Jean Keating Transcript – not for re-sale
“Securitization is Illegal”, 30pg, by Michael Magugu, CPA, www.ssrn.com/abstract=hh3300 - It
is only illegal for private corporations.
Securitization: The process of homogenizing financial instruments into fungible securities, so
that they are sellable on the securities market.
When you sign a mortgage note it comes under UCC Article 3. After securitization, it comes
under Article 8. Under US law securitization is illegal because it is fraudulent. Instruments such
as loans, credit cards and receivables, are securitized. Enron was involved in securitization and
someone brought charges against them. But almost all large corporations are doing it as usual
business. However, the banking system and the government are also doing it.
Jean Keating brought a RICO suit against a bank, but it was thrown out. But he would have done
better now that he knows more about it.
It is all accounting, whether it is banking, civil or criminal court. I submitted the FASB
regulations – FAS125 securitization accounting, FAS140 Offsetting of financial assets and
liabilities, FAS133 derivatives on hedge accounts, FAS5, FAS95. These are the resource
materials for understanding this process. The note is not under a negotiable instrument any more,
it is a security. All the banks follow these standards. They set up GAAP, generally accepted
accounting principles. The banks are mandated by Title 12 USC to follow GAAP and GAAS.
They have a local FASB and an international IFASB. They also cover derivatives. FAS 140
relates to UCC 3-305, 306. If you want to instruct them on how to do offsets, you have to refer
them to FAS 133. If you don’t know the accounting regulations, you can’t give them the proper
instructions for settling and closing. What you really want is recoupment.
Recoupment – (1) The recovery or regaining of expenses Applying the setoff so you can get
back what you gave and what you are entitled to. (2) The withholding for the equitable