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RMBS's Kindly Explained by Westpac

Posted by on in RMBS SECURITISATION
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Dissecting RMBS Fraud in Action

This information is courtesy of Thomas Anderson of www.theclassifiedfiles.com.

This notice from WESTPAC Australia might seem innocent enough. It’s just a public notice...right?

 Let’s dissect the fraud that is happening right in front of your eyes.

[Color variations and bolding are the author's to show several named companies.]

 ~~~~~~~

PUBLIC NOTICE

WESTPAC MORTGAGE SECURITISATION DISCLOSURE

In the interest of public awareness and to ensure that Mortgage Holders with Westpac are given full disclosure of the details of their loans, please be advised of the following announcement:

Westpac Banking Corporation in association with JP Morgan (Australia) Limited, Perpetual Trustees, Waratah Receivables Corporation and Westpac Securitisation Management Pty Limited have been involved with a number of Residential Mortgage Securitisation programs including:

Series 2002-1 G WST Trust

Series 2007 - 1G WST Trust
Progress 2010-1 Trust (AMP Bank)
REDS Trust Series 2010-1 (Bank of Queensland) Torrens Series 2010-1 (Bendigo and Adelaide Bank)

Each of the Trusts are comprised of a pool of Residential Mortgages that Westpac originates and sells to a Trustee such as JP Morgan Trust Australia Limited, Perpetual Trustees Limited or Waratah Receivables Corporation. 

In each instance, the Trust gains equitable title to the Residential Mortgages as a result of the assignment.

The Mortgages are then pooled into Tranches, within what are termed "SPV's" or Special Service Vehicles and then Notes or Commercial Paper are offered to Investors on the Secondary Market backed by these securities.

You will not have received notice of the sale or assignment of your Mortgage, as that could create a Title Perfection Event and collapse the Trust.

To prevent this, the Trusts have hired Westpac as the Servicer of the Loans, under a Pooling and Servicing Agreement so that we may continue collecting mortgage repayments and interest from you, to pass onto them.  

In that way, you will not realise that there is any material change.

We have ensured that at a branch level, our staff will not be aware of any assignment of your Mortgage, and as such will not be able to offer any assistance in the matter.

Thank you for your business.

WESTPAC BANKING CORPORATION

for further enquiries, please contact:

Manuela Ad - Westpac Securitisation Management Pty Limited

Chief Operating Officer Level 20, 275 Kent Street, Sydney NSW 2000, Australia Westpac Banking Corporation +612 8253 3589
575 Fifth Avenue, 39th Floor
New York, New York 10017
J.P. Morgan Trust Australia Limited
(ABN 49 050 294 052)

~~~~~

This is a notice that was sent to Australian homeowners who had their loans with WESTPAC (a major bank). The laws in Australia require that they notify the creator of the promissory note of changes to their negotiable instrument.

You've got to love how they cleverly crafted the letter like you’ve got nothing to worry about.

First, notice that they tell them that the loan is going to be pooled into a SPV (for the purpose of tax pass through).

Second, notice the sentence: “You will not have received notice of the sale or assignment of your Mortgage, as that could create a Title Perfection Event and collapse the Trust.” Knowing what we know about securitization, it is true. They DID NOT do a formal assignment (therefore, the title is not Perfected).

Perfected title, according to Black’s Law dictionary, means that the title of an instrument has been properly recorded in public record reflecting the proper and true owner of the instrument.

So, monetarily and accounting-wise, they sold and assigned the note. Procedurally and legally, the note was never sold.

Next, pay attention to this: “that we may continue collecting mortgage repayments and interest from you, to pass onto them.”

They are then collecting the proceeds and interests and passing it onto (and directly) to the shareholders of the REMIC (SPV).

Finally, this is the clincher: “In that way, you will not realise that there is any material change.”

What they are saying is, “we’ve just created an unlawful assignment, but we don’t want you to realize that we did it.”

And, by the way, this fraud happens at the highest level of banking...don’t worry about talking to your branch staff about it, they wouldn’t know.

“We have ensured that at a branch level, our staff will not be aware of any assignment of your Mortgage, and as such will not be able to offer any assistance in the matter.” 

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Comments

  • doyla66
    doyla66 Sunday, 26 August 2012

    What a classic piece of double speak!

  • doyla66
    doyla66 Sunday, 26 August 2012

    Another good one STM:D

  • doyla66
    doyla66 Sunday, 26 August 2012

    Reading it twice, this is a real class find by STM. I hope one of my fellow bloggers will follow this one (I would if I didn't have other 'blog' jobs to do for BFCSA).

  • doyla66
    doyla66 Sunday, 26 August 2012

    I'm glad STM explained it. What Westpac wrote was a bit rough on any mortgage holder that was starting from ground zero in RMBS 101. Of course all Westpac customers just trust Westpac to get it right and probably don't even read what's sent to them ....

  • doyla66
    doyla66 Sunday, 26 August 2012

    Sounds like the plot of the movie "Too big to Fail movie" - but this time - the Australian version

  • doyla66
    doyla66 Wednesday, 14 November 2012

    Good one STM. I think that the CBA have just sent me confirmation that my loan has also been securitised. It was just a single 1 page sheet, buried amongst a whole load of other documents, that reads : SECURITISATION DOCUMENT & File Checklist.
    It has the name of the CONVEYANCER (BLACKED OUT by the CBA.)
    It also has the name of the DOCUMENT CUSTODIAN (BLACKED OUT by the CBA.)
    Any idea's how we can confirm this?

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