Deutsch: Trustee in name only

TOO BIG TO GO TO JAIL?!?
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Editor’s Comment: Echoing the analyses presented here over the last few weeks, our senior securitization analyst wrote me this note which corroborates the basic assumption that everything is upside down. In the recorded words of Reynaldo Reyes at Deutsch — “it is all very counter-intuitive.” It is also wrong, illegal and probably criminal.
That is a euphemistic way of referring to a shell game that is covering up the largest Ponzi scheme in human history — and one which is still on-going because regulators and law enforcement either refuse to see it or simply don’t have the resources to study it.
We are left with the appearance of a REMIC — the equivalent of what I once called a holographic image of an empty paper bag. We have a paper trust that is both unfunded and in which there are no assets, that was routinely ignored by the investment bankers who directed them to be written but not used. We have beneficiaries who think they are holding asset-backed mortgage bonds when there are no assets to back up the bonds because the bonds were issued by the empty trust. Investors are paid out of their own money and the sale of new “mortgage bonds.” Classic PONZI.
Then as Dan so simply explains it, you have a paper “trustee” over the paper trust, where the paper trustee has been stripped of all powers — powers that are 100% delegated (back to the banks acting as servicers) in the documents written for the trust, unless the investors say otherwise, but there is no way for investors to identify other investors in the paper trust in order to compare notes and give instructions to the trustee.
Same as the homeowner who has kept asking “which trust owns my loan.” The answer is that none of them do. The banks don’t own the loan either. It is the investors who own the loan receivable, but the loan receivable is neither documented nor secured.
Everything else is just paper and ink that didn’t matter to the investment banks who were creating servicing entities and other exotic vehicles through which they could “trade” loans that didn’t belong to them, receive insurance on losses they didn’t have, get federal bailouts on lies about mortgage defaults when it was only the threat of NOT receiving an undeserved windfall that the banks were worried about — 100 cents on the dollar for loans and fictitious pools for each insurance or CDS contract they purchased — using the investors money.
As Dan points out, the entire scam comes back to one thing, as it always does in an illegal fraudulent scheme — control was by the banks who should have only served as intermediaries both on paper and in action. They did neither. They posed as the investor when it suited them and even changed MERS records to show that, as if it were true. They posed as owners of an obligation from homeowners when they neither funded nor purchased the loans.
AND they convinced Judges that millions of foreclosures should be allowed where the bank acting for itself and on behalf of the paper trust, submitted a credit bid from entities that never had any money or assets, much less ownership of the loan receivable.
The plain simple truth is that if you compare what should have been done if this was honest dealing, is that the money invested would have gone into the pool (REMIC, SPV, Trust) and the used to fund mortgages. Instead the money went elsewhere and no loans were assigned into the pool, the mortgage bonds were worthless, and the complexity of the fraud has so far been too daunting for law enforcement and regulators to step in.
If this was a legal transaction in which the  intent of the investment banks was honest, the instructions to the closing agent and the documents and disclosures would have the name of the pool all over them. Instead they put in the names of entities who were neither acting as brokers nor lenders. And the purpose of the banks was to “borrow” the funds from one end and “borrow” the fraudulent documents on the other end and trade for their own benefit. Obama’s advisers are just plain wrong when they tell him that the transactions were bad or wrong, but legal under existing laws and regulations.
I still believe that law enforcement and regulators are both stepping in and getting their ducks in a row. Unraveling something this complex on paper, requires a solid foundation of knowledge in which they can ignore the paperwork just like the banks did. After that it becomes clear that this is just another Ponzi scheme based upon tens of millions of fraudulent documents were produced supporting tens of millions of transactions that were never completed in which tens of millions of recorded documents lie ticking like a time bomb in the county recorders’ offices, only to surface later as a blight on a corrupted title system.
From Dan:
Here is how out of control the situation is. The Trustee (Deutsche in this case) has serious concerns over the servicing and foreclosure activity of the servicers.  Deutsche has (by contract) given control to the servicers.  Deutsche has no ability to interfere with what the servicers are doing (unless instructed by the investors). [Editor’s Note: But they knew this going in meaning they were accepting “trustee” fees without acting as trustees, which is why these paper trusts were never administered from the trust department of ANY of the banks alleging they are trustees for the on-existent trusts. An unfunded trust is no trust at all. It is fictitious.]
On the other side, Deutsche is constrained and cannot exercise control over the servicers unless and until a certain percentage of the investors give written authorization and agree to indemnify Deutsche. [Editor’s Note: That percentage can only be reached when the investors know who the other investors are. So far the banks have succeeded in keeping most of the information secret — as both investors and homeowners unravel the mystery of vanishing documents and money in flight]
The scenario created by Wall Street is a sinking ship that does not allow the officers of the ship (Deutsche), to interfere with workers repairing a hole in the bottom of the ship, unless the ship owners (the investors) get together and give them (the officers) written authorization to remediate the actions of the workers.
This ship is going down and there is no stopping it. [Editor’s Note: When those “assets” on the balance sheets of the mega banks turn out to be at best worthless and at worst fraudulent, the bank’s financial condition will be changed from viable to impossible and they will be broken up. But as Iceland showed us clearly, the other banks pick up the pieces, the household debt is reduced forcing the banks to cooperate, and as much money as possible is returned to the investors who were the first victims in this fraudulent PONZI scheme]
This type of contractual relationship is against public policy and should be unenforceable.
Once again, the principal is not exercising any control over the agent (investors and trustee).
Once again, the principal is not exercising any control over the agent (trustee and servicers).
Once again, the principal is not exercising any control over the agent (foreclosure trustee and beneficiary).  In fact the foreclosure trustee does not even know who the beneficiary is.
Thx,
Office: 530.392.4681

30 Responses

  1. @john gault

    I’d rather not re-post my email…are you saying the email I have for you is no longer working?

  2. I think I get what carie means…if the financial transactions weren’t legal, and can’t be verified, they never happened, therefore, the defaults never happened. That is precisely my point with no cause of action, color of title, civil rico…..because there is no legal assignment, no legal transfer of the debt….the financial transaction never occurred. It is also a good countercomplaint for Consumer Fraud and Deceptive Practices…you can ask the court for actual and punitive damages an other relief as just. I suggest full satisfaction of the mortgage and notes plus 3x the value of the notes.

  3. 6 day depo, eh? I’d kill for a copy of that depo!

  4. carie – please give me your email. i’ll explain later, okay? I wouldn’t ask here, but i think you’ve posted it before.

  5. Too big to jail, but not to big to nail with lawsuits for all of the irreperable harm they ALL caused the American people. We need to sue ALL of these scumbags, We need referendume on the 2012 ballot to restore the U.S. CONSTITUTION ….ISSUE U.S. BANK NOTES VIA STATE BANKS…ABOLISH THE FED…PRIVATIZE OUR WEALTH. We should only lend directly to ourselves…NO FED MIDDLEMAN…ABOLISH OBAMACARE ..

  6. Running errands today I saw a COM ED truck that said MOM ED instead of COM ED with a MARIST H.S. (CATHOLIC H.S.) STICKER ON IT…LOL…! If you get it…that was right on the money..! CPS striking teachers holding up signs such as PAY YOUR TEACHERS RAHM..NOT YOUR CRONIES..! Local media remarking that appointed school board heads are going to be rolling over this because Rahms getting blamed. Well he should.

  7. BTW…there are acts prohibited by notaries public….look up your States notary laws.

  8. johngault….RE…..Chicago Title & Trust was the escrowee and the trustee from the origination in 1992 until…..they released the mortgage to PUBLIC on the day I refied…in 2007…it is on record…however…the escrowee claims she was a the notary at the closing. You can’t by law be a witness to a loan transaction and a party to the transaction. That is a criminal act. The loan officer told us recently she was_ not_at the closing….though we closed at Chicago Title & Trust….not the bank…. I asked the recorders office who public is…? the clerk said it could be anyone…There was no assignment recorded after the refi…so Chicago Title dumped the toxic waste to public to hide the fact they never carried out the ORIGINAL transaction in 1992… The bank attorney already told me there is no trust, trustee or documents…there is no discovery…! He told me call for a loan mod..yeah right…! He said they don’t have to record an assignment……Well, yes they do if they lent me $$ and they want to secure their lien. They were simply debt collectors who collected payments on an insolvent debt that should have never been refied…but I couldn’t have known what they did in my name. I hope that makes sense.

  9. I agree johngault…I believe these judges are ASSUMING ALOT …without any verification. They are NOT following the rule of law by assuming too much. I will try and repost that link..
    http://www.blm.gov/nils/AQ_handbook/h-2100-1/chapter-VII/chapVII-illus-18.htm

  10. @johngault

    Did u see my other post? I would like to give you the info you requested re. proof Fannie/Freddie false default sent to your email address…did you see my email I sent to you?

  11. @Elaine

    What I object to is the fact that Neil says the “investors” were the “first victims”…that is false. The homeowners were—they thought they were getting a real mortgage/note attached to a home—but instead they got snookered into a jump-start of (false) default collection rights ONLY. THAT IS ILLEGAL…and it happened way before the securities investors got involved.
    This giant government/wall street/banks ponzi crashed the economy and has left many, many people homeless, jobless, hopeless, and in dire straits.
    I feel that Neil is only trying to spin what happened in order to help the investors—not the homeowners…and I think that’s wrong.

  12. ivent – so you are saying that first american title, say, was the trustee named in the dot and FAT also presented the docs at closing, an employee of FAT witnessed and notarized the borrower’s autograph, and this is prohibitted under something I don’t know about. Is this what you’re saying, among other things?

  13. Some of these comments are confusing, even if unintentionally.
    The dot trustee is one thing, the secn trustee is another. The dot trustees have undoubtedly breached their obligations to the other two parties, certainly the trustor-borrower. I have been hollering about this since 2008. Someone who occasionally comments here was the first one to recognize the cause of action for that breach and try to do something about it. I don’t know what came of it. Because I have written about it and it’s available at a couple places on line, I’m not going to re-recite it here, now. (It’s at scribd and sourceoftitle). The trustee of the sec’n trust is another hornet’s nest of its own and I’m no authority on his relationship with the investors whose interests he allegedly holds in trust. But it looked to me from a couple glances that he has no actual authority (and from what I saw, he made no guarantees regarding the loans nor did he accept an obligation to even look at them), outside maybe what you expressed, Any actual authority appears to have been given to the servicers, at last that’s how they act, but actually maybe not since they act in the name of the sec’n trustee, just like they have always done this or that in the guise / name of MERS. What authority they have itself depends first of all on who has the right of recourse against the borrower, and I’m not convinced that’s the investors. But maybe it is. This I do know: courts are wrongfully assuming the authority of anyone on the other end of these deals.
    Courts might be making what they think is a reasonable assumption that a secn trustee has a right to act within a recourse-right against a homeowner(‘s property) and that assumes a lot of things not ever in evidence, like the loan making to a particular trust by a cut off date or ever, really. Even if a secn trustee is the alleged holder of a bearer note and screams article 3, where is evidence of the secn trustee’s authority to act? It’s being presumed and imo, it shouldn’t be.
    These things, these rights, duties, authorities being assumed by courts probably don’t rise to lawful presumptions and they are most assuredly not facts in evidence. The courts must look imo to documentation which passes the statue of frauds for anyone’s (sec’n trustee) authority to act for another (investor) when it comes to real property. So what I’m trying to say as to secn trusts, there are a lot of missing facts: what is the source of the secn trustee’s authority to act in this manner (enforce note and dot) beyond what I’d called unwarranted presumptions by courts? And what courts really need, as one judge (wilhelm, think it was), so astutely pointed out is that what he needs are facts. For all we really know, or at least some of us, is that these notes and dots in trusts are merely cdo’s, with the investors’ right of recourse for non-payment being solely against the seller of the deriviatives, not the homeowner, which means a secn trustee trying to move against a homeowner is without question beyond the scope of his (ostensible only) authority. I’m of a mind the investors didn’t get the right of recourse againt the homeowner they thought they were buying. But not pretending the investors have the 1) authority to f/c 2) by way of the secn trustees would out that fact, if it’s a fact. But I have to acknowledge that my theory that the investor has recourse for nonpayment only againt someone other than the homeowner is also not a fact in evidence. What the courts need are facts. What they’re getting, obviously, is singularly reliance on (alleged) possession of a bearer note with no regard whatsover of why one might be in possession (if they are) of such a note and as a group, we don’t appear (not counting NG if he’s got it) to have fashioned arguments which make a court understand that what it needs are facts beyond mere possession of an note. Because right now, courts are at it doesn’t matter, I’d say. One last thing, if I may, if someone’s non-payment from Party X (in my theory) leads to a right of recourse against the homeowner by the investors (just like source-funding is supposed to ultimately give the source-funder the right of subrogation / stand in the shoes of) is possession of the note enough? It might well be if these weren’t notes secured by real property. Then one gets into the assignments of the dots and trust law cut-off dates, who must, who may, assign.
    I didn’t mean to go down such a long road. I just think both the rights of investors and others to act on their behalf are being
    unjustly presumed by courts and that bad presumptions are wrongfully standing in the stead of evidence of those rights.

  14. I goofed up that link..will repost later…gotta run.

  15. johngault …..this is how they scammed us..
    http://www.blm.gov/nils/AQ_handbook/h-2100-1/chapter-VII/chap-VII-illus-18.htm

  16. What I mean by the twist is the banks are twisting things by misrepresenting themselves as the trustees. They can’t be possible because that would be a conflict of interest. The paralegals weren’t sent out with the loan files to the trustees..the title companies…in my case the trustee claimed to be present at the closing as the notary… but was not. That is criminal to be party to the financial transaction and witness the signing. This is a huge scandal.

  17. Ivent – re: ” the twist” – don’t get your line of thinking here. If the financial transactions (i.e., closings with consumers) never happened, then there was no loan to pay back to (theoretically) the treasury. So you can’t really mean that. I understand that you’re saying, in your own way, that loans funded by the treasury (or actually any overnight source) can’t be securitized because of the outstanding obligation to the fund-source, which undoubtedly makes sense, and because I don’t know that for a fact, I’ll take your word that they can’t be. Is your single reliance for asserting the fact the fund-source wasn’t retired the movie and if so, what was its source? And as I said to you on the old post a couple minute ago, isn’t the treasury as overnight funding at
    odds with NG’s premises, in that he believes the investors’ funds were used as the funds-source for these loans? Btw, I’d like your email if you’d care to give it to me.

  18. I believe it is the title companies who are the real culprits here. They breached their fiduciary duties.

  19. Thank You Elaine! There are those who just dont get it. I am the Investor, the Taxpayer and the Homeowner. If you look into your past and see you DIDNT save and invest in your retirement for 30+years then …. YOU JUST WOULDNT UNDERSTAND BECAUSE YOU HAVE NOTHING TO LOSE! Neil, Myself and many others Understand that! Accept the Truth and Move Forward with us or Move On to another site and find somene else to attack! Try the real Criminal not Neil and the Investors! Sheesh!

  20. RE: THE INVESTORS…They are lucky they had CDS insurance….if they are still not happy, they should be sueing their broker/dealers for selling them junk…and the TRUSTEES FOR FRAUD. Not going after th property of the AMERICAN PEOPLE. The little guy investors should be suing the pension fund managers for investment fraud.

  21. Kudos Pamela!

  22. Ivent Iam so glad to see you are still around.Have missed your posts and info.I’m glad I found you here.Please do not go missing again,it is not the same without you.

  23. @Carie – How do contend that returning money to the investors is not fair? Put yourself in the investor’s shoes. You hand over money that is to be invested, but that money does not get invested. They’ve been defrauded and lied to as well. The banks are no better than Bernie Madoff who is doing jail time for the same thing. The banks made bad “loans” that were designed to fail and then insured them. Remember AIG? That’s the reason AIG had to be bailed out (with our tax money) – the banks all rushed to cash in their insurance policies on all those “loans” that went bad. Did they refund the investors? No of course not! They told the investors that’s the way the ball bounces and pocketed the money AIG payed out. It’s the exact same thing as insuring a ship that you know is leaky (a fact that you’ve managed to conceal) insuring every ounce of cargo in her hold, insuring the captain and crew before sending her on a transatlantic crossing with no lifeboats. That what unmitigated greed looks like.

  24. This is something that has confused me. In response to a QWR I sent attorneys for Aurora stated that “Deutshe bank…” is the “owner” of the note in trust ABC…My PSA states Deutsche is the “owner” on behalf of the investors. So right there seems to be lie #1. (Also, as Carrie has said Deutsche has claimed they don’t own any of the loans they serve as trustee for?)

    When the assignment of mortgage was recorded a substitution of trustee followed. The trustee identified on the substitution was the title company listed on the DOT (not Deutsche).

    Does the substitution of Trustee need to go through MERs? I’m asking because we all know that the assignment does. (even though we know it’s a lie). However, after it’s assigned does the SOT get run through the MERs database. Here is how my SOT reads “…as the Successor Trustee under the DOT executed by hman, as trustor, in which MERS as nominee for lender is named as Beneficiary & Lawyers title as trustee, recorded on….Instrument # 12345…”

    It seems like on 1 hand they are claiming the original trustee was still the title company while on the other claiming Deutsche was the “owner”. However, the PSA designates them as the securitization trustee. If anyone can enlighten me that would be great. Maybe they are trying to confuse me.

  25. I have A TAPED conversation with Ronaldo Reyes from Deutsch telling me Ocwen is my bank …I now know they are just the servicer

  26. WE THE PEOPLE want to know…where is the bailout money of the TBTF going…? We want a FULL ACCOUNTING OF THE LOAN FILE….BECAUSE IT IS DEFINITELY NOT GOING BACK IN THE U.S. ECONOMY…

    CNBC and BLOOMBERG NEWS reporting today the U.S. TREASURY IS DUMPING TREASURIES THEY INVESTED IN AIG and SELLING THEM TO PRIVATE INVESTORS…

    The TREASURY is obviously who is getting paid back the taxpayers money and investing it in TBTF companies.

    They are gambling the U.S. into insolvency.

    TIME TO PRIVATIZE OUR WEALTH.

  27. That’s the TWIST…BECAUSE…THE FINANCIAL TRANSACTIONS IN OUR NAMES NEVER OCCURRED…HOWEVER……THE TRUSTS NEVER EXISTED…IT IS QUITE DECEPTIVE…AND CRIMINAL.

  28. THE BANKS. BY LAW COULD NEVER BE THE TRUSTEES….. BECAUSE THE BANKS WERE PART OF THE FINANCIAL TRANSACTIONS THAT NEVER OCCURRED……THE TITLE COMPANIES WERE THE TRUSTEES…

  29. The movie INSIDE JOB told the tale well. The investors were insured on their risks with CDS insurance. The loans never made it to the trusts because the banks never paid back the ORIGINAL LOAN before CAPITALIZING on EVERY ASPECT OF THEM…That is why NONE of the FINANCIAL TRANSACTIONS _EVER_ OCCURRED…They committed SECURITIES FRAUD and FRAUD IN THE SALE OF SECURITIES…They ALL BENEFITED FROM FRAUD.
    THE SERVICERS ARE NOT THE TRUSTEES FOR THE TRUSTS….
    THE TITLE COMPANIES ARE THE TRUSTEES..
    HOWEVER, THEY BREACHED THEIR FIDUCIARY DUTIES….THAT IS CRIMINAL…THEY WERE INDEMNIFIED…..PAID TO CARRY OUT THEIR FIDUCIARY DUTIES…
    THE TITLE COMPANIES ARE HIDING BEHIND THE SERVICERS..
    THE PSA IS THE TRUST CONTROLLING DOCUMENT THAT GOVERNS THE SECURITIES….AND TRUSTEES..IS A NULLITY WITH NO ABI……
    The PROSPECTUS is the TRUST CONTROLLING DOCUMENT THAT GOVERNS THE SERVICERS and THE SERVICING OF SECURITIES…..IT IS A NULLITY WITH NO ABI…
    THE SERVICERS DUTIES ARE LIMITED TO SERVICING THE LOANS..
    THE TRUSTEES ARE DIRECTED BY THE BENEFICIARIES OF THE TRUST AND HAVE TO HAVE AT LEAST 25% CONTROLLING INTEREST IN THE TRUST…THEY CAN’T BECAUSE THERE IS NO ABI…..
    THEY HAVE NO LEGAL AUTHORITY ….BECAUSE THEY HAVE NO ABI….THEREFORE THEY HAVE NO CONTROL….ALL SALES OF THE SECURITIES WERE FRAUDULENT SALES WITHOUT THE ABI..

  30. And here you have Neil’s TRUE motivation for this website:

    “…and as much money as possible is returned to the investors who were the first victims in this fraudulent PONZI scheme…”

    Not the homeowner’s, but the investors.

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