The deal offered to and accepted by the the real lenders (creditors/investors) who ended up being trust beneficiaries to an unfunded trust with no assets, was that there would be multiple co-obligors so there was practically no way on earth that the investor could lose money --- except of course in the case of fraud.
AND fraud is what happened because the co-obligors were part of a vast system in which the loans were not securitized, not collateralized and not enforceable by any of the parties who seek enforcement.
They ARE enforceable by investors but only under implied contract theory; and because the title to the loan was stolen by intermediaries the mortgage encumbrance to secure the debt is simply not there. But it is being treated as though the mortgage encumbrance was valid. Eventually you will start seeing decisions that nullify the mortgage, nullify the note as to enforcement or but use the note as partial evidence of part of the deal.
The contract that the investor relied upon when he made the loan, includes multiple parties, none of which were disclosed to the borrower and most of which received very liberal compensation that was also not disclosed to the investor or the borrower. Whether disclosure was required to the investors is not my concern. But disclosure to the borrowers is obviously required but was routinely and universally ignored.
Dan Edstrom has provided his list of parties. As a senior securitization analyst, this is pretty complete. The point here is that the party borrowing the money agreed to a different deal than the the one offered by the lender. Neither the lender nor the borrower truly understood that they were both getting screwed in much the same way. And as most of you know, the Banks will do ANYTHING to stop borrowers from meeting up with lenders to compare notes. The conclusion of that meeting would most likely end in jail time for thousands of people. Here is a list of the co-obligors, conduits, transactions in which intermediaries claim (or have, with or without knowing it) some interest in the "securitized" transactions (i.e., the loans):
FDIC Repurchase Agreements
pool insurance provider
certificate guaranty insurance policy
each investor (subordinate, mezzanine, non-offered, etc.)
fraud insurance policy
bankruptcy insurance policy
originator (buy back agreements)
sponsor (buy back agreements)
depositor (buy back agreements)
Letters of credit
Blanket Fidelity Bond
Mortgage errors and omissions and professional liability insurance policy