“ROYALTY” FEES FOR USE OF
THEIR NAME UNDER SCRUTINY
Investors are starting to get restless as
they see what is left of their “equity” in the MBS deals they advanced money to
buy, dwindling to zero. They are onto the game and the pension fund and other
fund managers responsible for the purchase had best start acting to protect
their pensioners or they will find themselves in the same position as the so-called
trustees of what are now emerging as non-existent trusts for pools of money
that have nothing but the investor money in them as assets and no loans.
Let’s first get our terms straight so you
know who the players are and what they do. Start at the beginning:
1. Working
people get a pension benefit that vests to them after a certain number of years
of employment. Sometimes they contribute to the fund themselves, and sometimes
it is entirely funded by their employer.
2. Those
contributions are then aggregated into a fund which often is an entity unto
itself — like a corporation, LLC, Trust etc. organized and existing under
the laws of the state where the pension fund is located.
3. A fund
manager is hired to invest those funds to assure that the balances keep up with
inflation and so forth. Usually there are restrictions as to what kind of
investments the fund manager is allowed to buy for the fund, whose purpose is
to give the pensioners, the monthly payment they are expecting when they
retire.
4. The
hired fund manager could be an individual or a company. If it is a company then
some person who works at the company is appointed to take care of that fund and
perhaps some others.
5. Usually
when the media speaks of “investors” they mean the pension funds or other types
of funds under management that constitute qualified investors because they are
professionally managed by people of financial sophistication and they have a
lot more money than the average Joe so they can check things out pretty
carefully. When you have $1 billion under management, it doesn’t take much to
spend $50,000 checking out a potential investment.
6. So
“investors” are basically conduits through which the money funding pensions and
the money paying pension benefits are processed, managed and invested. The real
people who are affected by the performance of the fund manager are those people
who worked for their pension benefits.
7. The fund
manager is usually paid for performance and hired and fired on the same basis.
If the fund balances are properly maintained and the investments are all AAA
and were checked out by the fund manager, they avoid most of the tricks and
scams that Wall Street is always generating.
8. So the
fund manager, in order to preserve his employment, compensation and bonuses
(everything on Wall Street is about bonuses) has a vested interest in managing
the information that reaches the media and members of the fund. If there is a
Board of Directors or other overseeing body they should be checking under the
hood as well to make sure that the fund manager is investing according to the
rules and make sure that the fund manager is not embezzling funds.
9. Thus
fund managers who invested heavily into MBS Mortgage Bonds or other MBS
products that carved up and pooled debts arising from student loans, credit
cards etc, all with AAA ratings from the rating agencies, are now sitting on
some liabilities that they don’t want to report because if they do, then they
will probably lose their bonus, job or other compensation.
10.
Enter the MBS Trustee seen often as Deutsch
Bank, as Trustee for series abcnde-2005a. As Reynaldo Reyes has stated in taped
interviews, the function of Deutsch Bank is to do nothing. Only the servicer
calls the shots, along with instructions from other entities created by the
investment banks in order to put layers between them and the acts that caused
all this mess. See organized crime structure as the model for what Wall Street
did.
11.
The fund managers for the pension funds
(investors) are actually representing real people who are expecting their
pension benefits. So now some of them are looking to the MBS Trustee to ACT
like a Trustee and ACT like they care what happens to the investors (pension
funds) and all the pensioners depending upon that fund. But the same disdain
and contempt that has been shown to homeowners in foreclosure is being
displayed against the pensioners. They are the “little people” who in the
culture of Wall Street “don’t count.”
12.
Many fund managers were duped by several
attributes of these bogus MBS Bonds. The AAA ratings were a big factor as was
the presence of the largest banks in the world acting as “Trustees.” The
Trustees’ deal with Wall Street was to get paid a fee so their name could be
used in foreclosures and other transactions. That is why the actual Trust Departments
of the same banks serving as MBS Trustees don’t have anything to do with the
MBS Trusts. Besides the fact that the Trusts probably don’t exist at all, the
deal was that the MBS Trustee would be completely insulated from all the actual
workings of the securitization chain.
13.
Recent case decisions are pointing
the way toward holding the MBS Trustees liable for their inaction. That is what
Biden And Schneiderman are looking into as well, to see if laws were broken
with those deals. Of course laws were broken. The MBS Trustee was advertised as
a Trustee with fiduciary duties. Neither the Trust nor the duties actually
existed, and even if they did the MBS Trustee had no intention of doing
anything because that wasn’t the deal. [You might want to look at both the
original Trustee on Deed of Trust and the "substitute Trustee" for
additional potential liability --- to borrowers.]
At the end of the day, everybody knows
everything. I first heard that on Wall Street of all places but they keep
forgetting their own little axioms. The MBS Trustees like Deutsch, US BANK,
etc. have long been known to be doing absolutely nothing. The purpose of using
their name was to provide window dressing: a big name like HSBC is more likely
to be taken seriously than some unknown title agent, which is why in the
non-judicial states that ALWAYS have a substitution of trustee. The other
reason is that the original trustee would insist on performing the due
diligence that the statutes require and oops, they are not going foreclose on property
at the instruction of someone who is out of the chain of title.
Biden of Delaware and Schneiderman of New
York, both Attorney generals in the center of the securitization playground,
are now looking at one of the weakest links in the Great Securitization Scam —
i.e., the claim that securitization happened when it didn’t. The fact is that
the parties took the money as though the securitization documents were followed
but they didn’t have the the loans, transfer documents, mortgage documents, or
for that matter even a conforming mortgage that was an actual lien on anyone’s
property.
