SECURITISATION OF MORTGAGES - who 'owns' your mortgage?

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M O'D:
The question - "Who owns my mortgage?" will become increasingly prevalent over the coming months. This article, from the Guardian, is full of the usual disinformation about what money actuallly is and how the banks create it. Nevertheless, it does provide an interesting angle on the nature of state corporatism - UKAR was set up by the government as a kind of holding company, set up to manage the interests of the mortgage arms of the Badfume and Burgle and Northern Crock. Interestingly, Richard Pym, CEO of the Badfume and Burgle has since 1 October 2010 been the CEO of UKAR

--- Quote ---With 750,000 customers, UK Asset Resolution, set up to run the nationalised mortgages of Bradford & Bingley and parts of Northern Rock, is the country's fifth largest mortgage lender. But 23,000 of those mortgage holders are more than six months behind with payments and Banks admitted the projections for the number of people falling behind on payments could get "scary" if lenders did nothing to prepare for higher rates
--- End quote ---

It also leads one down the avenue of securitization - the practice of bundling up mortgages into saleable packages which are brought by Special Purpose Vehicles like Aire Valley and Granite, legal entities created as beneficiaries of mortgage (backed securities), often owned by the very lenders themselves. This would appear to be a classical example of a Ponzi pyramid scheme.

Further investigation lead me here from 2008 it states
--- Quote ---The bank has £11.1bn of mortgages in its Aire Valley master trust securitisation programme, which is triple A-rated. However, action taken by the three main rating agencies to downgrade B&B’s own credit rating after its profit warning means the bank does not meet the sufficiently high rating required under the interest rate swap that it provides to the Aire Valley trust.

B&B has to take action within the next 30 days and has three options. Besides injecting additional cash, it could replace itself as a counterparty with an intermediary, or bring in a guarantor, with an appropriate rating.
--- End quote ---
For more on Aire Valley see

Subsequent to this, the BnB was nationalised by the UK Government. 

This is from one of the comments on the Guardian page
--- Quote ---Apart from the inhumanity and the sheer indignity of ordinary people having to suffer because bankers thought it would be a wheeze to bundle mortgages together and sell future payments on them in advance, it's yet more short-sightedness; the bankers want your money to boost their capital ratios.
--- End quote ---

With regard to the eviction of remi and michael , then it would appear that, in effect, we have state corporatism behind it. Which would suggest the failure of a government agency to correctly apply the Law of Mortgages and the Courts to fail in the same, means that failure of the law to provide remedy, renders it null and void - a case of one rule of the rich and/or criminal elite, being applied exclusively for its benefit, with the people denied the same.

The fraudulent banking system and the lawlessness displayed by most of Her Maj's Court Service who continue to find in its favour is teetering on the verge of collapse. Imagine what would happen if every one of those 23 000 with 6 months of arrears on their unenforceable mortgages simply refused to budge? Wouldn't be great if we were able to notify them all of the fraudulent nature of their mortgages? Imagine, imagine!  ;D

Happy days?


...........and so we started playing THEM? at thier own Game BUT they didn't want to PLAY!? How sad!, that thier world has collapsed around them and i really did aspire once to be just like them? until i stepped beyond that painted veil, realised i had a conscience, Soul.



You may be interested to know that UKAR's business model is rather strange. Far from "mananging" Northern Rock and B&B's mortgages, it's aim is to get rid of all the customers.

They also waste a phoenominal amount of money on contract managers and contractors in general and missed a deadline to deliver a merged IT system of NR and B&B's mortgage books by November (now put back to February) for which I've heard they've been fined £10 million. (possibly)

Incompetent? Not many, but then again, what do you expect of a government run organisation?

Oh, your man Richard Pym lasted as CEO 9 months, the current encumbent is Richard Banks, should you wish to contact him. They seem to make a habit of employing Dicks.


M O'D:
--- Quote ---
March 20, 2011 10:56 pm

UK Asset Resolution seeks post ‘bad banks’ role

By Sharlene Goff and Patrick Jenkins

The company charged with shrinking the troubled loan books of Northern Rock and Bradford & Bingley is hoping to secure a future beyond winding down the £80bn portfolio by running mortgages for other lenders.

UK Asset Resolution, formed last year by the merger of the two state-owned “bad” banks, is looking at whether it could reinvent itself by offering back-office services to new lenders that may enter the market as the economy recovers, say people with knowledge of the company.

UKAR’s priority is to repay the outstanding £48bn government loan that formed part of the bail-outs of Northern Rock and B&B. Any change in direction is unlikely until it has made more headway in running down its risky mortgage book.

But analysts say broadening its service offering would be a logical way to sustain the business as the legacy loans are repaid. It could also pave the way for a return of UKAR to the private sector as an established service company that could eventually be sold off.

Little competition exists for the outsourcing of mortgage services. HML, which is owned by Skipton Building Society, is one of a handful of providers.

Analysts say increasing the availability of back-office support – such as processing loan applications, credit checks and overseeing records – could encourage new lenders or foreign banks into the market as they would not have to build their own infrastructure from scratch.

UKAR is investing heavily in its business in spite of being in rundown. It is spending £60m on upgrading its IT systems, a move expected to reduce costs by £40m per year, according to people familiar with the company.

Later this month UKAR is expected to reveal that it was profitable in 2010, in stark contrast to Northern Rock’s still lossmaking “good” bank.

However, the group could run into further difficulties this year as unemployment rises and higher taxes start to bite. One big threat is rising interest rates, which could push up its customers’ mortgage payments to unaffordable levels.

UKAR’s arrears rate runs at about double the industry average and people close to the company say it could rise further this year.

About 10 per cent of the group’s 850,000 borrowers are experiencing financial difficulty. Many of Northern Rock’s customers took out high loan-to-value mortgages at the peak of the property market. Fraudulent lending on buy-to-let properties badly hit B&B.

Running down the £80bn mortgage portfolio is a slow process. It relies on borrowers paying back their loans, with the majority expected to be repaid within ten years. The process could be accelerated by selling packages of loans. UKAR is not thought to have had high enough offers to make sales worthwhile.
--- End quote ---

M O'D:
From the CEO of UKAR, Richard PYM (Lien Debtor  ;))

--- Quote ---We achieved the targets we set ourselves for 2011.  The underlying profit of the combined businesses increased
from £444m in 2010 to £1,089m in 2011.  This was achieved after the interest rate we pay on some of our
Government funding increased to more commercial levels.  Total remittances to the taxpayer including
repayments, interest, fees and corporation tax increased from £1.6bn to £2.8bn.   
The number of customers in arrears by 3 months or more reduced from 38,500 to 33,200 contributing to the new
provisions for loan impairment falling from £1,089m to £390m.  We reduced customer balances from £83.5bn to
£75.3bn which enabled us to repay £2.15bn of Government loans but we still remain the 6th largest mortgage
provider in the UK.  Operating expenses fell from £278m to £221m. ...
We are very conscious that we currently owe HM Treasury directly and indirectly £46.6bn and it is our
expectation and our determination to repay that debt in full without loss to the taxpayer.

 Richard Pym 
1 March 2012

--- End quote ---



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