Ever since the 2008 implosion that was created by the TBTF banks, investors have awakened to the fact that the mortgage bonds in their portfolio are worthless. They are worthless because they were issued by a nonexistent REMIC Trust that has never been activated by the receipt of cash from the sale of those securities.
So the Trusts were unable to fulfill their one basic function — acquisition of high-grade mortgages. Instead the money was used or originate mortgages without the use of the Trust as Real Estate Mortgage Investment Conduit (REMIC). And the mortgages that were originated were mostly fatally flawed in their underwriting and fatally flawed in their execution.
Caught with their giant hands in the largest cookie jar ever imagined, the banks negotiated with investors who still don’t want to tell their pensioners or investors that there isn’t enough…
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