About time, and therefore that means the feds are getting close to striking a deal with the banksters, legitimatizing everything they've done.
Reuters reports that the SEC has sent out a new round of subpoenas to Wall Street banks in its probe of mortgage/foreclosure fraud, and this time the regulators are looking at the very root of the fraud - securitization:
U.S. regulators have opened a new line of inquiry in their mortgage foreclosure probe and are asking big Wall Street banks about the beginning stages of mortgage securitization, two sources familiar with the probe said."Master servicers" - read Bank of America, J.P.Morgan Chase, Wells Fargo, Citibank. Servicers are the ones who collects mortgage payments from the borrowers.
The Securities and Exchange Commission launched the new phase of its investigation by sending out a fresh round of subpoenas last week to big banks like Bank of America Corp, Citigroup Inc, JPMorgan Chase & Co, Goldman Sachs Group Inc and Wells Fargo & Co, the sources said.
The SEC's subpoenas focus on the earliest stage of the mortgage securitization process, said the sources, who requested anonymity because the probe is not public.
The sources said the SEC is asking for information about the role of so-called "master servicers" -- specialized firms that oversee the selection and maintenance of the large pool of home loans that go into every mortgage-backed bond....One of the sources said the SEC is seeking information about the role banks had in mortgage securitization. The regulator is also looking at the role trustees for the trusts that issued the mortgage-backed securities had in monitoring the performance of the underlying loans.
"Trustees of the trusts [REMIC]" - read Wells Fargo, US Bankcorp, Bank of New York Mellon, Deutschebank. Trustees of the REMICs are the ones who were supposed to verify all the necessary documents were properly transferred to the trusts.
Foreclosures in mostly judicial states have turned out to be the discovery process, as the homeowners and lawyers defending them have found out that their mortgages were never transferred properly to the REMICs, and the foreclosing parties (either the servicer or the trustee) do not have the legal standing in foreclosure.
Attorneys who have been trying to help homeowners in foreclosure will tell you that they've known for a long time that mortgages were never transferred to the REMIC, but that was business as usual for the industry and no one raised a stink about it.
And who bought the securities issued out of these trusts, which may have been issued without any backing? Banks, hedge funds, pension funds, mutual funds around the world. One of the largest holders of these securities - mortgage-backed securities - is the Federal Reserve under Ben "Bernank". The Fed has over $1 trillion of these MBS.
These banks have been telling us "Oh it's just minor document processing problems", precisely because it is not.