Mortgage Backed Securities, CDO’s and Tranches – Oh My!

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Now, I put the colorful title for no other reason than to get people to click on it to get the information because frankly, a lot of people were given really bad loans, were given really bad advice, and sometimes you have to fight back. And here is one of the things and again hundred and make this with as little complications as possible. now let’s say you bought the house and you got the loan through a mortgage broker. Well that mortgage broker didn’t really give you the loan. They bought that loan from a wholesaler of mortgages. That wholesaler of mortgages, in turn bought that loan from one of those big huge Wall Street banks. Most of which are out of business right now

Important thing to point out if I may , if you are not going to lose your train of thought as I know this is your life’s work. Velocity financial is a mortgage broker we do get our money from several wholesale banks

So this entire collapses your fault is what you’re saying

Just because its Christmas Eve does not mean you can blame me for everything

Dan, I just wanted to point that out because we’re glad we’re broker

Well, I definitely feel better blaming this on Michael than on me. Just to continue the analogy here. So the broker buys it from a wholesaler who buys it from the Wall Street bank, and likely than most of them are out of business now. And what the Wall Street bank did with each of thousands of these loans worth billions of dollars they put them all together into what is known as mortgage backed securities, that is the stuff you hear like Fannie Mae is selling and there is any interest rate put on them and what happened to these mortgage backed securities is they in turn were up by other Wall Street banks combined with other mortgage backed securities that they called collateralized debt obligation well Dan, what these brainiacs in Wall Street decided to do was to chop these collateralized debt obligations up into what is referred to as tranches.

So let’s say you had your best quality double a borrowers in the top tranch . And obviously your triple is the borrowers were in the bottom tranch. Each one of them was given a specific interest rate, each one of them was rated by a bond rating firm, and each one of them was given insurance. Well, what happens is as these got split up and sold over time. The notes on the mortgages go with the debt itself. So CDO over in Bangladesh owns your mortgage now, but here is the problem they don’t have the paperwork. So the reason I went through this whole story is in case your bank comes to you and says we’re going to foreclose. I knew what you want to do is go and get yourself an attorney.

And you want this attorney to go to this bank and say oh great, we want you to prove to us that you have standing, that they have the legal right to come after you and foreclose on you and here is the thing. If they don’t have the paperwork if they don’t have the note on the property, they can’t prove that they have standing. So whether it’s the wholesaler, who is foreclosing on you, whether it’s the servicer, whoever its chances are very good that they don’t have this note. So again, he got a little complicated. You want to go to the website and there in the several articles there, a lovely little chart that I drew out except that it will be much nicer than this piece of paper, and I will have all the information there so I had a friend just recently was in foreclosure and she made the phone call.

And she said, a you cannot foreclose on me, now eventually it to get foreclosed on, but it delayed its release a month until they were able to find that note. And chances are, they may never be able to find that note . And in many states including Florida, and Ohio. They are very successful at using this tactic to stop were completely do away with the foreclosure sale. So we don’t really want to add Brett Berger crosses over in the next segments with Brett talking about the financial side of these. We don’t necessarily want to encourage people to go down this path, right? We’re looking for install essentially?

Well, hopefully no one will ever have to get to that point. But if you believe that your servicer, your mortgage company is not being nice to you. Especially if you call him up and he wanted to loan modification, and they are dragging their feet filing foreclosure and coming after you, you have to protect yourself. And this is one of the ways you can protect yourself by hiring an attorney and suing them for lack of standing

We’re going to cut out for a quick break, and that is one of the things that I want talk about that a lot the financial is involved with a national network of attorneys who do this sort of work velocity financial does not charge an upfront fee for these types of loan modifications that you’re essentially talking about, we do hire an attorney they work with the national network of attorneys to work on your behalf they do charge a retainer of course if they are going to fight for you they need to be paid, however. There are no upfront fees to get more information on the loan modification you would call 480 velocity and its the and you can also go to velocity There is a link there to Dan Havey’s website. And folks will be will be back with you in just a few moments
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