FORMS: Kentucky RICO Class Action v MERS, GMAC, DEUTSCH, Nationstar, Aurora, BAC, Citi, US Bank, LSR, DOCX, LPS, and attorneys


“To the judges throughout the Commonwealth and to the homeowners, the foreclosing Plaintiff, a servicing company or “Trust” entity appears to be a bank or lender.    This falsity is due to its name in the style of the case.    They are not banks or lenders to the loan.    They are not a beneficiaries under the loan.    They do not possess a Mortgage in the property.    They will never have a right to posses a mortgage in the property.    It would have been a more honest representation for the foreclosing entity to called itself something like “Billy Bob’s Bill Collectors,”

10.03.10KENTUCKY RICOClassActionComplaint

Salient allegations in very well written complaint, although I still have some doubts about whether they will get the class certified. Kentucky is a non-judicial state”

“Come the Representative Plaintiffs, by counsel, on behalf of themselves and others so situated as putative class members pursuant to Fed. R. Civ. P. 23.    and for their Class Action Complaint against the name Defendants and yet to be named Defendants, make their claim for treble and punitive damages, costs and attorneys fees under 18 U.S.C. 1962 and 1964, otherwise known as the “racketeer Influenced and Corrupt Organizations Act,” hereinafter (“RICO”) and for all violations of law heretofore claimed.

An ongoing criminal investigation has been in place in the state of Florida by both the Florida Attorney General and the Justice Department.    Upon information and belief, a parallel investigation is ongoing in the state of Kentucky and at least three other states.

Defendant Merscorp, Inc., is a foreign corporation created in or about 1998 by conspirators from the largest banks in the United States in order to undermine and eventually eviscerate long-standing principles of real property law, such as the requirement that any person or entity who seeks to foreclose upon a parcel of real property: 1) be in possession of the original note, 2) Have a publicly recorded mortage in the name of the party for whom the underlying debt is actually owed and who is the holder of the original Promissory Note with legally binding assignments, and 3) possess a written assignment giving he, she or it actual rights to the payments due from the borrower pursuant to both the mortgage and note.

MERS is unregistered and unlicensed to conduct mortgage lending or any other type of business in the Commonwealth of Kentucky and has been and continues to knowingly and intentionally illegally and fraudulently record mortgages and conduct business in Kentucky on a large scale and systematic fashion..

LSR Processing LLC, is a document processing company, based in the state of Ohio to generate loan and mortgage documents.    Upon information and belief it is owned by one or more of the partners of LSR law firm.    LSR Processing was created in order to facilitate the conspiratorial acts of the Defendants in relation to the creation of fraudulent Promissory Notes, Note Assignments, Affidavits and Mortgage Assignments LSR Processing has a pattern and practice of drafting missing mortgage and loan documents and in turn, having them executed by their own employees.

This case arises due to the fact that for the Class Plaintiff and the members of this putative class, their Mortgages and in some cases, the foreclosures that followed, were and will be based upon a mortgage and a note in the mortgage that are not held by the same entity or party and are based upon a mortgage that was flawed at the date of origination of the loan because Mortgage Electronic Registration Systems (“MERS”) was named as the beneficiary or nominee of the lender on the mortgage or an assignee and because the naming of MERS as the beneficiary was done for the purpose of deception, fraud, harming the borrower and the theft of revenue from in all one hundred (120) Kentucky Counties through the illegal avoidance of mortgage recording fees. (e.s.)

In the case where a foreclosure has been filed, the entity filing the foreclosure has no pecuniary in the mortgage loan.    The foreclosing entity is a third party.    The entity lacks standing, and most times, the capacity to foreclose.    The entity has no first hand knowledge of the loan, no authority to testify or file affidavits as to the validity of the loan documents or the existence of the loan. The entity has no legal authority to draft mortgage assignments relating to the loan.    The foreclosing entity and its agents regularly commit perjury in relation to their testimony.

The “lender,” on the original Promissory Note was not the lender. The originators of the loan immediately and simultaneously securitized the note.    The beneficial interest in the note was never in the lender.    MERS, acting as the mortgagee or mortgage assignee, was never intended to be the lender nor did it represent the true lender of the funds for the mortgage. The Servicer, like GMAC Mortgage, or some party has or is about to declare the default, is not in privity with the lender.    The true owner or beneficiary of the mortgage loan has not declared a default and usually no longer have an interest in the note. The Servicer is not in privity nor does it have the permission of the beneficial owners of the Note to file suit on their behalf.

The obligations reflected by the note allegedly secured by the MERS mortgage have been satisfied in whole or in part because the investors who furnished the funding for these loans have been paid to the degree that extinguishment of the debts has occurred with the result that there exists no obligations on which to base any foreclosure on the property owned by the Class Plaintiffs. Defendants have and will cloud the title and illegally collect payments and attempt to foreclose upon the property of the Plaintiffs when they do not have lawful rights to foreclose, are not holders in due course of the notes.
42.    Any mortgage loan with a Mortgage recorded in the name of MERS, is at most, an unsecured debt.    The only parties entitled to collect on the unsecured debt would be the holders in due and beneficial owners of the original Promissory Note.
43.    The loan agreements were predatory and the Defendants made false representations to the Class Plaintiffs which induced the Class Plaintiffs to enter into the loans and the Defendants knew the representations were false when they were made.

In these cases, the property could be foreclosed by default, sold and transferred without ANY real party in interest having ever come to Court and with out the name of the “Trust” or the owners of the mortgage loan, ever having been revealed. Many times the Servicer will fraudulently keep the proceeds of the foreclosure sale under the terms of a Pooling and Servicing Agreement as the “Trust” no longer exists or has been paid off.    The Court and the property owner will never know that the property was literally stolen.
52.    After the property is disposed of in foreclosure, the real owners of the mortgage loan are still free to come to Court and lay claim to the mortgage loan for a second time.    These parties who may actually be owed money on the loan are now also the victims of the illegal foreclosure.    The purchaser of the property in foreclosure has a bogus and clouded title, as well as all other unsuspecting buyers down the line.    Title Insurance would be impossible to write on the property.

Although the Plaintiffs attempting to foreclosure refer to themselves as “Trustees” of a “Trust,” the entities are not “Trustees” nor “Trusts” as defined by Kentucky law.    Neither are the entities registered as Business Trusts or Business Trustees as required by Kentucky law. In every case, where one of these MBS have come to a Kentucky Court the entity foreclosing lacked capacity sue to file suit in the State of Kentucky.    There is no “Trust Agreement” in existence.    The entity filing has utilized a Kentucky legal term it has no right to use for the sole purpose of misleading the Court.
55.    Although the “Trust” listed may be registered with the Securities and Exchange Commission (“SEC”) and the Internal Revenue Service (“IRS”) as a Real Estate Mortgage Investment Conduit (“REMIC”), more often than it is not properly registered in any state of the union as a Corporation, Business Trust, or any other type of corporate entity.    Therefore, the REMIC does not legally exist for purposes of capacity for filing a law suit in Kentucky or any other State.

The transfer of mortgage loans into the trust after the “cut off date” (in the example 2006), destroys the trust’s REMIC tax exempt status, and these “Trusts” (and potentially the financial entities who created them) would owe millions of dollars to the IRS and the Kentucky Revenue Cabinet as the income would be taxed at of one hundred percent (100%).
64.    Subsequent to the “cut off date” listed in the prospectus, whereby the mortgage notes and security for these notes had to be identified, and Note and Mortgages transferred,    and    thereafter, the pool is permanently closed to future transfers of mortgage assets.
65.    All Class members have mortgage loans which were recorded in the name of MERS and/or for which were attempted through a Mortgage Assignment to be transferred into a REMIC after that REMIC’s “cut off” and “closing dates.”
66.    In all cases, the lack of acquisition of the Class Members’ mortgage loans violates the prospectus presented to the investors and the IRS REMIC requirements.
67.    If an MBS Trust was audited by the IRS and was found to have violated any of the REMIC requirements, it would lose its REMIC status and all back taxes would be due and owing to the IRS as well as the state of Kentucky.    As previously stated, one hundred percent (100%) of the income will be taxed.

6 Responses

  1. What was the outcome of the Kentucky RICO suit?

  2. THE FOLLOWING ** IS NOT ** FROM THE CLASS ACTION NEIL DISCUSSES ABOVE. This one is ATTACKING the status of the New York Trusts, seeking to INVALIDATE their STANDING purely by the terms of their own Pooling And Service Agreements!


    See also: nakedcapitalism: Multi-Billion-Dollar Class Action Suits Filed Against Lender Processing Services for Illegal Fee Sharing, Document Fabrication; Prommis Solutions Also Targeted


    15. On or about October 22, 2004 Stacy executed a mortgage promissory note with First Franklin Financial Corp.

    16. At all times material to the loan Stacy made payments to either First Franklin Financial Corp. or Home Loan Services, Incorporated.

    17. On or about Apri121, 2008 attorney Laura L. Drake, an employee or agent of the counterclaim defendant Manley Deas prepared a mortgage assignment which states that Assignor is First Franklin Financial Corp., subsidiary of National City Bank of Indiana and the Assignee is Wells Fargo Bank, NA as Trustee for National City Mortgage Loan Trust, 2005-1.

    18. This assignment was recorded of record in Bourbon County, Kentucky at Book 479 and page 78 on May 9, 2008 at 1 :36 p.m.

    19. Manley Deas used this mortgage assignment to support its motion for a default judgment before the Court which was filed on May 21, 2008 and granted on June 3,2008.

    20. After the default was entered, the defendant filed bankruptcy which prevented the sale of his property. Ultimately Home Loan Services moved for relief from Stay in the Bankruptcy Court which was granted.

    21. When Manley Deas sought to continue with foreclosure action the Defendant, through counsel moved pursuant to CR 60.02 to set aside the prior judgment of the Court which was ultimately granted.

    22. T H E D E F E N D A N T A S S E R T S T H A T
    P U R S U A N T T O T H E T R U S T I N S T R U M E N T
    W H I C H G O V E R N S T H E A C T I O N S O F T H E
    T R U S T T H A T T H E M O R T G A G E A S S I G N M E N T

    23. Stacy further asserts that the document was fabricated out of whole cloth by the counterclaim defendants for the purpose of fabricating evidence so that the counterclaim defendants could unlawfully seek to foreclose on Stacy's property.

    24. Stacy alleges that the counterclaim defendants are engaged in a combination, conspiracy or j oint venture to engage in the following acts:

    a. The unauthorized practice of raw,

    b. A systemic fraud upon the Court which includes:

     i. Manufacturing documents out of whole cloth including documents of title, documents of transfer and documents of ownership for the
    purposes of:

    1. committing fraud on the Court and
    2. overcoming the inquiries of Court's regarding issues of
    standing and the right to foreclose;
    3. overcoming the resistance of Stacy, and others similarly
    situated to these counterclaim defendants efforts to illegally
    foreclose on homeowners,

    c. The unauthorized and illegal splitting of legal fees between
    Manley Deas, LPS and LPS Default.

    d. The unjust enrichment of the participants in this scheme.

    e. Unfair and deceptive acts and practices as defined by the law of the Commonwealth.

    28. The counterclaim defendants have taken these actions with full knowledge that they were actively engaged in conduct which was patently illegal and which was a fraud on the Court.

    30. The plaintiff claims that it is properly named in the foreclosure proceeding; however, the securitized trust has a duty to marshal its assets and may only acquire its assets according to the controlling trust agreement.


    32. Stacy has never made a payment to the Trust and prior to the foreclosure action filed by the Trust never had any indication that Trust claimed to be the owner of his indebtedness.

    33. The attempt by this Trust to take Stacy's real property is most analogous to stealing since this Trust cannot provide any legal evidence of ownership of the Stacy promissory note in accordance with the requirements of New York law which governs and controls the actions ofthe Trust and the Trustee acting on behalf of the Trust.

    34. Stacy has previously given notice to the Court and to the Plaintiff pursuant to controlling Kentucky law that an issue of foreign law is controlling ih this case. The law at issue is the law of the State of New York. More specifically, New York statutory and common law dealing with Trusts, Trust assets and Trust Powers. This controlling law requires that for an asset to be Trust Property it must be transferred to the Trust in compliance with the terms ofthe Trust Agreement. This controlling law also provides that any action taken by the Trustee of a New York trust in violation of the Trust agreement is void.

    35. Stacy alleges and asserts that this Trust has never owned his loan and can never own his loan by the tenus of the Trust agreement which controls this Trust's rights, powers and obligations under New York law.

    36. Stacy alleges that the Plaintiff manufactured documents during the foreclosure process to make it appear that the Plaintiff had standing to foreclose when in fact the Plaintiff has no interest whatsoever in his promissory note and mortgage.

    37. Stacy alleges that the foreclosure in the case is wrongful and void as an attempt to acquire property for the trust in violation of the Trust agreement.

  3. …. “Excellence in Foreclosure”

    Isn’t kind of like a “cordial sniper”? 🙁

    This Newsweek sums up the macro-mess better than any I’ve seen, complete with the hard facts of how we go about fixing it.

  4. Our Plaintiffs law firm Reisenfeld and Associates is named in this Class Action(and another one in Ohio) as is our Plaintiff US Bank Trustee…I’m sure there’s no pattern of corrupt behavior going on here though 😉

    Reisenfeld and Associates won the LPS award for “Excellence in Foreclosure” in
    August…They chose what kind of Lawyers they wanted to be…they chose wrong!

  5. and the truth will set you free. I’m having the best day

  6. Question.

    For those people that have lost their home to these fraudsters, once the “banks” steal the house, how are they going to cure the title if more and more title insurance companies refuse to insure foreclosed houses?

    Thank you

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