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The Loans Never Made The Trusts – It’s All In The HMDA Data!

“Three things cannot be long hidden: the sun, the moon, and the truth.”

– Buddha

As I listened to “sociopath Larry” on the “Foreclosure Hour” recently, I sensed a challenge. We were all being mocked as he joked in amazement that he and his Wall Street cronies have been getting away with this fraud scheme for so long. After all, “its only fraud if you get caught,” says Larry. You can listen to the Podcast here:–2015.html

Well now it’s time for the “banksters” to fall on their own swords. You see, there is this federal law called the “Home Mortgage Disclosure Act” (HMDA) that’s been around since 1975. You can read the highlights here:

Home Mortgage Disclosure Act

“Companies covered under HMDA are required to keep a Loan Application Register (LAR). Each time someone applies for a home mortgage at an institution covered by HMDA, the company is required to make a corresponding entry into the LAR, noting the following information.[citation needed]
• The date of application
• The loan type (conventional loan, FHA loan, VA loan or a loan guaranteed by the Farmers Home Administration)
• The type of property involved (single-family, multifamily)
• The purpose of the loan (home purchase, home improvement, refinancing)
• Owner occupancy of the property (owner occupied or non-owner occupied)
• The loan amount
• Whether or not the application was a request for pre-approval
• The type of action taken (approved, denied, withdrawn etc.)
• The date of action taken
• The location (state, county, MSA and census tract) of the property
• The ethnicity (Hispanic or non-Hispanic) of the borrower(s)
• The race of the borrower(s)
• The gender of the borrower(s)
• The gross annual income of the borrower(s)
If the loan was subsequently sold in the secondary market, the type of entity that purchased it[citation needed]
• If the loan was denied, the reason why it was denied (this field is optional for entities not regulated by the Office of the Comptroller of the Currency)
• Rate Spread (Rate spread is a metric that assists in reporting if the rate given to the borrower is above a certain threshold of the prevailing rates at the time of the application)
• If the loan is or is not subject to the Home Ownership and Equity Protection Act of 1994
• Lien status of the loan (1st or 2nd lien)

Every March reporting institutions are required to submit their LARs to the Federal Financial Institutions Examination Council (FFIEC), an interagency body empowered to administer HMDA. Nowadays reporting takes place electronically. FFIEC screens the data for errors and the releases it to the public electronically (on CD-ROM and over the internet). Reporting institutions are also required to disclose their individual LARs to members of the public upon request.” (HMDA is now overseen by the CFPB by the way.)

Well, look at that folks! If the loans were subsequently sold into the secondary market, it was required by law to be disclosed. So what exactly does this mean? Well here is what the HMDA Compliance Guidelines states:

Sale of the Loan

“Type of purchaser. If you sell a loan in the same calendar year in which it was originated or purchased, you must identify the type of purchaser to whom it was sold. If the loan is sold to more than one purchaser, use the code for the entity purchasing the greatest interest. If you sell only a portion of the loan, retaining a majority interest, do not report the sale. If you do not sell the loan during the same calendar year, or if the application did not result in a loan origination, enter the code “0” (zero). For more information, see Appendix A (I.E), comments 1003.4(a)(11)-1 and -2.

E. Type of Purchaser.
Enter the applicable Code to indicate whether a loan that your institution originated or purchased was then sold to a secondary market entity within the same calendar year:
Code 0—Loan was not originated or was not sold in calendar year covered by register
Code 1—Fannie Mae
Code 2—Ginnie Mae
Code 3—Freddie Mac
Code 4—Farmer Mac
Code 5—Private securitization
Code 6—Commercial bank, savings bank, or savings association
Code 7—Life insurance company, credit union, mortgage bank, or finance company
Code 8—Affiliate institution
Code 9—Other type of

b. Use Code 0 if you originated or purchased a loan and did not sell it during that same calendar year. If you sell the loan in a succeeding year, you need not report the sale.”

HMDA Reporting Guidelines 2013

Now here’s where it gets interesting. I began to examine loans that were allegedly securitized into Washington Mutual trusts in 2007. The first loan I examined was originated on January 30, 2007, and according to the foreclosure action, the testimony presented by counsel for the “WaMu Mortgage Pass-Through Certificate Series 2007-OA3 Trust” was that the loan was sold to the trust on March 27, 2007. Oh, really? According to Washington Mutual Bank’s data submitted under HMDA, the loan was NEVER sold in the 2007 calendar year. Take a look at this screenshot:

I apologize if this is difficult to read. In the category titled “Purchase Type” it states, “0 – Loan was not originated or was not sold in the calendar year covered.” (This is all public information by the way.)

WOW! This is what is called, or at least can be construed as, a tacit admission by Washington Mutual Bank that they never sold the loan to the trust; at least not in the year of the trust’s formation anyway. I began examining other 2007 WaMu trust loans which all appear the same within the HMDA reporting data. This is significant, because up until now, the “bankster” servicers have prevailed on the presumptions that these trusts actually exist, and that they hold secured assets in the form of real estate. Now I’m not an attorney, but I’ve done enough research to understand that if these so-called trusts were never funded with the assets, as the “banksters” represented to the SEC and warranted to the investors, the trusts were “naked.”

Trusts are created / formed to specifically hold assets. If no assets were put into the REMIC trusts, there is no trust. If there is no trust, any contrived agency authority stemming from the “phantom trusts” through the PSA’s (Pooling & Servicing Agreements) unto the servicers, master servicers, trustees, etc., cannot exist.

Up until now, foreclosure defense advocates and consumers have been the ones speculating that the trusts did not receive the assets, and thus have no standing to foreclose due to securitization failures – late transfers to the trusts. Most courts, outside of Glaski, have ruled that borrowers cannot challenge securitization fails, as they weren’t parties to the PSA, etc. All of these adverse rulings are steeped in the presumption that the trusts in fact are real, because there are SEC filings stating they exist.

But now we have the “banksters” having reported (ADMITTED) under federal HMDA law, that the loans were not sold after origination and to the trusts within the calendar year of the trust’s alleged formation. KABOOM!!

Now, let’s take this information one step further in terms of significance. According to the Washington State Supreme Court in the following Cashmere case ( Cashmere Valley Bank v WA Dept of Revenue_Unsecured Mortgages (WA Sup Ct 2014) ), the investors in the REMIC trusts had no secured interest in the trust assets. Much of this opinion centers squarely on which party had tax ownership of the alleged assets. Here is an excellent research paper regarding REMIC’s and tax law which spells out the fact that in order for a REMIC trust to have a secured interest in the real estate assets, it must have tax ownership by virtue of having received qualified mortgages within the stringent time period of the REMIC’s creation. (REMIC Tax Enforcement Article – Research Paper – Excellent )

So even if the “phantom trusts” did in fact exist, they never received any tax ownership of the assets per the admissions in the HMDA data (at least in the WaMu 2007 trust cases I’ve reviewed thus far.) If this fact pattern exists across the board, as I believe it likely does, the ‘banksters” may have just fallen on their own swords.


William Paatalo – Private Investigator – OR PSID# 49411

One Responseto “The Loans Never Made The Trusts – It’s All In The HMDA Data!”

  1. Abby says:

    what do you see for loans by New Century and any purported transfer to JP Morgan Mortgage Acquisition in or around Feb. 2006?

    JPMAC 2006-NC1.

    Or where can I look at the HMDA?

    My loan was for $782,000 – it was the only one in that pool for that amount.

    I’m still fighting for my house- since 2008!


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