DEUTSCHE DISCLAIMS ANY ECONOMIC INTEREST IN THE LOANS

COMMENT FROM READER:  I received a printed copy from the Deutsche Bank, in reply to a complaint I filed against Deutsche Bank to Federal Reserve Bank New York. Title of the Page is “ROLE OF THE TRUSTEE IN THE US MORTGAGE MARKET”

Under the TRUSTEE; It says ” Performs a variety of functions, among them acting as TRUSTEE for the Securitization Trust and sometimes CUSTODIAN FOR THE MORTGAGE DOCUMENTS. A corporate trustee for the mortgage backed securities (MBS) only serves an administrative role, but  has no ownership stake nor beneficial interest in the underlying loans of the securitization.

ROLE OF TRUSTEE IN A FORECLOSURE
Deutsche Bank in its capacity as trustee holds certain mortgage loans for MBS transactions. The BENEFICIAL OWNERS of these loans are INVESTORS in MBS, typically large institutions such as pension funds, mutual funds and insurance companies. Although the trustee of MBS is legal owner of record of mortgage loans. THE TRUSTEE DOES NOT ITSELF HAVE AN ECONOMIC INTEREST IN THE LOANS. Moreover the trustee is only NOMINALLY involved in the foreclosure process.

RESPONSE: I thank the reader for bringing this to my attention and would like copies of the documents sent to ngarfield@msn.com. Here the largest (by far) originator of foreclosure process in the country who is now doing so in its own name is, in writing,. disclaiming any interest, ownership or rights to the loans, much the same as MERS.

This is in direct contradiction to actual testimony and proffers by counsel in the courtroom. I’ve been there and I’ve heard it. It’s a lie. The ONLY real parties in interest are the investors and really IS that simple. The only parties that advanced money to fund this scheme are the investors. THEY created a pool of money first that was then replaced with a complex web of collateralized debt obligations, synthetic CDOs etc.

The ONLY other parties that LEGALLY received any benefit of the money in that pool of money were the homeowners who put their house up as collateral — collateral that overstated, just as the value of the mortgage backed securities was over-stated.  Until we all get on the same page about this we can’t fix it. Both the investors and the borrowers were cheated and defrauded through outright lies, deception and hundreds of pages of documents with conflicting provisions. The only provisions in use wer ethose that benfited the itnermediaries to the detriment of both the borrowers and the ivnestors.

The page we need to be on is that there was single transaction between the investor and the borrower. everyone else was an intermediary agent, fiduciary or intervenor unwanted by either the investor or the borrower.

The only people who actually lost money were the real parties in interest — the investor and the borrower. Deutsche Bank and others like it are doing their best to keep the borrowers and investors as far apart as possible just like they did when they did the loan. If the borrowers and investors ever get together and compare notes, they will BOTH file suit against ALL the intermediaries for fraud, breach of contract and breach of fiduciary duties. At that point Deutsche Bank will have no place to hide because they cannot say they are the real party in interest when the real party in interest is standing right there in court.

When we are all on that page, the mortgage mess will unravel along with the death grip that Wall Street has on our economy and millions and homeowners. Investors will recover far more money than they have been offered or paid and borrowers will get to keep their homes with a new mortgage that reflects the realities of the history of their transaction and the true fair market value.

21 Responses

  1. DO NOT EVER GIVE UP!!!!!

    We had an Unlawful Detainer Hearing this morning for which I was fully prepared to defend against Deutsche Bank National Trust Company, as Trustee their capacity to sue, service of process issues, fraudulent documents, etc.

    Get this…

    At the beginning of the hearing…their “Attorney” asked the Judge to DISMISS THEIR OWN EVICTION CASE WITHOUT PREJUDICE…

    AND THE JUDGE GRANTED THEIR OWN MOTION TO DISMISS WITHOUT PREJUDICE…

    When/if they do decide to refile I will be fully prepared to argue their capacity to sue, etc.

    I have them by the balls as they are not even Registered with our Secretary of State to do business; nor are they registered with the Department of Commerce…

    KEEP FIGHTING EVERYONE!!!

    Eventually they will tie themselves in knots that they can’t get out of!!!

  2. Equitable,

    My understanding is that an MBS is not an express trust. It is a statutory trust aka business trust, Massachusetts trust, common law trust.

    Here is the definition of a statutory trust pursuant to Chapter 38 of the Delaware Code:

    (g) “Statutory trust” means an unincorporated association which:

    (1) Is created by a governing instrument under which property is or will be held, managed, administered, controlled, invested, reinvested and/or operated, or business or professional activities for profit are carried on or will be carried on, by a trustee or trustees or as otherwise provided in the governing instrument for the benefit of such person or persons as are or may become beneficial owners or as otherwise provided in the governing instrument, including but not limited to a trust of the type known at common law as a “business trust,” or “Massachusetts trust,” or a trust qualifying as a real estate investment trust under § 856 et seq. of the United States Internal Revenue Code of 1986 [26 U.S.C. § 856 et seq.], as amended, or under any successor provision, or a trust qualifying as a real estate mortgage investment conduit under § 860D of the United States Internal Revenue Code of 1986 [26 U.S.C. § 860D], as amended, or under any successor provision; and

    (2) Files a certificate of trust pursuant to § 3810 of this title.

    Any such association heretofore or hereafter organized shall be a statutory trust and a separate legal entity. The term “statutory trust” shall be deemed to include each trust formed under this chapter prior to September 1, 2002, as a “business trust” (as such term was then defined in this subsection). A statutory trust may be organized to carry on any lawful business or activity, whether or not conducted for profit, and/or for any of the purposes referred to paragraph (g)(1) of this section (including, without limitation, for the purpose of holding or otherwise taking title to property, whether in an active or custodial capacity). Neither use of the designation “business trust” nor a statement in a certificate of trust or governing instrument executed prior to September 1, 2002, to the effect that the trust formed thereby is or will qualify as a Delaware business trust within the meaning of or pursuant to this chapter, shall create a presumption or an inference that the trust so formed is a “business trust” for purposes of Title 11 of the United States Code.

  3. Federal Rule 17 says that a trustee of an express trust can sue in its own name.

    http://www.law.cornell.edu/rules/frcp/Rule17.htm

    Is an MBS trust an express trust?

    I’ve had questions about the RPI issue for a long time and feel I have not found answers. Rule 17 seems to indicate, on the surface at least, the DBNT CAN sue in its own name.

    I’m quite willing to be wrong on this.

  4. Thanks for the information Neil — can I please get a copy of that information for my bankruptcy lawyer the paperwork for foreclosure on my home which states that Deutsche Bank is the trustee for Long Beach Mortgage is not who I make any payments to – it’s Chase & before that it was WaMu — what a mess – but I could really use the copy to help us out — thanks so much –
    peg

  5. J in CO

    Yes. They probably would not like the term “insiders.” However, confident arrangements with third parties were set up prior to default/foreclosure. The relationship/affiliations were – and are – in place.

    This includes bank proprietary trading with hedge funds, in which banks sponsored, invested, and operated the funds for clients. Hedge funds, along with other third parties, purchase large pools of non-performing mortgages and REOs from banking institutions & private equity.

    And, yes, the government promotes distressed debt buying. – they are friends of it. There is nothing generally illegal about it – however, the law is often violated in the process – and such violations are rarely investigated by government. Also, all is done in secrecy.

  6. ANONYMOUS,

    I wonder if the private parties are insiders from the bank contracting for the servers? I think many of the privates are actually parties to the deals in some way such as David Stern a default contractor for LPS that has established offshore entities involved in unknown things like maybe holding entire REO portfolios they buy before or after the fraudulent foreclosures.

    FDLG I believe were the same with companies set up in china.

    Then you have guys like Soros and Paulson creating new private entities to pick up the pieces after the failure of the banks. I would say that a hefty majority are insiders with power and influence as to what and how things are liquidated. It is always a friend of the bank.

  7. J in CO,

    Agree as to Trustee and POA – and possession – good point.

    As to servicer – also agree servicers are the banks. They are a subsidiary. But, many do not know that servicers continue to service charged-off bank loans that have been sold to third parties by the parent bank. This is by special agreement and contract – and you would never know this.

  8. ANONYMOUS,

    I agree the PSA specifically gives the Trustee the power to grant a POA yet with blank endorsements and lack of transfer of possession as proven in my case the Trustee never owned the loan and thus could not have granted the POA to begin with.

    As for LPS, they are actually tied more to the servicers which are banks and as such are the actual compelling party regardless of who owns or holds the write offs. I believe that LPS and or the subsidiaries like David Stern et al are establishing a way to acquire the write offs themselves and are holding them in offshore entities and being hired round aboutly by the servicer.

    The mills are heavily invested in this game, many more than others but very much part of the RICO enterprise.

    Great info, thanks for sharing!

  9. dny

    The Fed Opinion, relates to securities derived from the Trust. The certificate tranche holders to the Trust – are the investor creditors. Tranche holders and MBS security investors are not the same thing. The tranche holders (all certificates are sold to security underwriters) pass through receivables via securities derived from the trust. These security investors only report a beneficial “income” from whatever derived security they own. – and that income is only a fractional share in a “pool” of receivables.

    This is in contract to tranche holders who own a proportional interest in the Trust itself (and your loans) – but pass-on their income to derived security investors. The Trust (and it’s tranche holders) do not pass through legal title to the loan by the cash payment pass-through of its derived securities.

    All the Fed says is that pass-through recipients are not a “covered person/creditor”. Thus, they do not have to disclose themselves to you. Who is required to disclose itself as the creditor – is the tranche certificate holder with the largest proportional legal title interest in your loan. Whether or not a true sale even occurred by the Trust set-up (and thus, legal title conveyed) – is a whole other issue.

    Think of it this way – you cannot have a creditor that is constantly changing – MBS – from which many other instruments are derived such as CDOs and CDO squared – if viable and vendible, are sold to another party all the time. None of these parties hold legal title to your home – and cannot discharge your mortgage, refinance, or modify the loan. If these security investors do not get paid – their claim is against the security underwriter – not the home owner. And, that is what the security investor lawsuits reflect.

    Foreclosure attorneys state that the Trustee is acting on behalf of the Certificate Holders to some Trust. Those certificate holders are finite and limited in number as to the tranches – and not the many times over multiple derivative investors. This is what the Federal Reserve Opinion intends to convey. And, the Congressional Intent of the TILA Amendment (which the Fed interprets) was to allow borrowers to know the identify of their creditor – so that they could directly negotiate with their creditor. By wrongly and fraudulently foreclosing – your right to know your creditor is denied.

    Foreclosures are processed with a “faceless” and unnamed creditor – “certificate holders”. But, we know the certificate holders – at least from the onset – since the certificates are sold to the security underwriter. It is up to the security underwriter to disclose which tranches they retained – and which tranches may have sold to another party. And, to disclose which tranches have been closed or written off – or if your whole loan has been sold to another party.- and at what price. From there, we can determine who has the largest proportional interest – your creditor – and negotiate directly with them. The way it is now – you do not even know the real party in the action.

    While there was much fraud in loan securitization – it will be difficult to get a free house. If we can demonstrate to courts that we are not looking for a free house – we want to cooperate by reasonable and meaningful negotiation with the correct party -and to be made whole, perhaps, the courts would be more cooperative. If more fraud is discovered in this process – so be it.

    In effect, by conveying that the foreclosure was fraudulently procured by a lack of standing – many more doors could open including discovery of false documents, inflated appraisals, and forgeries. In the meantime, once we know the creditor – we could do what has been denied to us – negotiate. First in line – a meaningful principal reduction.

    J in CO,

    What you are saying is also very important. Believe this is a big source of fraud in foreclosures.

    Disagree with only 2 things. One, do not believe LPS and other entities like them are always working for the banks – it could be any party who has hired them – including parties that purchase bank write-offs. Two, most PSAs state the trustee has ability to grant POA to the servicer. Of course, the Trust must still be viable.

  10. love these comments and will make those discovery requests. My case which boa is trying to remove to federal court got assigned instaneously to a settlement judge–i don’t thiink that is bad for me as I have settled countless lawsuits before this judge and he knows me well. The lats time we were together settlement went to 1 am in the morning on a case and he did not think it would ever get done adn it did!

  11. I would also like to see a copy of the Deutsche Bank response to the complaint in it’s entirety if possible. I have quiet a few clients who are losing their homes based on Deutsche Bank misrepresenting themselves as the owner of the notes.

  12. Lisa D,

    You are on track. Here is the real game though and I have documents to prove it.
    Lender Processing Services which is under investigation by the US Attorney in FL right now is the conduit to ordering the foreclosures.

    They have a computer system that emails the order to the numerous default management contractors(mill attorneys) in a sense engaging the attorney for the bank without the bank being involved.

    Technically they spell out the fraud on the court as it needs to be perpetrated by telling the attorney who to list as plaintiff be it the trustee, servicer, some other unknown etc.

    LPS is actually the party that engages the attorney and they receive an undisclosed kickback fee they try to call an admin fee. The bank has no contact other than through the computer network. One of the listed services LPS touts they provide is “drafting of missing documents” in the service agreement.

    The mill attorneys testify with hearsay evidence for the lender or trustee and the info passed through is input without first hand personal knowledge as proven by numerous depositions being done and shared by attorneys in Florida. No one knows anything and the trustee is usually unaware anything is taking place.

    The trustee is usually without power since the transfers to the trust never happened so they have no ownership. They also have no power to grant the power of attorney to have the servicer act for them. THe servicer has no economic damage, the trust may or may not, and all the while the attorneys violate their professional code of conduct by bringing frivolous suits and giving kickbacks to non attorneys.

    It is complete federal racketeering and none of it should be happening.

  13. Neil Sir,

    Please check your email. documents are there. thanks for all this.

    Thanks and Be Safe

  14. ANONYMOUS, one more thing: How does one “become the owner of an existing mortgage loan by acquiring legal title to the debt obligation?” By simply becoming the “holder” of a note endorsed in blank? If so, seems to be Federal Reserve sanctioning one hell of a game of musical chairs, with tax consequences on all the players in foreclosure “recovery,” including “lender” legal counsel.

  15. But ANONYMOUS, if these were really only “financings” by the underwriter (or whatever we want to call this entity), instead of “true sales,” wouldn’t the tax exempt pass-thru status granted by REMIC vaporize?

    The Federal Reserve opinion flies in the face of REMIC and IRS rules, doesn’t it? Or have all the intermediaries really been accounting for and paying taxes on the income flows from the iunderlying mortgage loans?

    Can DB be both at the same time – compliant with REMIC AND Federal Reserve rule on “creditor?”

  16. Could you please provide a copy of the complaint you filed as we to are dealing with Deutsche Bank.

  17. Important that Deutsche is admitting this. Still, who is the creditor – who accounts for recovery on foreclosure? Deutsche only explains for transfer of current loan payments. Quote from above:

    “The BENEFICIAL OWNERS of these loans are INVESTORS in MBS, typically large institutions such as pension funds, mutual funds and insurance companies.”

    But the Federal Reserve states these beneficial owners are NOT the creditor. Quote from Federal Reserve (covered person is creditor):

    To become a “covered person” subject to Sec. 226.39, a person must become the owner of an existing mortgage loan by acquiring legal title to the debt obligation. Consequently, Sec. 226.39 does not apply to persons who acquire only a beneficial interest in the loan or a security interest in the loan, such as when the owner of the debt
    obligation uses the loan as security to obtain financing and the party providing the financing obtains only a security interest in the loan. Section 226.39 also does not apply to a party that assumes the credit risk without acquiring legal title to the loans. Accordingly, an investor who purchases an interest in a pool of loans (such as mortgage-backed securities, pass-through certificates, participation
    interests, or real estate mortgage investment conduits) but does not directly acquire legal title in the underlying mortgage loan, is not covered by Sec. 226.39.”

  18. J in CO,
    Good thoughts … wouldn’t it make sense to force the Court to compel the Plaintiff’s attorney to disclosed exactly who is signing their “paycheck”? Where are the checks coming from … most likely the servicer-RIGHT?
    If you could show that the servicer is paying the attorney to bring suit on behalf of the “Trust/Trustee” wouldn’t that constitute a claim of Champerty and Maintenance?

  19. Deutsche is backing off and disclaiming any role because all trustees allow the servicer to bring forth the fraudulent foreclosures in their name without disclosure. Deutsche has a duty to the investors to make sure the servicer is not stealing the money or the house but allow an interested party to do the unlawful bidding.

    The servicer controls everything and strips all the money they can at the detriment of the investors and the homeowner, money that could have gone to some effective solution.

    This is one major reason that the servicer and trustee cannot be represented by the same attorney as the conflict is rather daunting.

    If the trustee never had an interest how can they bring suit without a joinder of the real parties?

    Every day more layers are exposed. Keep it coming!

  20. can we get a cite to this case? seems to me if we canget the courts to require the naming of all the investors in a trust, we are more likely t be able to get to the issue of whether the trust has any value at all and therefore whether the debtors note has any value. I have a case in Kansas City that I am pursuing and lo and behond BOA and its servicing company had MERS enter a appearance who was named but not yet served. The lawyer for BOA claimed that the banks were directing MERS to enter an appearance. When they out of the blue sought this week to remove to federal court claiming that the demand letter for the first time established diversity of jurisdiction by claiming money in excess of $75,000 was asked for, tsuddenly the trust MLMI entered an appearance. Of course last week the lawyers for BOA, the servicer , MERS claimed they could not find MLMI2006-HE5 or the trustee. Tht entity has not filed a 10k since 2007 and its trustee in Oregon no longer exists nor does the registered agent listed for it–but now lo and behond a lawyer (Bryan Cave of St. Louis, KC and Phoenix) is entering an appearance. I have a TRO set in the circuit court on Tuesday to keep foreclosure at bay. (The defendants lawyers gave me two letters saying they would not foreclose and they put a hold on the foreclose and then I got a letter directly from BAC saying they were going forward. I set the matter for a formal TRO and now they are not happy–what are they possibly going to say to the court after there are two letters in hand from them saying they are not going forward–I think they are just yanking my chain). At any rate, I have given then a ton of discovery to discover the value of the trust if any but I think they are going to lie. I really don’t think the trust exists but BOA is trying to make a picture of it existing to the court. So if I can get some authority that the trustee does not have any authority and I can get closer to the invetors themselves, I think I ca show there is no value in the trust. I already have the breach in the chain of title with MERS and false notarials but I want to show they have been collecting on a note alraedy paid.

    On another note, i read this blog two or three times a day and it is fabulous. As a former trial lawyer for 30 plus years in civil rights, this is wonderful. Saves so much time in legal research. Thank each and every one of you for your comments

  21. WOW!! That is the “smoking gun” for so many of us dealing with these Deutsche Bank scumbags!!

    Please post this for everyone to see!!

    Maybe this will be just what my State AG needs to actually DO something about this FRAUD!! I filed a formal complaint (with 157 pages of “evidence” to support my claim) and all the mailroom flunkie could tell me is they have “limited authority” to do anything!! WTH?!?!?

    Well I am going to continue to be pimple on the ass that will not go away until I get some answers!!

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