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Dan Edstrom is a guy who is in the right place at the right time.
His profession? He performs securitization audits (Reverse Engineering and Failure Analysis) for a company called DTC-Systems.
The typical audit includes numerous diagrams including the following:
- Transaction Parties and Flow (similar to the chart below, but much easier to understand)
- Note exchanged for a bond Foreclosure parties
- Priority of Payments from the Security Instrument (Mortgage, Deed of Trust, Security Deed or Mortgage Deed)
- Priority of Payments from the Pooling and Servicing Agreement
This diagram shows that they are not following the borrowers instructions in the security instrument
Source of Payments for Distributions–This diagram is extremely complex and shows that the miscellaneous proceeds specified in the security instrument (and in the SEC Filings) should be applied to the sums secured by the obligation upon the event of a loss in value of the property, whether or not then due, with the remainder, if any, returned to the borrower. This document combines UCC 3-602(a), UCC 9-315, UCC 9-336, UCC 2-609, and UCC 3-501 together with NY Code Section 4545 and the SEC Filings to show that the miscellaneous proceeds can be applied to the borrowers obligation.
The following flow chart reverse engineers the mortgage on the Ekstrom family residence. It took Dan over one year to take it this far and it clearly demonstrates what happens when there are too many lawyers being manufactured.
Take a look at this chart and then decide how long you think it will take for Barney Frank and Eric Holder to sort everything out. There is a link to an expandable version at the end of this post.
Dan will be lecturing on this subject on December 11, 2010 if you are interested in learning more about who is the holder of your mortgage note. Here is the link to the Seminar:
and here is a link to a LARGE VERSION of the Chart: