If no one know who holds what mortgages then how do investors get paid?

[ThomWV]

This has always been a mystery to me. If bundling and rebundeling and financial machinations beyond the imagination have left the mortgage mess with no clear paper trail identifying who owns what then how do payments from unforclosed mortgages find their way to the appropriate investors? If there is no paper trail from mortgage to investor then this question vexes me.

[Skink]

1. That is one thing that is keeping some people in their homes.

[Wildewolfe]

4. I think the question he's asking..

..is when you make that mortgage payment, if everythings been rebundled and such so many times, how do you know it's going to the right place.

The thing keeping persons in their homes right now carries with it a nasty question for folks in unforclosed homes. Are you actually paying on your mortgage or will two or more "owning entities" try to start collecting from you? If so who do you pay? If you payoff your mortgage to one company and they don't actually have the note how do you get clear title to the property? The secondary questions the legal defense raises at least to me are a tad concerning.

[Donnachaidh]

2. I wouldn't be surprised if a second or third set of books was involved somewhere

Seriously - think about it. These people were creative enough to come up with CDO's and such. They would be REQUIRED to prove to future investors that the money will make it to them. I think, the *no paper is available* line is thrown out there because there may, in fact, have been more illegal moves and deals put out there than the banks and mortgage companies will ever admit to freely.

We've only scratched the surface on the crimes.

[kentuck]

3. Perhaps that is why it is so hard to produce the original document?

Each of these banks and mortgage companies sold off the mortgages at a profit so it is possible that each of them has to pay the original amount of the mortgage when they purchased it? But, you ask a good question. Should not the final party holding the mortgage be responsible for that mortgage? But they have been sold around the world in bundles and no one knows where they are??

[Dreamer Tatum]

5. Welcome to the wonderful world of servicing

You make a payment to the servicer, who in turn makes deposits to the master trust, which
disperses cash based on the specifics of the securitization tranche, and so on, and so on.

People are keeping track.

[FarCenter]

6. The mortgage papers should be archived by the "servicer".

The servicing organization is the one that communicates with the mortgagee to collect the money.

The holders of mortgage backed securities or collateralized debt obligations don't hold the mortgages. They have bonds that are backed by the mortgages and they have defined rights to payments of interest and principle.

The servicer retains part of the money collected as fees for service.

The servicer may also collect escrowed taxes and insurance fees on the property, which would be remitted to the tax jurisdiction and insurance company.

http://www.hud.gov/offices/hsg/sfh/res/rightsmtgesrvcr.cfm

[Bonhomme Richard]

7. It turns out that we are the investors and.......

No. We are not going to get paid.