By Sydney Sullivan
In the process of research for a homeowner in the throws of foreclosure hell, albeit stayed in moratorium for the purposes of COVID as a “Federally backed mortgage loan” pursuant to the 2020 Coronavirus Aid, Relief, and Economic Security Act (CARES Act), a little unknown gem of information surfaced.
Now, we’ve all been consumed lately with the GameStop fiasco and we’ve certainly learned about hedge funds and shorting the market (betting against the company stock)… how do you think this applies to American Homeowners? Or Fannie & Freddie shareholders who haven’t seen a dime of their investments since 2008? Or the US Treasury? Or the Federal reserve? Maybe this story will help connect the dots. And then look at every foreclosure and appellate judge and politician’s financial disclosure statement and investment portfolio. Yeah, how could a foreclosure judge hold investments that are betting against the homeowner saving his home? Rather a conflict of interest, wouldn’t you think?
The Plaintiff in the case is U.S. BANK NATIONAL ASSOCIATION, NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS LEGAL TITLE TRUSTEE FOR LVS TITLE TRUST I where it was noted in another case that, “LVS Title Trust I, a fund started by PIMCO but administered by US Bank, placed the winning bid”. Remember the movie The Big Short?
That might not mean anything to the average homeowner – because who is PIMCO?
“Since 2002, PIMCO has managed a variety of hedge fund strategies that seek to capitalize on pricing dislocations globally by taking directional and relative value positions. Through prudent risk management and diversified investment approaches, these strategies seek to offer investors attractive risk-adjusted returns that are uncorrelated with traditional investments.” Hedge Fund and Hybrid Strategies
PIMCO Holds Almost $120 Billion In MBS (2009)
“PIMCO has 86% invested in mortgage-backed securities. Additionally, the recently demustachioed Newportian has been buying treasuries through the nose: from January to February, his TSY holdings have increased from -2% (oops, someone was short Uncle Sam. j/k: he is merely another fan of the repo trade) to 15%. And as the observant ones will note, just these two add to over 100%, this is indeed the case: PIMCO was using the highly generous Fed to borrow cheap, cheap cash resulting in a -25% cash position in February. Keeping all this in mind, explains Gross’ fervent pitch to the government to buy Treasuries.
In February, Gross said it was “incumbent” upon the Federal Reserve to buy Treasuries but that he wouldn’t follow the central bank’s lead. Gross missed out on the biggest Treasury market rally in 14 years in 2008, saying that yields were too low because inflation will accelerate as the deficit surges.
“We wouldn’t buy Treasuries but we would buy bonds that are correlated and related to Treasuries with a higher yield,” Gross said in a Feb. 5 interview on Bloomberg Television.”
(How much MBS is owned by PIMCO today is anybody’s guess – but suffice to say a lot.)
Are you getting the picture? US Bank was already contracted as a liquidator for Fannie Mae and Freddie Mac. Now, they have added a hedge fund to pose as a “trust” holding the loan assets. But does it?
The only way mortgages (MBS) become instant liquidity is if they are foreclosed on and sold. Otherwise, there is a 30 year payment plan – not really a liquid investment, yeah? The goal was never to maintain American Homeowners in their home. The goal was to foreclose and resell, rehypothecate and destroy the American Dream, as well as the pension funds that unwittingly invested in them. (Let me clarify the “unwittingly” to only mean the members of these unions, not the administrations and governments who had prospectuses with tons and tons of risk warnings.)
Do your research. Look closely at all the mutual funds you, your elected leaders, legislators and judges hold. Look at their risk and short positions. Ask professionals if these mutual and hedge funds hold shorts in MBS positions – because if they do you are betting against homeowners and helping foreclosures make Americans homeless.
The karma is not worth it.
More on PIMCO:
PIMCO hit with more bias claims from female employees
82,727 Shares in PIMCO California Municipal Income Fund III (NYSE:PZC) Purchased by Ackerman Capital Advisors LLC
Pimco faces accusations of gender discrimination
PIMCO VIEWPOINTS: Asia Market Outlook 2021: Attractive Opportunities As Economies Rebound