Foreclosure Fraud For Dummies101: The Chains and the Stakes

Hat tip to Rortybomb website:

The first is what is currently going on with foreclosure fraud (click through for larger).

Let’s look at the creation of the foreclosure fraud:

I take a mortgage out at Joe’s Lending, a mortgage originator. A mortgage consists of two parts. The first is the note, or the IOU, which is the borrower’s promise to pay. The second is the mortgage, which is the security, or the lien, or the actual interest.

Joe’s lending takes the mortgage note to a sponsor to turn these mortgages into a bond. The sponsor was often an investment bank like Bear Sterns. Now that investment bank puts an intermediary in between itself and the trust. This intermediary is usually called a depositor, and sometimes there are several of them in the chain.

So connect the two together, and you can see why we might have a systemic crisis on our hands