The Map of the Iceberg of Toxic Foreclosure/Richard F. Kessler


The inappropriate use of toxic documents which has become the subject of extensive media coverage is only the tip of the iceberg of toxic foreclosure, what some legal experts describe as a fundamentally-flawed and fraud-ridden mortgage market — fraudulently-underwritten loans that passed through a maze of institutions that failed to properly maintain basic paperwork or follow legal procedures in bundling, securitizing and ultimately selling those mortgages to investors A mountain of liabilities has been created as a result the process for funding, originating, selling, conveyancing, servicing and insuring the sale of mortgages to mortgage backed securities trusts (MBST) which issued certificates to investors. Below is a catalogue of liability exposures precipitated by toxic foreclosure of securitized mortgages. It is likely incomplete, and others might choose a different classification system. Nevertheless it does provide a broad, accurate overview of the entire spectrum of problems. It seeks to allow the user to fit a piece of the puzzle into the greater whole.

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