Via Bloomberg by Jody Shenn and Prashant Gopal – Nov 16, 2010.
A trade group for companies that help package loans and leases into securities rejected claims that mortgage-bond trusts can’t prove ownership of debt they hold as Congress began hearings on the foreclosure crisis.
The securitization industry, which is claiming the existence of the PSA in itself shows that the loans were transferred, is ignoring the language in the agreement, said Shelby, North Carolina, bankruptcy litigator O. Max Gardner III.
The PSA is “the bible” for securitization, and the industry is ignoring the process it outlines for transferring loans, he said.
“The PSA has specific detailed rules for delivery, transfer, and possession of the note, and the white paper completely ignores those” rules, Gardner said. “The powers, the duties, and rights of the trustee are created, governed and limited by the PSA. The trustee can’t do anything that is not provided for by the PSA.”