http://www.bloomberg.com/news/2010-10-14/bank-of-america-re-remics-reduce-mortgage-debt-as-basel-capital-rules-loom.html
Oh now is a nice time to try to cover your ass Bank of America.
What would that extra layer of protection actually be,assigning the titles
instead of leaving them blank?
And just exactly how did you fix all of those blanks, that your once again trying to pass off?
It would behoove you at this point to just swallow your own debt rather than furthering the criminal charges against you!
Bank of America Corp., seeking to reduce risk and meet new capital standards, upgraded billions of dollars of distressed mortgage bonds by repackaging them into new securities using a variation of a Wall Street technique that failed during the credit crisis.
The transactions, known as re-remics, are designed to add a layer of protection to residential mortgage-backed securities that sustained losses, enabling them to regain investment-grade ratings. The strategy helped the bank pare its RMBS holdings by $5.2 billion in the second quarter, or about 15 percent, according to a company filing
‘Scrubbing’ Balance Sheets
‘Toxic Waste’
Financial Engineering
In a re-remic, the senior mortgage bonds that have lost their investment-grade ratings are placed in a new trust, which issues a new set of senior and junior securities, with the higher-ranking bonds receiving first rights to cash flows from the original home loans. The junior securities in the re-remics provide an additional layer of protection to the cushion created by subordinated bonds from the original securitization. They’re second in line to bear any losses, which means more senior investors wouldn’t suffer any damage unless the junior securities were wiped out.
Showing posts with label REMICs. Show all posts
Showing posts with label REMICs. Show all posts
Thursday, October 14, 2010
Sunday, October 10, 2010
THE SiGNiNG… Or, Pardon me, Mr. Banker, but your REMIC is showing
http://mandelman.ml-implode.com/2010/10/the-signing-or-pardon-me-mr-banker-but-your-remic-is-showing/
This is what Repo 105 was all about?
I didn't understand at the time why it would be seen as a legally acceptable practice.
It's very clear now, why that was just so widely accepted.
It was an additional money maker all the way around.
An industry known accepted practice.
What did the financial commission do when this came out in open testimony?
Absolutely NOTHING
Missing the Assignment…
But none of that, the A to B to C to D stuff, or lets say very little of it, was done. And as a result, the loans were never assigned to the trusts. We know that because that’s what the robo-signers are trying to cover up.
So, the question should be WHY? Why didn’t the bankers go to the trouble of properly assigning the loans to the trusts? I have to believe that the Wall Street crowd knew their alphabet, at least to the letter “D,” even if they did have to sign the song in order to remember it. So, why didn’t they do it right the first time.
There are several opinions about why this wasn’t done; I’ve asked around and heard several theories. Many say the Wall Street bankers were just too busy selling the loans over and over to trouble themselves with the real estate paperwork, but I can’t buy that. Not all of the banks would have been too busy and unconcerned about such paperwork at the same time.
A friend and business associate of mine, who spent more than two decades as a US Attorney, suggested that there had to be a benefit, some reason that they didn’t assign the loans to the trusts, and that led me to one place: the “repo agreements”. Last year, I read the book about what happened at Bear Stearns and the one thing that never resolved itself in my mind were called “repo agreements”. I never totally got what they were all about, but as soon as I heard “there has to be a benefit,” the repo agreements went DING!
In our lives, “repo” means repossession, but I remembered that at Bear Stearns the term “repo” was being used to mean “repurchase”. And I remembered that because I hate it when people play games with the English, unless it’s their second language.
So, I remembered reading about how the guys at Bear were leveraging something in order to juice their returns, and they were using these repo agreements to do it. They worked something like this: Bear would borrow money and pledge assets as collateral in the repo agreements, and the deal was that they’d buy the assets back at a certain date at some fixed or variable interest rate.
I remember thinking… well, that’s pretty much how a pawn shop works, no? Why don’t they just say that… they pawn their assets?
So, why didn’t the bankers assign the loans to the trusts? I don’t know… for sure. But I’m going to go out on a limb here and tell you it’s because they wanted to borrow against them, and once assigned to the trust, they wouldn’t be able to pledge them in a repo agreement and thereby get the cash they needed to invest and juice their returns with borrowed money. They like to call it leverage, but leveraging assets you really don’t own, in order to borrow money and invest it… well, it doesn’t sound like something that’s strictly legal… although again, I’m not entirely sure
This is what Repo 105 was all about?
I didn't understand at the time why it would be seen as a legally acceptable practice.
It's very clear now, why that was just so widely accepted.
It was an additional money maker all the way around.
An industry known accepted practice.
What did the financial commission do when this came out in open testimony?
Absolutely NOTHING
Missing the Assignment…
But none of that, the A to B to C to D stuff, or lets say very little of it, was done. And as a result, the loans were never assigned to the trusts. We know that because that’s what the robo-signers are trying to cover up.
So, the question should be WHY? Why didn’t the bankers go to the trouble of properly assigning the loans to the trusts? I have to believe that the Wall Street crowd knew their alphabet, at least to the letter “D,” even if they did have to sign the song in order to remember it. So, why didn’t they do it right the first time.
There are several opinions about why this wasn’t done; I’ve asked around and heard several theories. Many say the Wall Street bankers were just too busy selling the loans over and over to trouble themselves with the real estate paperwork, but I can’t buy that. Not all of the banks would have been too busy and unconcerned about such paperwork at the same time.
A friend and business associate of mine, who spent more than two decades as a US Attorney, suggested that there had to be a benefit, some reason that they didn’t assign the loans to the trusts, and that led me to one place: the “repo agreements”. Last year, I read the book about what happened at Bear Stearns and the one thing that never resolved itself in my mind were called “repo agreements”. I never totally got what they were all about, but as soon as I heard “there has to be a benefit,” the repo agreements went DING!
In our lives, “repo” means repossession, but I remembered that at Bear Stearns the term “repo” was being used to mean “repurchase”. And I remembered that because I hate it when people play games with the English, unless it’s their second language.
So, I remembered reading about how the guys at Bear were leveraging something in order to juice their returns, and they were using these repo agreements to do it. They worked something like this: Bear would borrow money and pledge assets as collateral in the repo agreements, and the deal was that they’d buy the assets back at a certain date at some fixed or variable interest rate.
I remember thinking… well, that’s pretty much how a pawn shop works, no? Why don’t they just say that… they pawn their assets?
So, why didn’t the bankers assign the loans to the trusts? I don’t know… for sure. But I’m going to go out on a limb here and tell you it’s because they wanted to borrow against them, and once assigned to the trust, they wouldn’t be able to pledge them in a repo agreement and thereby get the cash they needed to invest and juice their returns with borrowed money. They like to call it leverage, but leveraging assets you really don’t own, in order to borrow money and invest it… well, it doesn’t sound like something that’s strictly legal… although again, I’m not entirely sure
Monday, October 4, 2010
Oh BILL! BILL GROSS! Calling You Out Dude
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."
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."
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