Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Servicers Lined Up for Securitization

9 March 1992
Thrift Liquidation Alert Harrison Scott Publications, Inc.
Vol. 4, No. 10E

To help streamline its mortgage-backed securities output, RTC plans to prequalify a group of loan-servicing firms to handle securitized mortgages.

The agency's new securitization adviser, Prudential Securities Inc., is helping plan the prequalification effort. The aim is to assemble two servicing groups - one for single-family loans and another for multi-family and commercial mortgages.

About 50 firms are expected to receive invitations to bid. In addition to meeting other criteria, the servicers can only be prequalified if they meet the approval of the major credit-rating agencies. Since maturities on pooled mortgages can be 15 to 30 years into the future, the agencies look for financial strength, or staying power, in loan servicers. A mortgage- backed securities issue is considered to be only as strong as its "weakest link," which can be the servicer.

Kenneth J. Bacon, assistant director in charge of RTC's securitization program, plans to hire servicers one at a time for issues coming up in the near future. But after that, he hopes to choose from the stable of prequalified servicers.

It's not yet clear whether the agency will prequalify both master servicers, which only process loans that are performing well, and special servicers, which handle loans that become delinquent.

In the first commercial mortgage-backed securities issue, which closed earlier this month, Security Pacific National Bank was master servicer and Equitable Real Estate Investment Management Inc. was special servicer.

As of last week, Bacon was awaiting Securities and Exchange Commission approval of RTC's registration statement for the agency's second commercial mortgage-backed issue, 1992-C2. Salomon Brothers Inc. will lead-manage that deal, which is expected to come to market later this month.

Meanwhile, proposals were due last Friday from securities firms wishing to be part of RTC's expanded underwriting group. Bacon intends to line up a total of 10 firms to manage mortgage- or asset-backed securities issues. That probably means another three will be added to the seven current underwriters: Salomon; Bear Stearns & Co.; First Boston Corp.; Goldman, Sachs & Co.; Kidder, Peabody & Co.; Lehman Brothers Inc., and Merrill Lynch & Co. The seven must compete for spots in the new group, but should have a decided edge over newcomers.

Selected firms will be placed into as many as four subgroups to handle specific types of securitized deals: Residential mortgages (including one- to four-family and multi-family); commercial mortgages; consumer loans (including manufactured housing contracts, auto loans, boat loans, second mortgages and credit card receivables), and subordinated mortgage securities.

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Good Post....

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Remember, it was George Bush Sr. who set up the Resolution Trust Corporation to bail us out in the last S&L crisis (which the press is VERY careful not to call this), so it’s not a big leap of faith to imagine that Jr. would cotton to an idea that kept so many of his Daddy’s friends out of jail. Also, please remember that the Resolution Trust Corporation was another way to pull hundreds of Billions of off-budget dollars out of the hands of the people and hand it to the wealthy, even though fraud was discovered in 60% of the thrifts seized by the federal government in 1989.

Another nice bonus when you get "emergency" powers to set up a $350B corporation is you get to staff it with your cronies who can then do your political dirty work, even after you are out of office. This is such a huge bonus that one might even be tempted to foment a crisis in order to be assured you would be granted extra-ordinary powers, but that’s the kind of stuff you only find in spy novels…

Resolution Trust Corporation (RTC)


A corporation formed by Congress in 1989 to replace the Federal Savings and Loan Insurance Corporation and respond to the insolvencies of about 750 savings and loan associations. As receiver, it sold assets of failed S&Ls and paid insured depositors. In 1995 its duties, including insurance of deposits in thrift institutions, were transferred to the Savings Association Insurance Fund.

http://en.wikipedia.org/wiki/Resolution_Trust_Corporation
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