FANNIE MAE, BY ITS OWN ADMISSION, OWNS NOTHING

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Posted on July 11, 2013 by eggsistense

In the latest smackdown of the big banks making the rounds, namel y JP Morgan Chase Bank, Natl. Assn. v Butler , heroic Judge Arthur Schack puts Fannie Mae in her place more than any other judge Im currentl y aware of. He takes Fannie to task over a portion of Fannies Servicing Guide (Part VIII, Chapter 1, Section 1 0 2 ) t h a t I h a v e a l w a ys f o u n d s h o c k i n gl y a r r o g a n t a n d a t o d d s w i t h t h e l a w .
NOTE: Double Click on Icon to Right to View Doc

Schack quotes the whole offending section, but Ill just give the most arrogant parts:
Fannie Mae is at all ti mes th e owner of the mo rtga ge note, wheth er the note is in our portfolio or whether we own it as trustee for an MBS trust. In addition, Fannie Mae at all times has possession of and is the holder of the mortgage note, except in the limited circumstances expressly described below. [SNIP]
[Schack italicizes the following section] In any jurisdiction in which our servicer must be the holder of the note in order to conduct the foreclosure, we temporarily transfer our possession of the note to our servicer, effective automatically and immediately before commencement of the foreclosure proceeding. When we transfer our possession, our servicer becomes the holder of the note during the foreclosure proceedings. [SNIP]

[Schack also italicizes the following section] This Guide provision may be relied upon by a court to establish that the servicer conducting the foreclosure proceeding has possession, and is the holder, of the note during the foreclosure proceeding, unless the court is otherwise notified by Fannie Mae.

Schack correctly concludes that FANNIE MAEs Servicing Guide, with its deceptive practices to fool courts, does not supercede New York law. I had the same thought when I first encountered this fiat decree of Fannie Maes when researching my own lawsuit against Fannie Mae and others a couple of years ago. It is a relief to hear a judge articulate this so starkly. However, I am somewhat dismayed to read that Schack refers to Fannie Mae as the owner of the note and mortgage throughout his decision. Schack appears to be relying on affidavits from Fannie Mae/Chase types for this information, as he must. I havent read the affidavits on which Schack relied, but I have read information from Fannie Maes own trust documentation and website that puts the lie to the idea that Fannie Mae owns anything .

Fannie Mae Tells Us It Owns Nothing

A PDF from Fannie Maes own website entitled Basics of Fannie Mae MBS explains Fannie Maes lack of ownership very simply and succinctly: NOTE: Double Click on Icon to Left to View Doc In gen eral, mo rtg age-backed securities a re commonly called MBS or Pools but they can also be called mortgag e pass-through certificates.

An investor in a mortgage-backed security the certificate holder owns an undivided interest in a pool of mortgages that serves as the underlying asset for the security. Interest payments and principal repayments from the individual mortgage loans are grouped and paid out to investors. The mortgages that back a Fannie Mae MBS are held in a trust on behalf of Fannie Mae MBS investors and are not Fannie Mae assets. As a Fannie Mae MBS investor, the certificate holder receives a pro rata share of the scheduled principal and interest from mortgagors on the loans backing the security. Interest is paid at a specific interest rate. The certificate holder also receives any unscheduled payments of principal. So from the above, we see that Fannie itself says that certificate holdersnot Fannieown the beneficial interest in the mortgage pool (Fannie says in other documentation that it can also purchase these types of certificates, although I havent seen any indication that Fannie smokes its own dope). Even more importantly, we see that Fannie itself says that the mortgages (i.e., the promissory notes) that are supposedly in the pools/trusts are NOT Fannie assets. The very definition of the term asset of course involves ownership, as spelled out at Investopedias definition of asset, which it defines as:

A resource with economic value that an individual, corporation or country owns or controls with the expectation that it will provide future benefit.
Therefore, Fannie admits it neither owns nor controls the promissory notes. So if Fannie Mae itself admits that it does not own the notes and mortgages in the pools, why are Fannies goons swearing to Schack that Fannie does own them ? Some people may not be satisfied with such an admission in the text of a website meant to simplify matters. OK, well how about these jewels from the Fannie Mae Amended and Restated 2007 Single-Family Master Trust Agreement for Guaranteed Mortgage Pass-Through Certificates evidencing undivided beneficial interests in Pools of Residential Mortgage Loans dated January 1, 2009: By delivering at least one Certificate of a Trust in the manner described in Section 3.1, the Issuer [i.e. Fannie Mae] unconditionally, absolutely and irrevocably sets aside, transfers, assigns, sets over and otherwise conveys to the Trustee [i.e., Fannie Mae], on behalf of related Holders, all of the Issuers [Fannie Mae] right, title and interest in and to the Mortgage Loans in the related Pool, together with any Pool Proceeds. Concurrently with the Issuers [Fannie Mae] setting aside, transferring, assigning, setting over and otherwise conveying Mortgage Loans to the Trustee for a Trust: (a) the Trustee [Fannie Mae] acknowledges that it holds all of the related Trust Fund in trust for the exclusive benefit of the related Holders [of certificates issued by the Trust] Note that Fannie Mae as Issuer irrevocably transfers all of its interest to Fannie as Trustee, and that Fannie Mae as Trustee says that it holds all the money in the trust for the exclusive benefit of the certificate holders. So again, Fannie Mae admits it doesnt own notes.

Fannies DuplicityAll Things To All People?

Notice the duplicity of Fannie Mae made plain in these documents. In the Fannie Servicing Guide, Fannies intended audience is obviously its servicers, so they want the servicers to believe that Fannie Mae is at all times both the owner and holder of promissory notes. However, in the other two documents (the Basics of Fannie Mae MBS website excerpt and the Amended 2007 Trust Agreement) excerpted above, Fannies intended audience is investors and potential investors, both of whom Fannie wants to believe that they (the investors or potential investors)and not Fannieare the owners of the promissory notes.

So why is anyone letting Fannie Mae get away with saying that it owns promissory notes (and by extension the deeds of trust/mortgages) and can foreclose due to that ownership? Please Spread This Article (Info) Far and Wide.
Article Source: http://LibertyRoadMedia.wordpress.com/2013/07/11/fannie-mae-by-its-own-admission-owns-nothing

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