitized assets that, in the last three years, has been the subject of a demand to repurchase or replace.
  • Lower the threshold change in the material pool characteristics that triggers the filing of a Form 8-K (pursuant to Item 6.05) from five percent to one percent.
  • Specify, in addition to the loan-level proposed requirements, the disclosure that must be provided on an aggregate basis relating to the type and amount of assets that do not meet the underwriting criteria that is described in the prospectus.

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