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    DID I REALLY CONTRACT WITH A CRIMINAL ENTERPRISE

     

    DID I REALLY AGREE TO A CONTRACT WITH A CRIMINAL ENTERPRISE? OR, A SHELL COMPANY SPE LLC? DID I AGREE TO HAVE MY LOAN SPLIT IN A MILLION PIECES? NO I DID NOT!!

     

    If I have a business and I contract with a certain vendor to provide goods and/or services and then that vendor sells the contract to another vendor who I would never do business with (bad reputation, unreliable, pending lawsuits, under regulatory consent orders, etc.) and I was not told my business contract was going to be transferred to this party (they knew when making the contract as the loans are originated for securitization at inception) I believe the entire transaction could be challenged.

     

    Securitization has caused many problems for property owners due to the fractional ownership and competing interest of various investment classes.  Hidden parties in interest make it hard to reach anyone to discuss loss mitigation or even to sue the true parties in interest – hidden behind shell companies -and this creates bad faith.  The many layers of insurances offer incentives to foreclose which were concealed from the property owner at time of contract, and these credit enhancements conflict with the notion that both parties to the contract actually wanted it to succeed. The servicer, another participant that the property owner had no choice in selecting, and had no choice to leave and seek another vendor, has a perverse incentive to foreclose, or push a property owner to foreclose as they are paid first before any investor gets a dime, including late fees, and all advances. All things considered, if the property owner had known all the facts before signing the contract, they would have had the option to decide if this was a contract they wanted to enter into.

     

    As a side note, even small credit unions that people would have good reason to assume were holding the paper, sold and securitized loans. Without disclosure of this material fact, a property owner has no idea if they are dealing with the party they received the loan from or if the loan was sold to a criminal banking enterprise full of shell companies, insurance fraud, and hoodlums that will shake them down and steal their properties the first chance they get!

     

    A contractual right can be assigned unless

    (a) the substitution of a right of the assignee for the right of the assignor would materially change the duty of the obligor, or materially increase the burden or risk imposed on him by his contract, or materially impair his chance of obtaining return performance, or materially reduce its value to him, or (b) the assignment is forbidden by statute or is otherwise inoperative on grounds of public policy, or (c) assignment is validly precluded by contract.

    Restatement (Second) of Contracts § 317(2) (1981). PREMIUM CIGARS INTERNATIONAL, LIMITED v. FARMER-BUTLER-LEAVITT INSURANCE AGENCY, 1 CA-CV 03-0310, Ariz. Crt of Appeals, Opinion filed 8-19-04

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