by Gary Victor Dubin, Esq. Honolulu, Hawaii

Gary Victor Dubin is a dynamite Honolulu foreclosure defense attorney with over 40 wins by the DUBIN LAW FIRM in Hawaii foreclosure courts for his clients just in the last year. This is a stunning success given the current judicial climate in Hawaii, not to mention the complexity of securitization, the hidden frauds…and of course, card games and golfing with banksters doesn’t help either.

Dubin’s essay “Securitized Distrust” is a culmination of insight with over 20+ years of first hand litigation and this leads right into our latest discovery of WaMu multiple trust loan assignments. Shuffling or fraud… or both?

It’s no wonder that the Wall Street MBS scheme collapsed. Last night we ran a random audit on WaMu Mortgage Pass-Through Certificates, Mortgage Loan Trusts. One loan was found in 6 different trusts, another loan was found in FIVE trusts’ original SEC loan level data, 39 were listed in 3 trusts, and 503 were listed in two separate trusts.  

The winner so far is a NEW YORK condo, loan number WaMu loan # 714934858, appeared in 6 DIFFERENT trusts from May through November 2006…

Check your winning WaMu lottery loan numbers folks and find  a good foreclosure defense attorney that understands securitization – you may have a free house… or a severely clouded title. And if you are an investor – you may have hit pay dirt.
(More WaMu at the bottom)

By Gary Victor Dubin

Securitized trusts — that is, the bundling and selling of shares therein to investors via a business merger between lenders and wall street (mortgage backed securities or MBS) — is relatively new, not even understood by many lawyers today and very few if fully any Hawaii judges, and certainly not by me until only a few years ago, and I am still learning day by day.

In recent years, my law firm has handled dozens of securitized trust foreclosure defense cases and one defense of an SEC civil prosecution against broker-sellers of such MBS shares. The fraud throughout the secondary mortgage market has been pervasive:

1. Promissory notes intended for securitized trusts based on my experience were either intentionally never deposited into the securitized trust in the first place on purpose with full knowledge by everyone involved or were deposited in the trusts only as copies.

2. Based on the testimony of whistleblowers and forthright bank executives, lenders intentionally destroyed most of their original notes and instead before doing so digitized them, supposedly for convenience — which of course destroyed their status as negotiable instruments, leaving only copies somewhere, and often not with the Trustee.

3. At first, it appeared that that was just sloppiness, but subsequently in our cases we have discovered that it appears to have been common practice intentionally not to deposit the notes (or the mortgages) in the securitized trusts, but to withhold them and unlawfully use them on the side as collateral to support loans or credit from Federal Home Loan Bank Boards, a practice that apparently mushroomed as lenders found themselves in financial trouble and in need of capital.

4. Documented evidence has recently just been brought to my attention that many notes and mortgages were even put simultaneously into two or three or perhaps even more separate securitized trusts, unknown of course to individual investors who thought that they had sole security for their investments, unknown to insurance companies like AIG that insured the MBS based on certified loan underwriting guidelines that they were unaware were being ignored and intentionally compromised by false appraisals and false loan applications.

5. All of this recently surfacing has of course started to generate a massive amount of litigation between lenders and investors and mortgagors and insurers and title companies, in which inevitably the question of fraudulent notes and fraudulent mortgages as well as fraudulent mortgage assignments has occasionally arisen. Just this week I had an incredible hearing before Judge Ayabe in one such case involving a claimed lost mortgage assignment and the submission in court of a false note to get around the absence of the mortgage assignment.

6. All of this of course is pregnant with fraud and criminality, particularly against MBS investors. Securitized trusts also have special IRS preferential status, called REMIC, able to pass through income to investors and avoid taxation so long as the deposit of the note and mortgage occur at the time of the formation of the securitized trust. Having violated REMIC requirements which could cost securitized trusts each millions, the securitized trusts have been a ticking IRS time bomb.

7. As a result, as all of this began to surface a year or so ago, as a corollary to the so-called “too big to fail” hobgoblin, the Obama Administration and regulatory agencies began to seek frankly to cover things up, recently convincing the AGs to settle with the big five banks which are either securitized trust loan servicers or Trustees themselves and to grant them immunity, especially I understand from IRS violations.

8. The effect on borrowers has been dramatic. As foreclosures increased, the securitized trusts have had a huge problem, how to foreclose in court (or nonjudicial proceedings) without the notes or even the mortgages — so they began to falsify promissory notes when needed (we have even found evidence that some lenders have been photo-shopping notes), to create phony allonges and phony bearer notes, and to submit in court no less fraudulently notarized and fraudulently signed mortgage assignments to the securitized trusts — a practice now having become famously known as “robo-signing.”

9. At first, the foreclosing mortgagees got away with it as judges and attorneys were virtually unanimously unaware of what was going on, until a few relentless attorneys and investigators on the Mainland exposed the fraud — one recently getting I understand $18,000,000 from the recent AG settlement for her False Claims Act whistle-blowing!

10. For some time my law firm has been arguing such issues in defense of borrowers — particularly as standing issues — but with little success, until recently, as more and more Hawaii judges are finally beginning to understand.

11. Very rarely in our cases is the issue one of lost notes or lost mortgages, but usually phony note endorsements or phony allonges or phony mortgage assignments — or all three.

12. Mortgages of course in Hawaii are all recorded at the State Bureau of Conveyances, but as a result mainly due to the use by securitized trusts of the private Mortgage Electronic Registration System (MERS), mortgage assignments have not been contemporaneously recorded — which has allowed the illicit trafficking in mortgage interests — which has generated still additional legal issues, such as whether the ownership of the promissory note can be separated from the ownership of the related mortgage, an issue now before several state high courts on the Mainland.

The above flood of new legal issues is just starting to hit Hawaii appellate courts, as my law firm has several related cases presently working their way through our appellate system, as the largest financial scandal in American history plays out.

Unlike the recent AG settlement, I prefer the approach that enforces traditional real property and UCC negotiable instruments laws, like the New York and New Jersey courts are now doing, and let the chips fall where they may — directly on top of the heads of those who violated the law — by refusing to reward fraud.

Gary Victor Dubin 3/14/12

Dubin Law Offices
Harbor Court, Suite 3100
55 Merchant Street
Honolulu, Hawaii 96813

(808) 537-2300 (office)
(808) 523-7733 (facsimile)

By DeadlyClear


We reviewed 66,475 loans in the 2006 and 2007 original SEC loan tapes filed with the SEC for 28 different trusts. In addition we did a quick review of WMALT trusts (6 trusts = 8885 loans so far out of 21 trusts) and found 46-Doubles and 2-Triples – and that’s just starting on this batch.

What a mess! And don’t act like it’s news to you, Mr. Dimon. We’re still analyzing the 503 dual trust loans we’ve found (same mortgage loan in 2 different trusts).  Over 500 loans in at least 2 trusts is enough reason to hire an attorney to investigate and/or take to your state AG.  Here are some of the biggies for now.  The 6X, 5X and 3X Trust sitters.  If you own a WaMu mortgage loan or investment certificates, better check your paperwork… not that any of these loans actually made it into the trusts… maybe their applications did… but the jury is still out on actual signed promissory notes and mortgages.  More updates to follow – stay tuned. Let us know if any of these belong to you.

Here is a sampling.Wamu Mortgage Loan Trusts

714934858      2006 AR13       6     NEW YORK

714934858      2006 AR17       6

714934858      2006 AR5         6

714934858      2006 AR11       6

714934858      2006 AR7         6

714934858      2006 AR9         6

3062663459    2006 AR11       5     SOUTHWEST RANCHES, FL

3062663459    2006 AR15       5

3062663459    2006 AR13       5

3062663459    2006 AR17       5

3062663459    2006 AR7         5

687327833      2006 AR5         3     WATER MILL, NEW YORK

687327833      2006 AR7         3

687327833      2006 AR9         3

702890393      2006 AR5         3     SEDONA, AZ

702890393      2006 AR7         3

702890393      2006 AR9         3

708816277      2006 AR11       3     LOS ANGELES, CA

708816277      2006 AR7         3

708816277      2006 AR9         3

709225601      2006 AR5         3     BEVERLY HILLS, CA

709225601      2006 AR7         3

709225601      2006 AR9         3

3010250284    2006 AR13       3     SAN JOSE, CA

3010250284    2006 AR17       3

3010250284    2007 OA3        3

3010658064    2007 OA4        3     ST PETE BEACH, FL

3010658064    2007 OA5        3

3010658064    2007 OA6        3

3012468561    2007 OA3        3     MIAMI, FL

3012468561    2007 OA4        3

3012468561    2007 OA5        3

3012667048    2007 OA4        3     SACRAMENTO, CA

3012667048    2007 OA5        3

3012667048    2007 OA6        3

3012714196    2007 OA4        3     DOWNEY, CA

3012714196    2007 OA5        3

3012714196    2007 OA6        3

3012719393    2007 OA4        3     ISSAQUAH, WA

3012719393    2007 OA5        3

3012719393    2007 OA6        3

3012747220    2007 OA3        3     FONTANA, CA

3012747220    2007 OA4        3

3012747220    2007 OA5        3

3012843490    2007 OA4        3     LOS ANGELES, CA

3012843490    2007 OA5        3

3012843490    2007 OA6        3

3012865386    2007 OA4        3     HESPERIA, CA

3012865386    2007 OA5        3

3012865386    2007 OA6        3

3012957647    2007 OA4        3     POMONA, CA

3012957647    2007 OA5        3

3012957647    2007 OA6        3

3013126374    2007 OA4        3     WELLINGTON, FL

3013126374    2007 OA5        3

3013126374    2007 OA6        3

3013390855    2007 OA4        3     LOS ANGELES, CA

3013390855    2007 OA5        3

3013390855    2007 OA6        3

3013394121    2007 OA4        3     ORLANDO, FL

3013394121    2007 OA5        3

3013394121    2007 OA6        3

3013432657    2007 OA4        3     NEWPORT BEACH, CA

3013432657    2007 OA5        3

3013432657    2007 OA6        3

3017285747    2007 OA4        3     CORTE MADERA,        CA

3017285747    2007 OA5        3

3017285747    2007 OA6        3

3051253262    2006 AR5         3     BOWIE, MD

3051253262    2006 AR7         3

3051253262    2006 AR9         3

3061594366    2006 AR5         3     LAS VEGAS, NV

3061594366    2006 AR7         3

3061594366    2006 AR9         3

3062124403    2006 AR13       3     THOUSAND OAKS, CA

3062124403    2006 AR7         3

3062124403    2006 AR9         3

3062175199    2006 AR11       3     BERKELEY, CA

3062175199    2006 AR13       3

3062175199    2006 AR9         3

3062395722    2006 AR13       3     MALIBU, CA

3062395722    2006 AR7         3

3062395722    2006 AR9         3

3062651207    2006 AR11       3     MIAMI, FL

3062651207    2006 AR7         3

3062651207    2006 AR9         3

3062758135    2006 AR15       3     DUARTE, CA

3062758135    2006 AR13       3

3062758135    2006 AR17       3

page divider

Whether or not you are represented by an attorney understanding the legal system is an asset.  The more you learn, the less likely you are to be taken advantage of or scammed.  Knowledge is power!


  1. Pingback: Black Literary Market Place » Blog Archive » FW: SECURITIZED DISTRUST - One loan was found in 6 different trusts, another loan was found in FIVE trusts’ original SEC loan level data, 39 were listed in 3 trusts, and 503 were listed in two sep

  2. Pingback: Black Literary Market Place » Blog Archive » FW: SECURITIZED DISTRUST - One loan was found in 6 different trusts, another loan was found in FIVE trusts’ original SEC loan level data, 39 were listed in 3 trusts, and 503 were listed in two sep

    • Agree excellent article, Gary Durbin gets it. He has a lot of great ideas how to fix it too. Listen to his radio broadcast on Sunday’s about Foreclosures at 3 p.m. . I always learn something new. Governor Waihaii and Mr. Durbin discuss the plight of the homeowners that are being forced out of their homes and the fraud being perpetuated on the American people by the bankers in the largest scam this country has ever seen..

      • If you are in default there should be an assignment filed in your records department under the mortgage. If you are not in default, try CFLA, ask for Andrew and ask for an “initial search” – you do not need a full audit until you can find out where your collateral is and how it got there. I have no financial affiliation with them – I just know they do decent research. CFLA (310) 432-6304.

        Also, you should be able to write a QWR to your servicer and ask if your loan is or was ever in a securitized trust. Which one and when and how it got there.



  5. Great work! Are you doing any research on the Encore Credit Receivables Trust 2005-1? Real fishy. Filed 15D within 9 months of closing date. No record in IRS 938 lists. Stock trades at 8cents a share. Shares bought monthly by hedge funds, I would guess to show that it is still alive? Frequently associated with Encore Credit Corp CA, defunct in 08. Keep up the good work!

  6. Hello. Please explain the numbers in the columns. Is the first number the loan number or MIN. Is the second number the CUSIP or the mortgage pass-through trust certificate number.
    I’m unable to find my loan number in the trust the Trustee claims it is — only samples of what the loan will look like in the prospectus.
    Thank you.

  7. I am a New York lawyer and I’m curious how you found the schedules to check. You state “We reviewed 66,475 loans in the 2006 and 2007 original SEC loan tapes filed with the SEC for 28 different trusts. In addition we did a quick review of WMALT trusts (6 trusts = 8885 loans so far out of 21 trusts) and found 46-Doubles and 2-Triples – and that’s just starting on this batch”

    You say you reviewed loan tapes. How were you able to do that

  8. Hello again!
    My loan’s trust is with cwmbs,inc. chl mortgage pass through trust chl 2005-25 and there is no filing of the FWP (free writing prospectuses Rule 163/433) with a list on loan numbers in the SEC filings.
    Wondered if you have another way of finding loan numbers in Trusts.

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  10. Pingback: Time Bomb: Thousands of Mortgage Loans Duplicated (Counterfeited) and Sold to Multiple Investment Trusts

  11. Found the Trust in SEC but there were no loan numbers.
    Would you tell us another way of finding the loan numbers if there is no FWP in the Trust’s documents.
    That information would help hundreds of people trying to stop this fraud.
    Thank you for your hard work and publishing what you have found.

    • There will not be.
      The banks did not want to get caught defrauding
      the RMBS investors.They do have to identify the loans by
      census data with OCC. and Fed Reserve.also IRS cuspid filings.
      Also get Trustee report(annual)to investors.
      Take some work to dig through it all,but its,promise
      Its a giant shell game and all the banks are in it up to their necks.

      • I’m already to the point that the investor’s fund managers and their agents need to be thoroughly investigated. Many are still holding the same jobs or better. There appears to have been very little due diligence, if any. Promises were apparently made because mortgage loans have never been liquid and in theses cases were actually high risks. It appears the certificates were purchased “sight unseen” on inflated appraisal values with the sales kicker of ‘don’t worry they are insured and will default and each time you’ll get a pay-off to keep your liquidity’…

        These pension and retirement funds were trusted to individuals who worked for Governors, union bosses and corporate CEOs that called the final shots. They all need the spotlight to be focused on them with a major investigation of who, what, why, where and when being asked. I’ll bet we find zero due diligence and the money landed in the accounts before the borrowers signed the notes… And in that case, I go back to “were these negotiable instruments or actually notes assigned to a trust and that made them securities?” And in that case, game over.

  12. Pingback: SECURITIZED DISTRUST « Timothymccandless's Weblog

  13. Pingback: Time Bomb: Thousands of Mortgage Loans Duplicated (Counterfeited) and Sold to Multiple Investment Trusts… « Total Collapse!

  14. Pingback: Time Bomb: Thousands of Mortgage Loans Duplicated (Counterfeited) and Sold to Multiple Investment Trusts… « Uncategorized « Inflation vs. Price of Gold

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  17. I believe that the multiple trusts and multiple beneficiary problem happening at the time of the fraudclosure is the most under reported story going on right now. That is why I am so happy that the other blogs are starting to talk about this multiple trust and multiple beneficiary issue, as I have been talking about it on for some time now.

    The law stipulates: “An obligor is not obliged to pay the instrument if the person seeking enforcement of the instrument does not have rights of a holder in due course and the obligor proves that the instrument is a lost or stolen instrument.” – U.C.C. provision, U.C.C. §3-305(c)

    This is why every homeowner should get a title and securitization search done:

    My name is John Wright AND I AM FIGHTING BACK!

    John Wright

  18. Any chance that an affidavit of multiple loan securitization could be prepared by the party investigating. It would appear that in each and every securitization that has multiple loans included that the parties would have an unclean hands defense for the trustee breach of duty among others. The SEC and AGs should be notified under 18 USC 3 and 4 misprision of felony and made an accessory after the fact if they do not immediately take action. It is further that they cannot ignore such activity or it is a breach of the public trust. I have an entire database that I created in excel that has a large portion of the loans listed in the trustee reports. It breaks down the original loan number, investor number, address, amounts etc. I think it have maybe 350-500K loans included and can be searched through the edit function for the loans. I would be willing to share the info with those doing the investigation if it helps. Thanks

  19. Pingback: SECURITIZED DISTRUST | Deadly Clear | Mortgages, Foreclosures, and Student Loans

  20. Pingback: John’s Daily Blog Older #16 Date (03/20/12-03/5/12)

  21. Pingback: The Securitization Curtain is Lifting in Hawaii! | Deadly Clear

  22. Pingback: USDC Judge Seabright in Hawaii exemplars “Securitization Fail” and DISMISSES a foreclosure for “lack of standing”. | Challenge Your Lender

  23. Pingback: USDC Judge Seabright in Hawaii exemplars “Securitization Fail” and DISMISSES a foreclosure for “lack of standing”.

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  25. Hi
    I have a Wamu fa loan that was made with another bank and assigned 7 days later to Wamu fa on 3-17-2006, yes, the non existent bank since 4-4-2005. PN is stamped in blank with Cynthia Riley’s name being part of the stamp, w/o recourse. I cannot find the loan in any trust. Assignment of mortgage is all robot signers with Margaret Dalton being VP of jpmc for the FDIC. The PN was allegedly in Lasalle banks custodial care up until litigation started. I need evidence of the securitization of the loan. Freddie Macs site states they own the note. Any help?
    Thank you

    • I have Cynthia A. Riley stamp , bloomberg report showing my loan is in up to 13 trust , if I can share info let me know , I also have letter from Chase saying my loan was paid in full 3-10-2010

      • Hello,
        How can I find out if my loan was paid, and get a letter from bank saying the loan was paid. Ben

      • Send a certified return receipt letter requesting certified notarized copy of org. Note , deed of trust and accounting from loan org. Date to current . See what they send perhaps hey have 20 days to furnish.

    • David, I also have Cynthia A. Riley signing as Vice President on my Promissory Note “Pay to the order of” BLANK without recourse Washington Mutual Bank, FA, followed by her signature and name in print. If yo can you email me a copy of your letter from chase stating your loan was paid in full it would be of great help. Thanks Daniel H—

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  28. Pingback: The Securitization Curtain is Lifting in Hawaii! | Deadly Clear « The Black Robed Mafia

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  33. Pingback: Deadly Clear | WHOA Wells Fargo – Hawaii Halts Those Horses! | Foreclosure Fraud - Fighting Foreclosure Fraud by Sharing the Knowledge

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  36. Pingback: SECURITIZED DISTRUST – PART TWO | Deadly Clear

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  38. Does anyone have any info on mortgage loan asset backed trust series 2006 AR1 or the MLMI Trust Series 2006 AR1? I appreciate your help in advance.

  39. This Lawrence Nardi deposition is of an employee in the litigation department for Chase that states out of thousands of documents he put together for litigation for Chase on WAMU loans he has never seen an original real note nor allonge or assignment from WAMU to Chase or the FDIC or anyone. They simply do not exhist. Lots of good info throughout the depo, however the best is on pg 260-261.

    • Thanks Mike~ I found this awhile ago and noticed that my the note presented in the foreclosure is not as listed in the PSA. I ordered the PSA and Prospectus certified. Do you know of any other information? U were very helpful; thanks so much~ Kind Regards

  40. can any one tell me if they have a washington mutual bank fa loan starting with 301807 ,,, or 301798,,, in 2007 and if they have found in s e c ,,,,,, in the file fwp stands for free writing prospectus thank you

    • dont have any of that info for you. however email me and I have good info and depositions WAMU loans were never tranfered from WAMU .. I have a hard to find copy of Lawrence Nardi whom work for Chase in the litigation department of Chase and he say the transfers of assignments nor notes of any kind do not exsit He was in the position to put informtiontogether for Chase to litigate and out of thousands of docs there was not one valid proof of a note or assignment of anykind proving WAMU transferred the notes to Chase. Shelleystotalbodyworks@comcast,net.

    • @Philip 1/16/13 8:37p

      You’d need to find the Mortgage Loan Schedule or a Distribution Report that specifically mentions the loan#s. Alternatively, someone with access to a Bloomberg terminal account or ABSNet account could possibly track it for you. But then you’d potentially be doing the note holder’s work for them. As case law is progressing, and we now have several rulings in favor of borrowers challenging PSA terms, it may be a better tactic to simply show that the note in question wasn’t properly securitized according to the terms of the Trust, Internal Revenue Code and, if governed by, New York Trust law.

      • LaMar Gunn in Delaware is doing my tracking, he has a Bloomberg terminal. he charges for it . It is not cheap to have a Bloomberg terminal I understand.”La Mar Gunn” ;

      • Go to DocTel Portal ( and start with a search first for $225. If the loan cannot be found in Bloomberg then there is very little wasted. I’ve seen people bring in bogus audits that claim the loan is in a trust with all this elaborate detail and when we checked out the information it was false. If it can be located you’ll learn your tranche(s) and be able to see if they are current or when they began to show losses. You’ll get screen shots and an excel. From that point you can decide if you want a full audit.

        In some cases we’ve found that certain tranches were sold through the Maiden Lane deals. There is a lot to be said for an initial search.

      • DocTel Portal ( has found more and more loans located in trusts when the SERVICER says it owns the loan and falsely sues in its name rather than the trust. BofA is a leading culprit in these cases. Why would they bypass the trust?

        We think it goes back to securitization of a note makes it non-negotiable, in addition to the fact that the certificates represent securities. That would make the transactions amenable to UCC Articles 8 & 9. The interesting part of Art. 8 (which is the gateway to Art. 9) is that 501(d) says the note CANNOT be in blank. It must be endorsed. How many specifically endorsed notes have you seen? Yeah, none, right?

        This is research – not legal advice. Best to take the information you obtain to a reputable foreclosure defense attorney.

  41. Pingback: Bloomberg Terminal Iceberg – Tortious Interference? | Deadly Clear

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  44. Pingback: Bloomberg Terminal Iceberg – Tortious Interference? | Real Estate Justice For ALL!

  45. does Freddie Mac sell the “loans” that they “own” into securitized trusts? If so, how do I find out what happened to my Countrywide “loan”?

    • Pretty sure that was Freddie and Fannies main function to securitize loans. Shawn Newman professor of law and attorney wrote an article on it called”Freddie and Fannies Shell Game” I will pull it up

      • The above article is one more reason I believe it appears THE NOTES ARE NULLIFIED! Between Freddie and Fannies shell game and the MERS shell game the entire world has been conned at the tax payers expense. And especially the American families expense and the entire globe for that matter. The banks dont own the loans. The homeowners do. And are being forced out of the homes they own in my opinion. Due to the banksters own hands.

      • Nice most of the sites Shawns articles are on have been removed Hmmmmmmmm wonder why? Hmmmmmmmm! The stock market in fo is removed now also. Just checked it out.

    • Welcome to Freddie and Fannie’s Mortgage Shell Game

      By Shawn Timothy Newman, J.D.

      Adjunct Professor

      Saint Martin’s University

      In common parlance, a mortgage (or Deed of Trust) includes the underlying loan (promissory note) and the security on that loan (mortgage or Deed of Trust). This ignores the fact that the note and mortgage (or DOT) are two separate contracts governed by some different laws and legal principals.

      As noted in Powell on Real Property, sec. 37.27 [2] (Michael Allan Wolf ed., LexisNexis Matthew Bender 2010)

      It must be remembered that the mortgagee has two interests: (1) the debt or obligation which is owned to him, and (2) the security interest in land represented by the mortgage…. In fact, the primary interest is the personalty debt obligation. The interest in land which is available in case security is necessary because of the debtor’s default is considered as collateral interest. Much trouble has been caused by mortgagees attempting to transfer only one of these two interests. Where the mortgagee has “transferred” only the mortgage, the transaction is a nullity and his “assignee,” having received no interest in the underlying debt or obligation, has a worthless piece of paper.

      Regarding #1, the debt is the loan contract (i.e. the promissory note). Promissory notes are governed by the Uniform Commercial Code (UCC) Art. 3 (Negotiable Instruments). The UCC is a uniform law adopted by every state. In addition to promissory notes, negotiable instruments include checks. Like a check, you must negotiate (deliver with proper endorsements) the promissory note to another for that person to claim ownership of the promissory note. Absent proper negotiation of the note, another party cannot claim ownership. So, for example, you find a check made payable to someone else and it is not endorsed to you; you cannot cash it because you are not the owner.

      Regarding #2, the security on the debt (i.e. mortgage or deed of trust), is a contractual interest in land with the home buyer designated as the mortgagor and the lender/creditor as the mortgagee. Because a mortgage/DOT is an interest in land, the Statute of Frauds requires such contracts to be in writing and signed to be enforceable. Any assignment of a mortgage or deed of trust must be in writing and signed to be enforceable. Agreements that violate the Statute of Frauds are void and unenforceable as contracts. There are some exceptions to the Statue of Fraud’s writing requirement including an admission in court and under oath “by the party to be charged” that there is a contract (this can be done via discovery). So, as is the case with most mortgages, they are sold by the originating bank (or mortgage company) to either Freddie Mac or Fannie Mae. This is known as the “secondary mortgage market” (secondary, since Freddy and Fannie don’t originate the loans but buy them up from the banks and mortgage companies that do). According to Freddie Mac’s website:

      Every day, Freddie Mac provides a continuous flow of funds to mortgage lenders. We do so not by making individual mortgage loans to consumers; instead, we support the U.S. home mortgage market by providing money directly to lenders, ensuring that the system is liquid, stable and affordable. To fulfill this vital mission, Freddie Mac buys residential mortgages and mortgage-related securities and guarantees mortgages made by lenders. We issue debt securities to the global capital markets to fund the purchase of mortgages and mortgage-related securities we hold as an investor. We also create and sell mortgage-related securities to the capital markets, providing a guarantee to investors on those securities.

      Freddie Mac pools the mortgages it purchases from lenders across the country and packages them into securities that can be sold to investors. These investors include the lenders themselves, pension funds, insurance companies, securities dealers, commercial and central banks, and others. Freddie Mac also is one of the largest investors in mortgage-related securities, purchasing and holding in portfolio a portion of our own securities and those issued by others.

      If Freddie or Fannie truly “own” your mortgage, they have “legal title” to the property and are the “real party in interest” to foreclose.

      However, this brings me to an issue raised by Professor Dale Whitman in his article, “How Negotiability Has Fouled Up the Secondary Mortgage Market, and What To Do About It,” 37 Pepp. L. Rev 738, 757-758 (2010):

      While delivery of the note might seem a simple matter of compliance, experience during the past several years has shown that, probably in countless thousands of cases, promissory notes were never delivered to secondary market investors or securitizers, and, in many cases, cannot presently be located at all. The issue is extremely widespread, and, in many cases, appears to have been the result of a conscious policy on the part of mortgage sellers to retain, rather than transfer, the notes representing the loans they were selling.

      This “policy” was created by Freddie and Fannie and clouds who actually has legal title to the property (i.e. mortgagee) and who “owns” the note.

      First, as noted above, it is important to understand that a mortgage contract is an interest in land and, as such, must be in writing to be enforceable per the Statute of Frauds (or fall within one of the exceptions such as an admission in court). Any “sale” or assignment to Freddy or Fannie must also be in writing per the Statute of Frauds. Some states (like Ohio) require such transfers to be recorded. If you are challenging a foreclosure action, the mortgagor (borrower) should ascertain if a servicer (loan originator or its successor) has sold the mortgage to Freddy or Fannie. This can be done on line at either:

      Chances are Fannie or Freddie “own your mortgage.” If you are in litigation, you should follow up with targeted discovery requests to the servicer confirming the servicer does not “own” your mortgage. Moreover, you should inquire and demand any records showing Freddie or Fannie assigned the mortgage to the servicer. Servicers will point to Freddie or Fannie servicing guidelines which basically provide that the servicer forecloses in its (the servicer’s) own name. Given a mortgage is an interest in land and the requirement under the statute of frauds that such contracts be in writing, the servicer’s standing to foreclose can be challenged absent some proof that the mortgage was specifically assigned by Freddie or Fannie to the servicer. Legally, Freddie and Fannie must assign back the note to the servicer. In fact, Freddie has a specific form 105 to do so.

      See: [Sections 66.17 and 66.54].

      However, Freddie and Fannie’s guidelines have evolved over time and you may find that there is no such assignment in most cases. Unless there is a written assignment from the mortgage owner (Freddy or Fannie) to the servicer, the servicer cannot foreclose for the simple reason they are not part of the mortgage contract. Simply put, only the mortgage owner can foreclose on the mortgage contract. Moreover, if the assignment of the mortgage is invalid or fraudulent, then there is a “cloud on title” which should be identified by title and mortgage insurers.

      Second, according to Powell on Real Property section 37.27 (quoted above),

      It must be remembered that the mortgagee has two interests: (1) the debt or obligation which is owed to him, and (2) the security interest in land represented by the mortgage …. In fact, the primary interest is the personalty debt obligation. The interest in land which is available in case security is necessary because of the debtor’s default is considered a collateral interest. Much trouble has been caused by mortgagees attempting to transfer only one of these two interests. Where the mortgagee has “transferred” only the mortgage, the transaction is a nullity and his “assignee,” having received no interest in the underlying debt or obligation, has a worthless piece of paper.

      Given what Professor Whitman describes as a “conscious policy on the part of mortgage sellers to retain, rather than transfer, the notes representing the loans they were selling,” it would appear that any alleged “sale” of the note or mortgage to Freddy and Fannie is a fraud. By analogy, you cannot cash a check that is not in your possession or that is not made payable to or endorsed to you. Not only is the sale of the note a sham where there is no delivery and/or endorsement of the underlying loan/note to Freddie or Fannie, if their records (per the website) “show that Freddie Mac is the owner of your mortgage”, then the unity of interest (i.e. loan/note and mortgage/security must be transferred together) is destroyed leaving Freddie and Fannie with nothing.[1]

      This begs the question: why would Fannie and Freddy have such a policy given the laws governing mortgage contracts and promissory notes? Consider the fact that Freddie and Fannie are Government Sponsored Entities [GSEs] albeit private corporations owned by the major banks. It seems to me that Freddie and Fannie have been hijacked by the major banks and are being used to buy up bad mortgages and then seek a bailout from the taxpayers.[2]

  46. great information – many thanks for posting! I am engaging in a quiet title action and so it would appear from your post that the defendant should be required to produce the original Note and the original DoT, right? Freddie Mac told me the bank has the docs but they refuse to surrender them or even provide color copies…

      • Thanks – I sent a QWR last year, and then a follow up after 60 days but they would not give me a color copy of anything. Then I offered to pay the loan in full and still they would not provide the color copies. I also offered to pay the costs of providing those color copies – nothing. Just sent another QWR this week with a Notice of Intent to Sue, but I think I will re-write the Notice of Intent, explain the complaint, give them opportunity to cure, send a quitclaim deed with money order, and have the whole package process-served on them. That should get their attention, right? In the meantime, I am current on my “loan”

  47. Pingback: DEFICIENCY JUDGMENTS – Is your Court a Collection Agency for Crooks? Class Action Filed in Hawaii. | Deadly Clear

  48. Pingback: DEFICIENCY JUDGMENTS – Is your Court a Collection Agency for Crooks? | My Debt Release news

  49. Accounting, no doubt is a very interesting subject. Lending institutions, for example, look for clues
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  50. Please let me know if you can find any information regarding my loan 3062977321 is dated 6/28/2005. The information about the loan from SPS servicing is this: U.S Bank NA,successor trustee to Bank of America, NA,successor in interest to LaSalle Bank NA, as trustee, on behalf of the holder of the WaMu Mortgage ass Through Certificate, Series 2006-AR11 is the owner of the account, and SPS is the mortgage servicer of the account.
    I wounder if my loan was also duplicated, didn’t make it to the trust except it’s application, was it satisfied by the bank mortgage insurance 90 days after it defaulted? was the chase purchase legal?

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