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hi I'm Neil Garfield of the Garfield continuum and the author of the living lies blog at www.andyjenkins.com of what we're talking about number one we're talking about securitized loans number two we're talking about residential mortgages number three we're talking about the actual process the details of what happened in the securitization of the typical residential loan now these issues don't go to predatory loan practices per se but they have their own impact on the recording requirements of various documents the timing of those documents and they also have their own impact on the APR that is stated in the Good Faith Estimate given to the borrower before closing and of course we all know that sometimes the GFE which is the Good Faith Estimate is not given to the borrower until at or sometimes even after closing which is a violation unto itself but the purpose of this section is to alert you to the issues that are involved in the securitization of mortgages and the first thing I want to tell you is that there are two pools not one everybody gets this issue confused and for good reason Wall Street wants you to be confused lawyers for the Pretender lenders want you to be confused so let me take you briefly through the history of a loan as it goes through the securitization chain the loan is originated by some entity usually it's a front organization for some Wall Street entity that loan is then transferred or transmitted into a pool of assets and that pool is subject to a pooling and service agreement which is the subject matter of another segment that you will be able to see if you want to the trustee or entity that controls that pool sells the pool or part of the pool to a special purpose vehicle which means that the assets of the first pool are transferred into a second pool or sometimes multiple second pools as the investors are putting in money to purchase the assets of the pool the investors do not purchase the assets of the first pool they purchase the assets of the special purpose vehicle pool now this segment has two with the beginning of the process this segment has to do with the assignment and assumption agreement and there are a lot of interesting issues which are extremely important for you to know in terms of preparing questions in a qualified written request or questions in a debt validation letter or discovery which is the subject of another segment that we have discovery includes of course interrogatories where you pose questions to the other side and they must answer those questions requests to produce involves just what it sounds like a request it's really a demand that they produce certain documents and of course your request for production will be aimed at those documents which would support their point of view or their position or might support yours requests for admissions are exactly what they sound like you say please admit that you're not really the lender if they fail to answer that then they are admitting it if they've admitted it and you don't have to prove it and there are other forms of discovery including depositions and so forth which we get into in litigation strategies and motion practice all different segments of our series here so let's talk about what happens in reality not the way you see it on the internet not the way you see it in the books that talk about derivatives and how they're created and when they're created and so forth here's how it really happens Wall Street has investment bankers these are people who are there to take risks they are there to create instruments financial instruments that increase liquidity in the financial markets you can't blame Wall Street entirely for what happened because it would be like blaming a soldier for shooting bullets in the battlefield it's kind of what he's there for but what Wall Street did was they took it one step further and which is why there's plenty of blame to go for to them and why opportunities exist to challenge virtually any mortgage that were securitized whether it is delinquent or not whether it's in foreclosure or not so let's look at the beginning and the beginning starts with the end wall street has investment banks they create special-purpose vehicles those special-purpose vehicles in most cases have an attachment to their documentation which is like a spreadsheet saying that these are the mortgages and notes that are the assets of this pool within the special purpose vehicle if you look deep into the documentation of the SPV the special purpose vehicle you will find that what has been sold to the investor is two things a bond which promises an interest rate and a return of capital and an ownership interest percentage ownership interest in the pool you