Sprechen sie Deutsche Bank? (Or, how do you say RMBS in German?)

At the close of business Monday — the close of business for 2007 — Deutsche Bank, a German corporation with no offices closer to here than New York City, was the “owner” of 970 Cuyahoga County properties. 616 of these properties are in the city of Cleveland.

All of them are, of course, foreclosed buildings or lots. Almost all are houses (many of which are multi-unit, which means the number of residential units in DB ‘s name is significantly larger than 970). And most, if not all, are vacant.

Who actually owns all these properties? Not Deutsche Bank, of course. Deutsche Bank is a trustee, a stand-in, for the real owners — large investors who bought shares in securitized investment pools of mortgages (Residential Mortgage Backed Securities, or “RMBS“es) created by the original mortgage lenders, and are now losing their shirts.

These real owners’ names don’t appear on the Auditor’s records. But you can often find some version of a RMBS’s name on the actual deed, or the Sheriff’s sale record. And then you might be able to deduce the name of the company responsible for servicing the property (i.e. disposing of it) by looking up the “pooling and service agreement” for that particular RMBS, which might be on line. If you’re lucky.

Remember when we did this for a house down the street from me?

Here are the real owners of a few other “Deutsche Bank properties” in Cleveland, picked at random:

It seems at least two-thirds of the foreclosed houses for which Deutsche Bank is the named trustee are owned by RMBSes created (and originally serviced) by Cleveland’s subprime champ Argent Mortgage and its older sibling Ameriquest. Both companies have now gone belly up, with their servicing contracts absorbed by a Citicorp subsidiary, Citi Residential. But dozens of RMBSes bearing the Argent and Ameriquest names go marching on, under the Deutsche Bank flag.

Who are the others?

“GSAMP” is short for Goldman Sachs Alternative Mortgage Product. Goldman Sachs has created and peddled more than 50 RMBSes, one of which (not 2005-HE3, but also trusteed by Deutsche Bank) was dissected in this extremely enlightening Fortune article in October.

Long Beach Mortgage is a subprime subsidiary of Washington Mutual Bank of Seattle. There are at least thirty RMBSes under the Long Beach name, (and more than twice as many under “Washington Mutual”). Deutsche Bank seems to be trustee for most, if not all, of the Long Beach RMBSes.

New Century Mortgage was the nation’s second biggest subprime mortgage lender (after Countrywide) until it declared bankruptcy last April. It created more than 30 RMBSes before its demise, most if not all using Deutsche Bank as trustee.

Morgan Stanley is… well, Morgan Stanley. Huge investment bank and financial services company, currently writing off billions of dollars in losses from investments in RMBSes and other funky asset-backed securities. Among its hundreds of RMBS deals, in 2004-2005 Morgan Stanley created five investment pools of mortgages (apparently originated by Ocwen and Countrywide) with a company called CDC Mortgage Capital listed as “independent seller”. Deutsche Bank is the trustee of four of these pools and “custodian” of the fifth.

That’s just a small sample of the scores of RMBSes that now own nearly a thousand Cuyahoga County properties (with something like two thousand more in the foreclosure pipeline for 2008) just in Deutsche Bank’s name.

(c/p CCD)

Advertisements

Leave a Reply

Please log in using one of these methods to post your comment:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: