Man Makes Ridiculously Complicated Chart To Find Out Who Owns His Mortgage (CHART)

We all know the mortgage securitization process is complicated.

But just how complicated? The chart below from Zero Hedge shows the convoluted journey a mortgage takes as it morphs into a security.

Dan Edstrom, of DTC Systems, who performs securitization audits, and who is giving a seminar in California next month, spent a year putting together a diagram that traces the path of his own house's mortgage. "Just When You Thought You Knew Something About Mortgage Securitizations," says Zero Hedge, you are presented with this almost hilariously complicated chart.

A controversy of allegedly shoddy paperwork has raised doubts about the legitimacy of foreclosures nationwide (a crisis illustrated here and here), eliciting complaints from homeowners and investors alike.

The Congressional Oversight Panel, a bailout watchdog, released a statement Tuesday that says the scandal over alleged "robo-signers," foreclosure processors who approve documents without reading them, "may have concealed much deeper problems" in the mortgage industry, HuffPost's Shahien Nasiripour reports. (See the most shocking robo-signer statements.)

Regulators will have their hands full. "[D]ecide how long you think it will take for Barney Frank and Eric Holder to sort everything out," Zero Hedge says.

(Via Zero Hedge)

Comments

[deadfed]

08:06 PM on 01/05/2011

My blog has a link to MERS where you can type your address in and it will tell who allegedly is the servicer and investor on your mortgage note....good luck

http://deadfed.com/
(look for MERS logo in middle of home page)

[rdkaustin]

01:36 PM on 12/28/2010

Great article

Austin realestate

[fruity]

01:29 AM on 12/11/2010

someone needs to hire him. Can we get charts of a legislative process. lol

[jstrate]

09:04 PM on 11/24/2010

Sellers benefit from information asymmetry (knowing more about the quality of the product than the buyer). It's a source of market failure. That explains why mortgage products became so much more complicated. You can fool even reasonably bright and attentive people into purchasing something they should not. If a mortgage product is too complicated for an average person with an I.Q. of 100, a high school degree, and decent skills in algebra to understand after 30 minutes of instruction, it should probably be prohibited. Anything more complicated exists only for the seller to benefit from the ignorance of the buyer. .

[RightToCancel]

11:06 AM on 11/24/2010

1 The most rewarding things about this epic battle that is the foreclosure fight is meeting homeowners and other advocates who are standing up and fighting for themselves and fighting for the heart and soul of our courthouses. http://righttocancel.com/
TJ "The Central Bank is an institution of the most deadly hostility existing against the principles and form of our Constitution if the American people allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of all their property until their children will wake up homeless on the continent their fathers conquered."
We have only seen the tip of the mortgage crisis. The scariest part currently of this crisis is that people are losing hope, The common consensus is "why bother...the bank doesn't care...why should I? I will just go rent." The American dream has gone from aspiring to own your own home to just hoping to keep your home. http://righttocancel.com/
If you feel that you have been a victim of predatory lending practices or are currently facing a foreclosure, contact us today and learn how you can take action against your lender using our proven administrative procedure that has already help so many people fight back against the banks and get resolution! [e-mail] Office: 813-321-5114

[Gary Hosking]

03:58 PM on 11/23/2010

If you are trying to study any and everything about Mortgages, this is a chapter for investors, not trying to learn about Foreclosures. Did you ever wonder what the reason why your loan was changed to another Bank? When that is happened your loan was pooled with similar loans and sold to a different investor as a mortgage back security.
The chart is totally whacked. A 1003 is a loan application, what does he list separate? This chart is causing a misconception to people looking help with their loans.. Point - the bank holds the note to a persons home if they have a lien. If they do not make the required payment, the bank foreclosures on the property. It doesn't take a rocket scientist to understand that.

What happens to your money after payments are made? The creator of this chart had no idea what he was doing. This is proven because he has no idea of the order (flow process). I could spend an hour trying to explain this. It would only pertain this one situation. It clearly needs to be understood - every loan/situation is different. Different Lenders, different values, different LTV's, DTI's, etc....

[RightToCancel]

11:18 AM on 11/24/2010

Yes we do agree, but we have seen many people who are standing up for right's, fighting for there homes using proven administrative procedures to gather all evidence needed to prove there cases, judges will listen if you know how to use the system to work for you instead of against you, most judges who listen to pro se litigants that have gather the proper info and state there claim will make just rulings, you must know your arguments, and win the case before you even get to court using proven methods, check out our site or email us for more info. advisor@ri ghttocancel.com Office: 813-321-5114
http://righttocancel .com/

[lawgrace]

01:47 PM on 11/23/2010

The Congressional Foreclosure Panel examination of mortgage services and foreclosure practices SHOULD INVESTIGATE LAWYER.

Lawyers are officers of the court; knowledge of applicable laws and civil procedure is not required from mortgage lenders.  In states that require judicial foreclosures, lawyers are the ones who file lawsuits to seize and sell property; and lawyers are responsible for filing and recording foreclosure property deeds.

An investigation could prove helpful to sorting out whether improper and illegal foreclosure proceedings are linked to any self-dealing conduct disadvantaging lenders, investors, homeowners, and city governments. . .
” *see: Request for Congressional Foreclosure Panel to Examine Foreclosure Lawyers
http://www.change.org/petitions/view/request_for_congressional_foreclosure_panel_to_examine_foreclosure_lawyers#

[bobk in nh]

04:26 PM on 11/21/2010

So, If i'm a republican- Wall street is good cause it's the free market and it'll correct itself, right? but then Wall Steet is bad for the bailout, and governement is bad because they should regulate less (even thought they didn't regulate enough. SARAH, can you explain this to me......

[nhfarmer]

10:17 AM on 11/21/2010

Sometimes I think the process is intentionally complicated so the lender can watch interest rates change after the interest rate lock-in. The lender has months to find the best buyer for the mortgage and can reject or approve the loan months later using arcane rules, after they have calculated their profit or loss on the transaction. The borrower can't justify unilaterally exiting the process after months of effort and non-refundable payments for non-transferable inspections for example.

[Robert Sciolino]

06:28 AM on 11/21/2010

I think about our parents, and more to the point, our grandparents, if, based on their maturity and level of personal responsibility and as a whole, would never have let these things begin, let alone escalate out of control. Seeing this chart and being in enough real estate offices during "the boom", and hearing people talk about affordable monthly payments instead of down payments and paying off mortgages, I know that this is all a result of children never having grown up. Sorry, no offense. The truth is the truth.

[FDMNews]

04:36 PM on 11/21/2010

The truth is, back in those days, bankers and others would have been ashamed to be carrying on such shinanegins, making a buck from cheating and stealing from their neighbors, churches, businesses, and charities, let alone the retirement accounts of their community. Give me a break. Someone could buy a house for a reasonable amount of money, expect the mortgage would not be bet on to default. The children who have not grown up are those receiving their BONUS checks right about now on Wall Street, those who played around with the lives of millions around he world to satisfy their egos thinking they were kings. Uggh.. Please!

[amanda mariee]

08:57 AM on 12/01/2010

"Masters of the Universe"

[dlpartyka]

02:58 AM on 11/21/2010

I've been reading comments for about 2 1/2 hrs now I've learned quite a bit (some I didn't want to know) everyone blaming someone and I agree about personal responsibility,though it looks to me that alot of this is happening to responsable folks too. Who Owns my Mortgaged Title? I have no Idea, with a 30yr. fixed Morgage I could care less, I won't be here when it's paid off and doubt that my family will be either, they'll probably sell and it will be someone elses headache. I pay my Mortgage every month so if they come after me their going to meet a monster they'd rather not tangle with,BUT the reason for my post. I hold no illusions about OWNING anything. My Mortgage is $415.00 a month.I could not rent anything, anywhere around here, for that price so I'll gladly pay my Banking/ Broker his due and let him worry about paying everone else down the line. I may NEVER see my INVESTMENT become a reality or receive even a portion of what I've put into this place. But I live here and I've never before heard of a landlord (renters) returning even a portion of the rent you've payed over the years. Buying can still be better than renting, Just don't ever BELIEVE you OWN anything!

[Robert Sciolino]

06:35 AM on 11/21/2010

I honestly don't know how you go any further than to blame the person who signed the mortgage papers and moved in. I will never forget my wife crying when we made the decision NOT to sign the closing papers on our "dream home" in 2005 because I hired an attorney and found some of the fine print that would have resulted in our being tripped in this current nightmare. By the way, she isn't crying anymore. But, because so many people signed on the dotted line, not bothering to know exactly what they were signing, we too our directly involved in the house of cards catastrophe and the subsequent "its not my fault, it's their fault" child-like whimpering. Well, its my fault for not spreading the word back in 2005...so you see...even though we exercised our God-given freedom of choice, we STILL are partly at fault. It's time we all start acting like personally responsible adults, heal our wounds and begin again rather than looking for bail outs that reward failure and blame someone else. Adulthood must prevail if we are ever to get out of this disaster.

[dlpartyka]

12:51 PM on 11/21/2010

Not sure where you were going with your statement, But with Tax's steadily going up and the existence of Eminent domain (Your property can be seized for the common good owned or not!) You don't now and never will truely own anything. Don't believe it? Try building ANYTHING on YOUR property without the proper pemits...All you OWN is permission to use it till someone says you can't.

[FDMNews]

12:46 AM on 11/22/2010

Oh, wait, I get it! You want us to have an 'adult conversation?'

Oh, yea, that is the GOPpers new talking point 'adult conversation' until they actually have to have an adult conversation.

As we see, the adult conversation only goes one way. For example, an adult is pretty much ok with the fact that the state and federal government have confirmed Obama is a US Citizen, and still, like children, they say he isn't one, or when they claim fantastical figures about how much Obama's trip to India cost.

No, the banking and mortgage system was messed up. Big, big time.
Like the practice of taking out insurance policies out on employees. Now, talk about schemes.

So, ok, let's say homeowners were terrible people, accepted loans they knew they could not afford (I wonder about the purpose of all those pages of fine print). Still, actual financial experts, with an education and experience, were in the know about what they were doing, right? Or were they innocent victims? Do you have any words of responsibility for them?

The 'adult' may have to find there was plenty of blame to go around, and unlike the claim of 'class warfare' plenty of wealthy/middle class/poor people were part of this process that got way our of hand. What if everyone agrees to stop blaming? From what I can see, the GOPpers are just about to let out some revenge. Sadly, not on the assaults against democracy, but the majority.

[cypherpu]

07:38 PM on 11/20/2010

Did anyone suspect that one reason this chart is so complicated is that many of the legal structures arise from requirements of state and federal law?

Did anyone recall that loan securitization was first developed at the request of... Fannie Mae?

I am currently applying for a loan with stellar credit and a heft down-payment (25%). The loan is already scheduled to be sold to Fannie Mae. But there have been so many defaults, that we are encountering delay after delay in obtaining the loan. As I look over other properties in the area, it seems that many are coming back on market after not making their financing contingency.

This represents what will eventually happen in the US if lenders/investors cannot be guaranteed recovery of their principal in case of mortgagee default. They simply will stop making loans in the mortgage market, and place their money in stocks, bonds, commodities, etc. Securitized mortgages are hardly the only game in town.

[Davey Johnson]

06:08 AM on 11/21/2010

Yeah. It's the government's fault. It always is. Poor Wall Street, just another entity scammed by the White House and Congress.

[Robert Sciolino]

06:45 AM on 11/21/2010

I'm still looking for the gun pointed at home buyers' heads during the housing boom, you know the people who fed the (Wall Street) sharks and spawned so many more thieves...the people who allowed deals to escalate out of control so that they could own 3000 plus square feet for the equivalent of a monthly car payment, never bothering to hire an attorney before they committed to a thirty year payment agreement and who put pennies down for deposit. Maybe you can help me find that loaded gun. In the meantime, let's keep bailing out failure instead of acting like adults, paying off our commitments, going bankrupt and starting over as responsible people who learned a valuable lesson. Nope, can't do that! Let's just keep blaming the animals we created in choosing to ignore the fine print and pretending we could by a hose for peanuts and with no down payment.

[dudecrush]

12:24 PM on 11/22/2010

Fannie Mae didn't start this fiasco, it was actually the repeal of Glass-Steagall which allowed for the creation of these exotic card tricks and the banks immediately engaged in predatory lending in order to bundle these sub-prime mortgages into AAA rated securities and resell to the highest bidder. Fannie Mae only joined in the fray after Wall Street had already caused an explosion in sub-prime lending basically forcing them to follow the current market trend. Before you blame Fannie Mae I would take a good look at Goldman Sachs, last I checked they were the ones who made billions of your tax money by causing an artificial bubble and then bursting it on purpose.

[Paul Sta]

06:07 PM on 11/20/2010

Find the note?, good luck bank.

[Bruckley]

04:42 PM on 11/20/2010

weird

[B Kleitz]

03:51 PM on 11/20/2010

I'm sorry, but, as I type this, CitiFinancial is trying to take our house. We only owe 17K on a house worth about 60K on the market. My husband had a stroke in 2009, that's how we fell behind.
I'm just failing to see any humor in this.

[Paul Sta]

06:09 PM on 11/20/2010

Its not meant to be humorous, get an attorney.

The point is your mortgage has been sold, and securitized so many times, there is an excellent chance your title is irrevocably broken.

[bobk in nh]

04:06 PM on 11/21/2010

Irrevocably broken title? Have never heard of that. Chain of title can be broken, but not sure what you mean. Also- in some states you hold the title subject to a mortgage, other states you do not, when you buy real property.

[rel77]

11:53 AM on 11/23/2010

I'm very sorry to hear your predicament. Please listen carefully. You need to know a couple of things about your situation. CitiFinancial in all likelihood has NO IDEA what happened to your mortgage, because of lost or destroyed paperwork. What a lot of these banks tried to do to get around that is they fraudulently re-created the paperwork they needed to prove they owned your mortgage. Get a lawyer who will work pro bono and focus on the paperwork. Look for dates that don't add up or other irregularities. What CitiFinancial is trying to do is foreclose on your property so that a new mortgage can be issued and they can start over. They are trying to "paper over" the crimes they committed 2 years ago when they securitized your mortgage and sold it to investors. Don't let them do it. Make them prove they own it, and subject EVERY DOCUMENT they provide to the highest scrutiny. You should be able to win.