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Behind the Securitization Curtain – 21st Century Mortgage Casino

deadlyclear.wordpress.comApr 20, 2012

The turn of the century mortgage lending fiasco was built like a 21st Century casino.

The entire scheme started with the homeowner who wanted to buy a home or refinance at unbelievable interest rates… too good to be true… and they were!

It all started with a loan application called a “1003.” EVERY lender in the scheme used the same loan application software. In fact, Fannie Mae patented the sucker. Inside this specific patent are numerous patents related to and referenced that make up the beloved 1003 loan application. These patents are listed on line in the USPTO.

One of the reference patents is a gem called the “Online system for fulfiling loan applications from loan originators” and it describes how technological methodology is integrated into the mortgage lending process.

For example, it states:

“This integration serves to streamline the loan submission process and provides seamless connectivity to lenders and settlement service vendors over the network….


“The World Wide Web (“web”) has evolved from first generation web systems that simply provided information to client computers over the Internet through a web browser program to second generation systems using application servers that provide dynamic, personalized information and powerful back-end transaction processing.”

That “powerful back-end transaction processing” is the gateway to the MBS casino. Your personal loan information is apparently seamlessly automated from the inception to the birth of your loan… all at the same time you picked up the phone or sat down with the loan officer while the loan officer filled out the 1003 application and you provided your personal data and social security number.

The “Online system” patent continues:

“A great number of commercial applications become adapted to on-line systems, thus establishing a base of many different types of electronic commerce or “e-commerce” transactions. Among the various adaptations of classical commercial transactions that have become adapted to online implementations is the area of financial loans. The loan application process is often a complicated and confusing process for average borrowers. There are a great many different types of loans available depending upon the type of loan required, such as personal loans, home mortgages, business lines of credit, and so on. There are also many different variables or negotiable terms associated with each loan, such as interest rate, loan period, processing fees, and the like. In most cases, a detailed profile of the borrower is required because factors such as age, employment, financial history, credit rating and so on, can have a great deal of impact on the cost and ability to qualify for a loan. Moreover, loans are available from many different sources, such as traditional banks to private and commercial money lenders.”

We realize by now the lenders acted as a gang… a cartel, all for one and one for all. These patents show that they shared and had access to the same loan information.

It’s no wonder that they dinged your credit if you filled out more than one loan application. That could throw a wrench into their roulette table. It’s as if you are sitting in a perfectly quiet lobby providing personal information for your loan and the data is being sent to the scoreboard at Churchill Downs on Derby Day. The lenders can start bidding on you immediately because – get this… your loan number is assigned during the application process… REALLY! You haven’t agreed to the loan yet, but there are lenders looking over your personal information as if they were going to buy a race horse … or a debt slave.

The loan number is your identity and it is assigned during the application process… remember… seamless… automated technology…

Bought and sold before you sign on the line.

Quote from patent 20030233316:

“For example, if the interface between a lender and the broker is web-based, such as the Freddie Mac Loan Prospector system, the information is populated directly into the lender web forms. This automated input and distribution system eliminates the need to fill out individual disparate loan application forms, and transmit the forms to the various broker and lender sites.”

Are you feeling a bit vulnerable now? You should be – where is the privacy? Moreover, where is the fair trade protection?

There’s more to learn – share the knowledge and stay tuned.

Back to April 2012 Archive

CFLA was founded by the Nation's Leading Foreclosure Defense Attorneys back in 2007 to serve the Foreclosure Defense Industry and fight pervasive Bank Fraud. Since opening our virtual doors, CFLA has rapidly expanded to become the premier online legal destination for small businesses and consumers. But as the company continues to grow, we're careful to hold true to our original vision. For us, putting the law within reach of millions of people is more than just a novel idea—it's the founding principle, just ask Andrew P. Lehman, J.D.. With convenient locations in Houston and Los Angeles, you can contact Our National Account Specialist and General Manager / Member Damion W. Emholtz at 888-758-2352 for a free Mortgage Fraud Analysis or to obtain samples of work product, including cutting edge Bloomberg Securitization Audits, Litigation Support, Quiet Title Packages, and for more information about our Nationally Accredited and U.S. Department of Education Approved "Mortgage Securitization Analyst Training Certification" Classes (3 days) 24 hours for approved CLE & MCLE Credit (Now Available Online).

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