The Pooling and Servicing Agreement (PSA) the Court refers to, specifically lay out the the formula for Mortgage Back Securities (MBS). Typical these investment were done over the counter (OTC) at trading houses as private contacts.
You’ll see many lawsuit filed in New York or moved to New York concerning MERS and/or mortgages that were ‘pooled’ because the PSA originated on Wall Street and is the controlling document.
Of course MERS made many copies of mortgage loan documents and attached then to many PSAs for the investment collateral but basically used one mortgage in 20 different PSAs (derivatives) while the one mortgage should have only been used once.
Then using credit default swaps, Wall Street bet against the MBS (knowing they would fail) sometimes selling Swaps with the more risky MBS as an enticement to get the buyer to purchase as insurance against non-performance of the MBS.
The bank that first gave the house loan only remains as the servicer i.e. collects the payments (for a small fee now) and forwards the remaining balance to a chain of investors (MBS)...that’s how it supposed to work.
The PSA was not honored because a note with the attachment showing all investors is missing or more likely non-existent due to fraud... a no brainer if the Court asks for the note and it isn’t produced, then there is no legal claim to the property.
Where’s the note or any note that was used in 95% of all loans used in a MBS? I don’t know but I can tell you where the MBS ended up and 95% of all loans given out the last 10 years....with the GSEs like Freddie and Frannie which in turn sticks the taxpayers with the bad paper and still no note.
TARP made all the credit default swaps good as there was not enough collateral (property mortgages) to cover the bets made. Too big to fail was actually to big to lose or, if you will, a guaranteed winning fraud position.
Aside: Alphabet soup deciphered here...
Let us not forget that not only are many of these banks uninjuryed parties to begin with as they have already been paid back the money from the investors, but many of them have been paid a secondtime after the foreclosure, because they sold the house for what it was worth and then turned around and claimed and were paid money from the mortgage insurance for the difference and all the while they were making money hand over fist from fees being charged to both the borrower and the investors. Nice tiddy sum and that doesn’t even included the TRAP money they got to help them with their ‘losses’.