Expert Witness Testimony Example – Neil Garfield LivingLies

Excellent Analysis on a Securitized Loan from Neil Garfield LivingLies

“The note signed by said borrower and the mortgage-backed bond accepted by the investor who purchased said security are both evidence of the obligation. The Deed of Trust is intended to be incident to the note and possibly incident to the bond, if the chain of title was perfected. The Payee on the note and the payee on the bond are different parties. The bonds were issued with three principal indentures: (1) repayment of principal non-recourse based upon the payments by obligors under the terms of notes and mortgages in the pool (2) payment of interest under the same conditions and (3) the conveyance of a percentage ownership in the pool of loans, which means that collectively 100% of the investors own 100% of the the entire pool of loans. This means that the “Trust” does NOT own the pool nor the loans in the pool. It means that the “Trust” is merely an operating agreement through which the investors may act collectively under certain conditions. Accordingly, it is my opinion that the parties with standing in relation to a securitized loan are the debtor/borrowers and the creditor/investors. This would be further corroborated if, as a matter of fact, the investment banker followed industry standard of selling the mortgage backed security FORWARD. “Selling forward” means that the security was sold and the money was collected before the first loan was funded on behalf of borrowers. However, even if the investment banker had not closed the sale of the securities with investors before accepting applications for loans, it would have been on the basis of an expectation of said funding. Ultimately, in all securitized loans there is really only one transaction — a loan from the investors to the homeowner. Without an investor there would be no loan; conversely without a borrower there would be no investor or investment”.


Expert Witness Testimony Example – Neil Garfield LivingLies

One Response to “Expert Witness Testimony Example – Neil Garfield LivingLies”
  1. msoliman says:


    The loans are pooled and lost forever to the seller.The pool represents a certain high balance asset valued a multiple of annual revenue and paid on a 30 day cycle.

    Vast consumer payments are collected by a servicer and one single payment is forwarded to the investment Trust owned by a ReMIC or REIT.

    The ownership is disguised to shelter it from being identified. It was an FDIC member (FSB) under the OTS The investment registrants capitalized these investment’s with tax payer deposits.

    Each loan is pooled and thereafter lost or no longer recognized by the master servicer. Therefore the misnomer is that each loan passes through to a designated investor.

    The lender is the seller and depositor who uses its collateral to raise valuable capital and multiple not available from a retail or even whole sale member bank deposit base.

    The lender pays a monthly dividend that lives and dies by the loans they come to rely on. The payment is really just a dividend to the investors.

    What gets delivered into a trust as a borrower loan can only come out as a demand for payoff or by going to term. It is otherwise liquidated within the trust structure. Your loan cannot be unraveled from a delivery into a trust.

    Unraveling a trust asset requires compensating balances as in “demand for pay off and boarding a loan that mirrors the early prepayment.

    To accomplish compensating balances necessary to repurchase and foreclose are near impossible and violates any economic logic.

    There cannot not be a foreclosure and that is verifiable from
    1) basis accounting (accrued cost) in assets
    2) compensating balances for purposes of consideration
    3) charges and pay downs from, over-collateralization, recourse and insurance
    4) the deed or mortgage is verifiable as lost to the trust and registrants where the note stands as a moral obligation.
    5) You cannot originate, deliver and micoro mange assts in a trust without violating FAS 140 and other critical accounting violations.

    There is no middle ground or in between to compromise for short sales, modifications negotiated settlements and so forth.


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