SECURITIZATION: The inventor of mortgage securitization, Louis Ranieri, said this about the 2008-09 crisis:
"When interest rates go up and refinancings end, the industry has to contract. It's never fun. But at the end of the last cycle in 2004-2005, all of a sudden - and some of us think not accidentally - instead of normal contraction we had this amazing growth of the subprime industry. It distributed the benefit of home ownership to people who never would have qualified for mortgages otherwise. That was one of the excuses: In the name of trying to enfranchise everybody, we started creating unstable loans that were designed to blow up in two years. Now the loans needed the tooth fairy to keep up their values.
There's an old Wall Street adage that there's a nexus between fear and greed. If you diminish fear, you get more greed. People got braver issuing this stuff. All the participants felt they could act merely as agents and collect fees. Nobody was prepared to say 'I have liability.'"
In securitization, the banks placed hundreds of mortgages in trusts. They made digital copies of the mortgages in a separate corporation. But they often forgot about the Notes that the mortgages secure. If a bank doesn't hold the Note, under New York Law it cannot foreclose. You need an attorney who can present this defense for you. I'm that attorney.
I attended the University of California at Berkeley Harvard Law School. My areas of practice are administrative law, Chapters 7 and 13 bankruptcy; see the bankruptcy tab. I am also expert in foreclosure defense. See the foreclosure defense tab.