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Tuesday, December 18, 2018 9:53:56 AM
I wanted to shed light on this topic and separate DD pertaining to this topic.
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Per Neil Garfield’s podcast as of December 13, 2018:
Listen to the whole 30 minute podcast!
http://www.blogtalkradio.com/neilgarfield/2018/12/13/the-loan-is-the-essential-fallacy-splitting-up-the-debt-note-and-mortgage
“Here is what almost everyone is getting wrong and why it matters:
In the run up to the mortgage meltdown, investment banks were described as taking foolish risks, buying loans that were likely or even guaranteed to fail. It’s true, some investment banks that were not in on the grand scheme did exactly that and Lehman might have been one of them, Bear Stearns another.
But for the TBTF banks it was a different story. They were not lending money nor buying mortgage loans. They were funding the origination of loans likely or guaranteed to fail with incoming investor money that was intended by the investors to buy good quality loans that were seasoned by some period of time in which payments were made by the borrower. They were purchasing loans the same way. And they were not buying derivatives, they were selling them. SO the entire “bailout” was a farce. There were no losses.
Why does this matter?”
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Per Lloyd Blankfein from the 2010 Congressional Subcommittee hearing:
https://www.hsgac.senate.gov//imo/media/doc/Financial_Crisis/FinancialCrisisReport.pdf?attempt=2
PDF page 390 of 646:
“
The evidence reviewed by the Subcommittee shows that some of the transactions leading to Goldman’s short positions were undertaken to advance Goldman’s own proprietary financial interests and not as a function of its market making role to assist clients in buying or selling assets. In the end, Goldman profited from the failure of many of the RMBS and CDO securities it had underwritten and sold. As Goldman CEO Lloyd Blankfein explained in an internal email to his colleagues in November 2007: “Of course we didn’t dodge the mortgage mess. We lost money, then made more than we lost because of shorts.”1551”
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https://www.boardpost.net/forum/index.php?topic=3044.msg233891#msg233891
“IMO...my conclusions as of November 03, 2018:
1) The underwriters (Morgan Stanley, Credit Suisse, Goldman Sachs), didn’t settle their claims (per the “underwriters stipulation” on March 28, 2013) until after POR7 was approved (March 19, 2012).
2) Per the the “underwriters stipulation” on March 28, 2013, the underwriters didn’t want Class 18 claims of $24 million. Instead, they settled for Class 19 claims of $72 million.
3) if the underwriters wanted cash, they would have opted for Class 18, which is paid before Class 19, and is more likely to be paid than Class 19 claims.
4) what the underwriters settled for was a Class 19 claim that is less likely to be paid than a Class 18, and they would have to wait a lot longer.
5) it’s obvious the underwriters know exactly the risk and probability of claims being paid out, and even a lower value of $24 million Class 18 claim is better than waiting for an unknown duration of time for a Class 19 claim.
6). IMO...These underwriters know exactly how long it will take the FDIC to unfreeze the bankruptcy remote assets (i.e. MBS Trusts) after the bankruptcy cases are closed. And the underwriters know exactly how much is waiting to be returned to Class 19 WMI Escrow Marker Holders from the MBS Trusts.
7). I believe that the underwriters probably know that Class 18 and Class 19 would probably get paid in close proximity of time from each other, if one knows the process and speed and magnitude of how much the FDIC will unfreeze in bankruptcy remote assets.
8. IMO...remember, these same underwriters have underwritten many other MBS Trusts for other failed banks in the past and they know the process, and know how to get paid from bankruptcy remote MBS Trusts.”
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IMO...conclusions as of December 18, 2018:
I think the underwriters (i.e. Goldman Sachs, Morgan Stanley, Credit Suisse) who underwrite originating loans and securitized loans in MBS Trusts have set up a system that intentionally expects high risk loans to fail (house of cards) and underwriters reap the profits by quadruple dipping!
Single Dipping : the underwriters get paid from initially underwriting originating loans
Double Dipping : the underwriters get paid from underwriting securitized loans
Triple Dipping : after securitizing the loans and selling securities to their clients, underwriters then shorted the MBS securities that they just sold to their clients (thus the underwriters are hoping the loans will default)
Quadruple Dipping: when the loans do default and then foreclosed on, the foreclosed properties are auctioned off. The ones who cash the check from the auctioned properties are the underwriters, not the servicers, or the trustees. Since the trustees of the securitized loans were given replacement good performing loans by virtue of the repurchase agreements. Since the servicers are not the rightful owners of the securitized loans, they aren’t allowed to cash the proceeds of the foreclosed properties either.
The old mantra : “follow the money” is the point I’m making. There is an intentional defective chain of title with all of the securitized loans, so if and when they default the underwriters are the ones that reap the ultimate benefits. The underwriters have invented a “no lose” scheme that everyone is entrapped in.
And guess what the underwriters also owns?
They own Class 19 Equity Claims just like you and me!
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