http://market-ticker.org/akcs-www?post=168176
A little classic Karl, doing what Karl does best
Interpreting the bullshit that others spew.
From Twitter:
Gross: In many cases the servicers also originated the mortgage loans: This may lead to potential conflicts in interpreting foreclosure law.
Interpreting?
Let's talk about that a bit, and rehash some of the things that I've been hollering about since 2007.
Let's specifically talk about REMICs and MBS.
Let's talk about whether the notes - wet-ink signatures - were properly conveyed from the originators (or more-properly, the warehouse funders who are in fact the servicers most of the time) to the MBS Trusts (the REMICs.)
Let's talk about the Pooling and Servicing agreements - public documents filed with the SEC - which all said that those notes were conveyed at the time of the funding and formation of the Trust. That would mean that if they weren't the investors who bought those MBS were bamboozled. In common parlance one might call that "Securities Fraud", since that would leave the buyer holding an empty box for which they paid good money, and at best they got an unsecured note (and at worst they got nothing!)
Let's talk about IRS code, and the requirement that those conveyances (and in states where required, recorded conveyances) happen, and the iron gate that bars the REMIC from taking in new assets once that time period has expired, lest its "pass-through" (that is, non-taxable) status be retroactively voided.
Let's also talk about the IRS code provisions that make it non-permissible for a REMIC/MBS Trust to take in a non-performing asset.
Between these two provisions a failure to convey, once beyond 90 days or so when the closing date of the MBS passes, becomes essentially impossible to cure. Therefore, trying to "fix it" once a loan defaults and is headed to foreclosure is quite-literally impossible (other than by counterfeiting documents to show assignments and transfers that never actually happened, that is.)
It is my belief that these "problems", rather than "shortcuts", are why we're seeing all these allegedly-fraudulent backdated assignments and other similar games when foreclosures happen.
Could you address these issues Bill, with particular attention paid to PIMCO's trading in these MBS and what you might know - or suspect - about this?
After all, you are the "Bond King", and I suspect that the rapt viewership of CNBS would love to hear your explanation for what are now cascading claims being filed in real courts with regard to these "minor technicalities."
