Jan 04, 2011
The mortgage-ownership map (get a GPS)
04 Jan 2011
Posted by Andrew Kantor
You can’t take three from two,
Two is less than three,
So you look at the four in the tens place.
Now that’s really four tens,
So you make it three tens,
Regroup, and you change a ten to ten ones,
And you add them to the two and get twelve,
And you take away three, that’s nine.
Is that clear?
–Tom Lehrer, "New Math"
[UPDATE: Image replaced with full-size copy (click to see it).]
You probably know the basics of the whole mortgage-securitization thing. The bank you get your mortgage from sells it to someone else, who splits it up and mixes the pieces with lots of other mortgages.
The end result is that, while it’s easy to know who services the mortgage (hint: it’s the place you send your payment), it’s not so simple to figure out where the rest of it goes — and the whole MERS mess doesn’t help.
Well, along comes one Dan Edstrom. He audits the whole securitization trail (such as it is) for a living. At one point, for reasons I don’t know, he created a flow chart for a single mortgage.
It’s below; click for the full-size version. I don’t think any more needs to be said.
Originally from Zero Hedge.