THE ANSWER There are thousands of opinions floating around as to why we are in the financial mess that we are in.
As life provides an un-usual twist, it is human nature for the majority to analyze and look for the cause of events.
Even a slowdown in traffic on the Interstate causes a backup for miles and I'll just bet that everyone is thinking "accident".
That happens to be the nature of the beast.
Now, let's look at the financial mess we are in.
I could write volumes on whose fault it is.
Sure, the poor "un-educated" homeowner should not have purchased a home that he couldn't afford.
But, maybe, just maybe the greed of the realtor, the mortgage broker, the lender and finally the game of chess on Wall St are all a part of the puzzle.
The media is focusing on finding the thieves on Wall St and bringing them to justice.
But, the maze of fraud is woven so deep into the mesh that it might not be politically correct to prosecute.
Yet, we the public are still paying the bill.
As, an example.
When the government got the approval from both parties to provide additional funding in the billions to bail out AIG, does anyone really understand where the money went to and where it came from.
The money came from you the American people.
It went into the checking account of AIG for the sole purpose of paying the investors (certificate holders) of the problem loans the full amount of the loan so that the investor never lost a dime.
In other words, we the people never got any benefit for giving AIG those billions of dollars.
It was a game to make all politicians look good under the auspices that, unless we bailed out AIG the financial world would go upside down.
The truth of the matter was, if we failed to provide AIG the money, the investors would end up with defaulted loans and their only means of recovering would be to foreclose, sell the house and adjust their losses.
But, the manner in which these characters set up the flow of dollars and how the mortgage loans were securitized didn't work that way.
Do you remember anyone trying to get a loan modification being told that they must be at least three months late on their payments before the bank could do anything.
That was "crap".
The reason that they were told that was because when the loan is (90) days delinquent, it triggers an automatic credit default swap in which the insurer pays the FULL AMOUNT of the loan to the investor that purchased investment certificates in the trust.
How ironic, that banks would not modify loans until the insurance kicked in.
Now, here is the very juicy part.
The insurer put up the money for un-secured debt instruments.
If, this is the case, where did the mortgage and the note get separated so that the note was now un-secured.
Okay, let's look at the typical foreclosure.
Tom and Judy are foreclosed on by someone claiming to own the note and mortgage.
It is now coming out that a lot of these pretender lenders purchased a machine that recreates a signature in wet blue ink.
The machine is called "Automated Signature Technology © 2006" and is in use by many banks.
From the closing table, all of the way into the Trust providing the funds from the investors, all parties were paid a brokers fee.
In most cases it was termed a SRP or service release premium.
It usually amounted to 2 ½%.
Most folks in the mortgage and real estate business confused this with the YSP or yield spread premium.
Now, when you understand this that all parties to the event were paid as brokers, then the only party with a claim of ownership or interest in the debt was the investor.
So, how can anyone claim that they own the note and mortgage? Impossible.
Yet, as, I explained above the insurer provided funds in the event of a default on an UN-SECURED instrument.
How can this happen and what does this do to the chain of title.
I have tried to un-ravel this mystery and there is a lot more to the puzzle.
One of the things that is happening in our courts is that the investors are suing all parties except the homeowner because they were induced to invest millions into fraudulent mortgages.
Yes, indeed, the lenders coerced the credit rating agencies to rate problem debt instruments into strong bond ratings.
This gave the investors the green light to go ahead and purchase these certificates.
As the mess began to unravel, the lenders then blamed the credit rating agencies, such as Standard and Poors & Moodys for the problem.
Now when you come back to today's world.
We see the homeowner being foreclosed on by someone that doesn't own the note and retaining a foreclosure mill law firm that we already know what happened.
Let's talk about the David Stern, Florida Default Law Group the Marshall Watson Group and many others that are being investigated by the Florida Atty Generals office.
Add this all up and the fire gets hotter and hotter.
The only winners in this scenario are the attorneys.
A new cash flow source has emerged.
The unfortunate part is that there are not enough attorneys to understand the complexity of this puzzle and most tragic is the fact that the homeowner doesn't have the resources to retain competent counsel.
Hence, we have the majority of foreclosure ruled on where the bank does not own the note and the homeowner is not represented.
Is this unjust enrichment? Yes it is.
What is the answer? I believe that filing a quiet title action because fraud is involved and the consumers title was bi-furcated at the closing table, his title was clouded when the mortgage was closed.
Presently, Florida Statues require a (5) year period before a quiet title action can be filed.
BUT, there is growing evidence and thought that the present Statute does not apply when fraud is involved.
Regis Sauger Author/Speaker August 4,2011