FMII Mgte Funds

DMII™ - Default Mortgage Insured Investment Funds™ -
BMII™ - Bankruptcy Mortgage Insured Investment Funds™
IMII™ - Investors Mortgage Insured Investment Funds™

Mortgage Meltdown Solutions for Credit and Capital Markets

New Product: Credit Risk Insured Options on Futures Events™ (“CRIOFE™”) |
New Mortgage Pool Securitization Credit Enhancements for Credit Ratings
The Regulator: Commodity Futures Trading Commission (CFTC) Principles Based Self -Regulation & Self-Certification; US Futures Exchange (CBOT/CME/ICE)

FMII™ (DMII™, BMII™, IMMI™, etc.) was created by Attorney Rydstrom and published by the 110^th Congress on the problems and solutions facing the middle class, homeownership and retirement. “Risk must be paid for, or the price risk formula will be corrupt. It is simply silly to expect one who can’t afford something to pay extra with “monthly cash” that they don’t have. “Price” can be paid with non-cash items, or “cash-equivalents” and “non-cash” risk mitigation devices or (tradable insured) funds. Hedge funds and private equity are uniquely poised to “help” us solve this problem, if we call on them.”

These funds are also positive external credit enhancements used to enhance credit ratings (used by credit rating agencies to rate investment/pools). These funds are a hybrid between traditional options and binary event futures, with insurance. These options are tied to an underlying “financial instrument” (mortgage/pools and mortgage insurance and title policies) and an event futures (contract). The event futures is the probability of an event occurring. Until now, the only futures contracts listed relied on the “price” of a commodity, such as soybeans or interest rates. These contracts offer futures and option traders a trade testing probabilities in the credit derivatives world, trading price vs. risk on credit events like default swaps, and capturing “event risk” such as merger events, but now for the first time also “credit risks” for mortgage loan pool investments betting on related Foreclosure events, Default events, Bankruptcy events, and Mortgage Investor and Insurer Loss events. These funds are also partially backed by new flexible payment mortgage insurance products.

In part, much like binary options on the target Fed Funds rate listed by the CBOT, where the price of the event future is the probability of the event occurring, the buyer of the contract holds the right to collect a “fixed payment” if the event occurs, and the Seller collects the difference between the sales price and zero if the event does not occur.

These funds would produce “certainty” in supplying funds necessary to, advance investor shortfalls for lost payments of principal and interest on non-performing assets (DMII, IMII), and return (residential) real estate from a foreclosed posture (FMII, BMII) back to the resale market with less loss severity in non-performing assets (REMICS), thereby stabilizing home prices and avoiding price decline severity plaguing the real estate markets today. Loan pools would receive payments necessary for curing loan by loan deficiencies for carrying expenses such as Taxes and Insurance, and Property Preservation (P&P). Funds would build equity and certainty and act as a limited surety for mortgage loan securitizations.

The Regulator: CFTC Self-Certification; US Futures Exchange (CBOT/CME/ICE):

These new products will allow the “self-certification” process afforded by the Exchanges by its regulator, the Commodity Futures Trading Commission (CFTC). The US Futures Exchange is taking on a new direction and commitment to introduce innovative products by the listing and pricing of the “merger” between the Chicago Board of Trade (CBOT) and the Chicago Mercantile Exchange (CME) (and contracts with CME and ICE (Inter Continental Exchange). The US Futures Exchange was formerly Eurex US and is a joint venture between Eurex and Man Group. US Futures Exchange trades clear through The Clearing Corporation, formerly the Board of Trade Clearing Corporation.

Business and industry has the ability to introduce new innovative products that trade the risk benefit of mortgage investment funds that can supply the defects or holes currently found in the Shadow Banking System (www.shadowbanking.com); which failed our securitization system. We cannot just seek governmental (regulatory) or legislative solutions without addressing the need to fix the core problem revealed in non-agency (jumbo) markets during the mortgage meltdown.

See the Statement of Commissioner Bart Chilton Regarding Secretary Paulson's Treasury Department Blueprint on Regulatory Reform March 28, 2008.

www.bankriskmitigation.com

Mortgage Foreclosure Industry & Congressional White Paper

More Info

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TID™ - Truly Intelligent Disclosures™ - TID™ was created by Attorney Rydstrom and published by the 110^th Congress on the problems and solutions facing the middle class, homeownership and retirement. “We don’t need more disclosures for disclosure sake. We don’t need new restrictive laws. We need less of both. However, we do need truly intelligent disclosures. Accepting TID™ is a defining moment in the industry. TID™ is a suitability disclosure with a waiver (plus). It protects the banks as well as the borrowers (and investors). Click for more on TID.

Congressional Paper:

Visit: www.bankriskmitigation.com

Problems / Solutions: Congressional Paper:

Visit: www.bankriskmitigation.com

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