THIS POST HAS BEEN MOVED TO GARFIELD’S BLOG:

Interesting thought here as I read Chain of Title which makes a point to say the investors don’t own the actual loan. We now have documents that identify the mortgagors as a third-party to the process between the banks (and of course they would have to be since they unwittingly, with no disclosure, pledged their collateral); and, agreements defining the unlimited use of the collateral assets to pledge, repledge, reuse, rehypothecate, hypothecate – all of which the homeowners did not agree or allow by contract. It is time to make judges define their understanding of the word “transfer” in the note and “sold” in the mortgage.

These are not traditional mortgages. The securitization and “procurement of collateral” agreements were pre-existing to the faux mortgage and note documents and the homeowner’s signature. However, there was no disclosure to the homeowner. These were internally contracted securities transactions.

BASIC INC. v. LEVINSON, 485 U.S. 224 (1988) identifies fraud on the market. Omission is just as serious as misrepresentation.