A TID "Trust Identified" investigation evaluates Party claims of ownership
based on securitization of the original mortgage into a Residential Mortgage Backed Security
organized under the IRS Real Estate Mortgage Investment Conduit (REMIC) Rules.
Securitization is the complex process of taking illiquid assets, in this case individual mortgages, and placing them into a “mortgage pool” that is broken into groups called "tranches" and sold to investors. This involves a series of independent “true sales” and financial engineering by a number of different parties in order to transform the pooled mortgages into a security owned by investors, represented by a Trustee. These “true sales” are at the heart of the securitization to ensure the investors have the unequivocal legal right of ownership, without doubt, to the mortgage assets and receivables in the trust.
The financial engineering begins when the mortgages in the pool are purchased by interim parties, then resold and grouped into classes based upon mortgage type and borrower credit. The credit of these classes is then enhanced and rated by credit ratings agencies such as S&P and Moody’s. These credit enhanced mortgages are repackaged and then sold to investors. The investors may purchase insurances against default.
Investors evidence their ownership in the mortgages through certificates (notes), or debt agreements (bonds), or rights to ownership (derivatives) similar to securities meaning stocks and bonds.
The securitization legal documentation establishes beneficial ownership by the trust and loan servicing rights and authority by agreements on loans that have been properly transferred to the investors.
The TID portion of an investigation requires obtaining and reviewing many hundreds and often over one thousand pages of documentation. These can be in the form of sworn federal filings on the SEC EDGAR document retrieval system or selling and servicing guides of the Government Sponsored Enterprises like Fannie Mae and Freddie Mac. The expert examines these in detail, in order to identify and pull out particular information in pertinent part that may undermine claims of ownership, rights and authority.
We identify the documents, establish the parties, examine the chain of title and conveyance, compare the chain to the Note and Mortgage (or Deed of Trust) endorsements and assignments, establish closing dates, cut-off dates, tax status (usually REMIC "Real Estate Mortgage Investment Conduit") and prohibitions on transferring ownership after 90 days and 2 years from the start-up closing date, identify conditions of repurchase that mean the seller has to buy the loan back and then foreclose; and much more.
Claims by Trusts to own loans can be undermined when a material controversy exists between what the parties are claiming in a foreclosure and what the sworn oath federal filings and/or guidelines identify on the record.
A note claimed to evidence ownership that does not include the intervening endorsements of interim sellers and purchasers is not the holder in due course Note it is claimed to be;
A servicer claiming authority to foreclose based on holder in due course ownership by a trust has no rights when the trust ownership is undermined;
A loan claimed to be assigned or transferred after the REMIC prohibited transaction dates is a bogus claim because the tax ramifications are disastrous to the Trust and require written tax opinion attestations on the record. The records are memorialized in sworn oath federal filings and when they are not there, the claim to transfer ownership to the trust in prohibited fashion is rendered to be a falsity.