The World of the Investor with Attorney Talcott Franklin – A Mandelman Matters Podcast

WHAT’S THE DEAL WITH INVESTORS?  WHO ARE THEY?
ARE THEY LOSING MONEY ON FORECLOSURES?

What do the investors think about all these foreclosures?

What’s the relationship like between investors and servicers?

Do investors want to modify loans?

Do investors ever stop servicers from approving loan modifications?

Why don’t investors get more involved in this mess?

IF YOU’VE ASKED THESE QUESTIONS, HERE’S YOUR CHANCE TO GET ANSWERS!

Attorney Talcott Franklin knows mortgage-backed securities inside and out.  He should… his firm, Talcott Franklin P.C. whose main offices are in Dallas, in dollar terms represents more than half of all the investors in mortgage-backed securities on the planet.  Tal’s the co-author of the “Mortgage and Asset-backed Securities Litigation Handbook,” and he’s a very experienced and highly sophisticated litigator.

What makes Tal a pleasure to talk to, however, is that he makes a very complex subject very easy to understand… in fact, every time I talk to him, I feel like come away smarter.  Actually, the very first time Tal and I spoke, it was very clear that we couldn’t be more in-sync as to our views on the economy… where it’s headed and why.

Tal sees the foreclosure crisis essentially the same way I do, which I found interesting right from the start because he represents the other side of the foreclosure coin… the investor side.  And because of his knowledge and perspective you’re going to find listening to what he has to say absolutely fascinating.

You know how servicers are always saying “the investor says no,” when they want to deny a loan modification… well, Tal explains why that simply isn’t true.  And he walks us through the securitization process in a way that you’re likely to remember forever.  And you’ll learn all sorts of other things you did not know.  I’m telling you, you’re going to love spending an hour with Talcott Franklin on this, A Mandelman Matters Podcast.

The podcast is available in two versions… MP4 and MP3.  The MP4 version includes a couple of slides that show diagrams of the basic securitization process, but the MP4 format may not play on some computers.  The MP3 version is audio only, and should play on most any computer.  Most listeners will have no trouble following along either way.

So, turn up the volume on your speakers, and click the MP4 or MP3 version.  I loved recoding this podcast.  If you want to know more about the foreclosure crisis, you’re about to learn from an expert on the other side of the foreclosures, the investor side… it doesn’t get any better than this!

CLICK HERE TO PLAY THE ENHANCED MP4 VERSION

… INCLUDES SLIDES ON SECURITIZATION

OR

CLICK HERE TO PLAY THE MP3 VERSION

Mandelman out.

Comments

  1. chunga85 says

    Quick answer: No.

    (You Attorneys General can stop reading right now; your vile and insulting accord with the bankers, regulators, and politicians is set; and you've earned, quite justly, well-deserved opprobrium from all but the sociopathic elite. The position of Attorney General (the chief law officer of the state) entails ensuring that the laws of the state are uniformy and adequately enforced. Now that you have soiled that position and perhaps perverted it's purpose forever, please go away.)

    In the Real Estate hay day, back when they weren't making any more Real Estate, money started looking for people. To this day, some cling stubbornly to an obtuse and incomplete interpretation of the "Community Reinvestment Act" as a convenient neon red-herring on which to affix blame. To suggest (over and over again) that any politician, regardless of spot or stripe, would give a fig, lift a finger, bat a lash, or make anything more affordable for anyone other than themselves is mere cacophony.

    The money was looking for people for one reason and one reason only.

    How do you steal money from those who don't have any?

    Simple. Just give it to them.

    This seemingly chivalrous and selfless act of making the "American Dream" of home ownership more affordable to minorities or the otherwise disenfranchised was actually anything but chivalrous and selfless.

    It was the perfect crime.

    While keenly focusing on the fact that no one was making more Real Estate, it was triple A safe to assume the value of Real Estate would never do anything but go up. This "conventional wisdom", often called "speculative", "irresponsible" and "reckless" nowadays, was repeatedly and professionally affirmed by experts (lender's agent) in the form of property appraisals.

    The zenith of all this chivalry is the appraisal and exemplifies the brilliance of the perfect crime.

    Precisely at that moment, the vaporous, phantom, wealth of debt is born. Hold on to your hats all you disenfranchised minorities, you will soon be disemboweled. The money has found you and welcomes you aboard the "American Dream".

    Fast forward...

    There is actually plenty of Real Estate and it never does anything but go down in value. In keeping with the state of affairs we find ourselves in; we are forced to re-examine the definition of "value".

    Once upon a time, the value of something was a direct corollary to what someone would pay for it.

    Not anymore. Value is defined in a cell on a spreadsheet[s] and that never budges.

    Enter the Credit Default Swap.

    As chivalrous as the lenders were, way back when they weren't making more Real Estate, they had a sneaky suspicion the disenfranchised minorities they tried to help were secretly chiseling deadbeats. They had to buy insurance in case they didn't pay back the captured amount in all those spreadsheet cell[s].

    Buying and selling this insurance was especially lucrative and worked like a charm for a few, but was really bad for many. You see, there was never any intention by these insurance companies to actually pay, much less have the ability to pay any of these claims. The only logical and prudent thing to do, absent any other possible option, was to once again foist this on the sap of last resort, the taxpayer.

    Fortunately for TBTF, the taxpayers are busy pointing fingers at each other, exactly as planned. They are laughing at us. Oh, and as a bonus, all this chivalry has created clouds over millions and millions of titles and wild deeds as far as the eye can see.

    Further...

    Will anyone kindly explain why these investors are entitled to remain anonymous in foreclosure complaints?

    Isn't it very odd that servicers routinely cite confidentiality agreements between said investors in discovery?

    When pressed in court with a Motion to Compel they typically respond with a Motion for Protective Order.

    Why hide if there is no need? Since they do it practically all the time; there must be a need.

    So, what is it?

    I'll take a stab at answering my own question.

    Because, you know what? Many of these trusts have triggered CDS pursuant to the PSAs that govern them and they no longer exist.

    The investors got paid by an insurance company that got bailed out and can't, coincidentally, account for vast chunks of their bailout money.

    The remainder of the loans in the trusts that no longer exist and have been extinguished in SEC filings (hint - that's what they are hiding) continue to be collected by Mr. Servicer Man.

    Mr. Servicer Man is not owed that money but continues to collect payments none the less.

    If the savvy anonymous investors beat too hard on the servicers, the servicers will remind them that the collateral obligations were not placed in the trusts within the REMIC tax window making them guilty of tax fraud on a wide scale.

    That, in addition to the fact they have been already been made whole (and sometimes way more than whole) by their incestuous bailed out insurance cronies makes for a very deep rabbit hole.

    It is now safe to return to your regularly scheduled distraction...

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