The Resolution Law Group, P.C., is a premier boutique law firm engaging in high-stakes commercial and private disputes, encompassing a broad range of legal services. With a national complex litigation practice and a strategic alliance of contract litigators and law firms, seasoned in targeted legal disciplines, The Resolution Law Group has emerged as a firm taking on consumer advocacy at the national level.
The Resolution Law Group has a reputation for a “bet the company” commitment and in its efforts to prevail in cases where the opposition is formidable and more securely funded. This area of “Complex Tort Litigation”, at its broadest base is cutting edge, and focused on the lending abuses of the nation’s leading residential lenders, and the impact of those practices on the national economy.
In lender litigation, one specialized arena, The Resolution Law Group is engaging institutions that have comparatively unlimited financial resources. As we now know, the nation’s largest financial organizations, who have been found responsible of fraud, continue to avoid their moral and financial responsibility to the American Homeowner. Through Complex Tort Litigation, the firm is leveling the playing field and holding these defendants accountable for violations of state and federal laws.
Mortgage Securitization is the financial practice of pooling various types of contractual debt such as residential mortgages, commercial mortgages, auto loans or credit card debt obligations and selling said consolidated debt as bonds, pass-through securities, or collateralized mortgage obligation (CMOs), to various investors. The principal and interest on the debt, underlying the security, is paid back to the various investors regularly. Securities backed by mortgage receivables are called mortgage-backed securities (MBS), while those backed by other types of receivables are asset-backed securities (ABS).
Critics have suggested that the complexity inherent in securitization can limit investors' ability to monitor risk, and that competitive securitization markets with multiple securitizers may be particularly prone to sharp declines in underwriting standards. Private, competitive securitized mortgage is believed to have played an important role in the U.S. subprime mortgage crisis.
In addition, off-balance sheet treatment for securitizations coupled with guarantees from the issuer can hide the extent of leverage of the securitizing firm, thereby facilitating risky capital structures and leading to an under-pricing of credit risk. Off-balance sheet securitized mortgages are believed to have played a large role in the high leverage level of U.S. financial institutions before the financial crisis, and the need for bailouts.
The granularity of pools of securitized mortgage is a mitigant to the credit risk of individual borrowers. Unlike general corporate debt, the credit quality of securitized mortgage is non-stationary due to changes in volatility that are time- and structure-dependent. If the transaction is properly structured and the pool performs as expected, the credit risk of all tranches of structured debt improves; if improperly structured, the affected tranches may experience dramatic credit deterioration and loss.
You Might Have A Legal Securitized Mortgage Case If…
Your broker falsified your income.
Your broker hid his or her fees.
You weren’t immediately given a copy of the good-faith estimate and weren’t given an accurate HUD-1 statement breaking down all fees at closing.
After signing the contract to refinance your mortgage, you didn’t walk out with a “notice of recission” that explains your rights to cancel the refinance within three business days.
You were led into a subprime loan although your credit would have qualified you for a better loan.
Your mortgage company lied or decieved you.
Your loan was securitized.
Your loan transaction was handled by MERS.
You were denied for a Loan Modification.
The Resolution Law Group: SECURITIZED MORTGAGE ARTICLES
The Resolution Law Group: THERE IS NO SUBSTITUTE FOR PERSONALIZED CLIENT SERVICE BACKED BY KNOWLEDGE, EXPERIENCE AND PERSONAL COMMITMENT.
The Resolution Law Group: Bank of America defrauded investors of ‘prime’ mortgage securities in Securitized Mortgage Fraud
Securitization is the process of taking an illiquid asset, or group of assets, and through financial engineering, transforming them into a security.
A typical example of securitization is a mortgage-backed security (MBS), which is a type of asset-backed security that is secured by a collection of mortgages. The process works as follows:
First, a regulated and authorized financial institution originates numerous mortgages, which are secured by claims against the various properties the mortgagors purchase. Then, all of the individual mortgages are bundled together into a mortgage pool, which is held in trust as the collateral for an MBS. The MBS can be issued by a third-party financial company, such a large investment banking firm, or by the same bank that originated the mortgages in the first place. Mortgage-backed securities are also issued by aggregators such as Fannie Mae or Freddie Mac.
Regardless, the result is the same: a new security is created, backed up by the claims against the mortgagors' assets. This security can be sold to participants in the secondary mortgage market. This market is extremely large, providing a significant amount of liquidity to the group of mortgages, which otherwise would have been quite illiquid on their own. (For a one-stop shop on subprime mortgages, the secondary market and the subprime meltdown, check out the Subprime Mortgages Feature.)
Furthermore, at the time the MBS is being created, the issuer will often choose to break the mortgage pool into a number of different parts, referred to as tranches. These tranches can be structured in virtually any way the issuer sees fit, allowing the issuer to tailor a single MBS for a variety of risk tolerances. Pension funds will typically invest in high-credit rated mortgage-backed securities, while hedge funds will seek higher returns by investing in those with low credit ratings.