Deutsch Mystery Settlement Gives Clues to What Really Happened

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This is not legal advice on your case. Consult a lawyer who is licensed in the jurisdiction in which the transaction and /or property is located.

Scores of investor lawsuits have been settled under seal of confidentiality. The net result is that the investors get paid, the big banks pay the tab, and nobody knows how or who is accountable for the money received. Consider this: If you are in court and the allegation by the “forecloser” is that US Bank is the foreclosing party as trustee for a trust, you might be making assumptions that are not appropriate:
  1. Did the Trust ever exist in actuality or was it just a figment of imagination created on paper? This is the key question rather than the next question because all the evidence suggests that investor money never made it into the paper trust and thus there could never have been acquisition of loans by the trust because it had no money to do so.
  2. Did the Trust ever operate as a going concern (within the 90 day limitation imposed by the IRC REMIC provisions).
  3. Does the Trust still exist?
  4. What payments did the beneficiaries receive. All evidence points to them receiving “servicer advances” (which are neither advances nor from the servicer) PLUS receiving the settlement money from the investment bank that sold them the bogus, empty mortgage bonds.
  5. What is the balance due to the investors a/k/a beneficiaries of the trust?
  6. How is that balance allocated to amounts due from borrowers?
  7. Do the borrowers actually owe any money to the Trust?
  8. Do the borrowers actually owe money to the trust “investors.”
  9. If the Trust either never existed in the real world or has ceased to exist or the trust investors/beneficiaries have been paid all or part of the money owed to them from both borrowers and from third parties (i.e., servicers and investment banks), was there a ?transfer” of the debt, the note and the mortgage to the investment bank that settled with investors, why is US Bank, “trustee” still showing up as the foreclosing party?
  10. If the actual owner of some debt is not any of the parties appearing in court, then how can modifications actually be properly processed?

Here are some interesting quotes from the article from housing wire.

No details about the settlement were disclosed in the motion, with the motions only stating that the two were settling.

In its initial complaint, MassMutual alleged that Deutsche Bank’s representations were what convinced the insurance giant to buy $125 million worth of securities. The bank, the argued in their filing, was the “exclusive source of information” regarding the loans that backed the securities.

The company later discovered that Deutsche Bank allegedly disregarded their own underwriting standards, and had purchased loans issued to borrowers regardless of the ability to repay. (e.s.)

Deutsche Bank argued that both the allegations were untrue, and that MassMutual should have known that there was something wrong with the securitizations. (e.s.) {Editor’s Note: The importance of this cannot be over-stated. It is last part of the Four Dog Defense. Deutsch is saying “OK, the mortgage backed securities were fake, they did hurt you, but it was your fault for not knowing we were cheating you.”}

My main concern though is how this money is allocated from hundreds of billions of dollars of settlements to the illusory loan portfolios allegedly owned by specific trusts. If the investors are the only ones that could be considered “creditors” or something equivalent to a creditor or claimant, then basic double entry bookkeeping says there must be a corresponding reduction of what is owed TO THOSE CREDITORS OR CLAIMANTS. And THAT means that the notice of default, notice of right to reinstate, notice of acceleration and notice of sale or foreclosure lawsuit are all wrong. It also probably eliminates the mortgage as a viable instrument without rescission or attacking the initial transaction under a claim of nullification.

26 Responses

  1. For those who missed it David left a treat for you last night.
    Minnesota Supreme…Nothing equals Nothing. little stinker.

  2. If you have not visited my friends over at Clouded Titles website in awhile…you should visit again…..many things going on there.

  3. Excellent TU!
    The remedy is out of court….
    But that does not stop them from trying to invoke the jurisdiction of the court.

    The lien is NOT attached to the Land.

    Ian….the sellers kept the fees as assets on their books as they retained the servicing rights.

    And when they lie…I nail them!
    They drop like flies…those trustee firms do.
    But the Judge didn’t let #1 off the hook…he was allowed to withdrawal conditionally. #2 … Withdrew and #3 has a want of knowledge..

    Our estate is valued at just under 1.5 million …
    They want to foreclose on the Estate!

    They did not want the payoff….KC offered.

  4. Deborah wynn,
    Thanks for that link. Foreclosurefraud also had a CFPB Amicus Brief for that case for PDF download.

    I went to the CFPB website for the amicus.
    Ho v. ReconTrust, N.A. was filed on Aug 7, 2015 and they filed another on Aug 13 for Fair Debt Collections Act statute.
    snippet of the summary
    At the invitation of the court, the Bureau filed a brief arguing that a trustee engages in debt collection if it sends consumers notices stating that foreclosure will occur unless the consumers make payment on their debt.
    The court invited a governmental agency to weigh in on a case of significance.

    I like.

    Trustees are lawyers, and lawyers are lawyers.

    So the Aug 7 and Aug 13 briefs seem to cover both.

    I kept saying the remedy is outside the courts, and maybe a better phrase would be something like an agency outside the courts will provide the remedy.

    You cannot use fruit of the poison tree to gain a benefit; that is, you cannot commit an unlawful/illegal act to gain/obtain a benefit you would not have; had you not committed the unlawful/illegal act to get it

    Trespass Unwanted, Creator, Corporeal, Life, People, Free, Independent, State, In Jure Proprio, Jure Divino

  5. Kc, run that by me again please- who is getting 30 years’ worth of fees in advance? And from whom are they getting it?

  6. I like FEE SIMPLE!

  7. Its the Fees Boss…its the Fees!

    You can not have fees as an asset on your books if the insrest is unearned.

  8. Because the P & I equal the amount of my mortgage according to public records. It is also the amount I was invited to refinance.

    Now according to a little birdie…. The estate was released of their liabilities in those settlements.. Those liabilities the gangsters imposed upon us.

    So I ask…What do KC owe?

  9. I keep saying…its not an asset if its not earned. Theoretically
    Who in their right mind would advance 30 years in fees?
    The Estate?

  10. Overpayment.
    Fees are paid from unearned interest.
    Loans are ammorized…..VERY IMPORTANT DETAIL
    In case of early payoff …….
    Those who carry the fees as assets…….boom

  11. According to records….something about a refund.
    What they owe you in some cases.

  12. Right Ian.

    David…Good Case


    Trusts avoid probate….
    No Benificaries listed on our so called mortgage…
    Image that. Not even MERS.

    Mirror Mirror


  13. United States Court of Appeals

    For the Eighth Circuit


    No. 12-2508


    Bank of America, N.A.

    Plaintiff – Appellee


    Gary R. Peterson; Sally L. Peterson

    Defendants – Appellants

    JP Morgan Chase Bank, N.A., and its successors and assigns;

    Horizon Bank, National Association; Clear & Close Title Agency, Ltd.,

    also all heirs and devisees of any of the above-named persons who

    are deceased; and all other persons or entities claiming any right,

    title, estate, lien or interest in real estate described in the Summons

    and Complaint herein



    Appeal from United States District Court

    for the District of Minnesota – Minneapolis


    Submitted: March 4, 2015

    Filed: April 15, 2015


    Before WOLLMAN, BYE, and COLLOTON, Circuit Judges.


    WOLLMAN, Circuit Judge.

    This case is before us on remand from the United States Supreme Court. In

    Peterson v. Bank of America, N.A., 135 S. Ct. 1153 (2015), the Court granted a writ

    of certiorari, vacated this court’s judgment in Bank of America, N.A. v. Peterson, 746

    F.3d 357 (8th Cir. 2014), and remanded the case to us for reconsidering in light of its

    decision in Jesinoski v. Countrywide Home Loans, Inc., 135 S. Ct. 790 (2015).

    In Peterson, we relied upon our court’s decision in Keiran v. Home Capital,

    Inc., 720 F.3d 721 (8th Cir. 2013), in holding that the Petersons’ claim for rescission

    under the Truth in Lending Act, 15 U.S.C. § 1601 et seq., was time-barred by 15

    U.S.C. § 1635(f) because of their failure to file a lawsuit within three years of their

    transaction with Bank of America. 746 F.3d at 360. The Supreme Court held in

    Jesinoski that the Keiran court had erred in holding that a borrower’s failure to file

    a suit for rescission within three years of the transaction’s consummation extinguishes

    the right to rescind and bars relief. 135 S. Ct. at 792.

    In light of the Court’s holding in Jesinoski, we vacate that portion of our

    judgment in Bank of America N.A. v. Peterson that granted Bank of America

    summary judgment on the Petersons’ claim for rescission, reinstate that portion of our

    judgment that vacated the grant of summary judgment to Bank of America on the

    Petersons’ counterclaim for statutory damages, and remand the case to the district

    court for further proceedings consistent with this opinion.


  14. Sc- i sais the same thing a dozen times on this blog. No response at all.
    Pretty obvious, if the trust doesnt exist then there is no one with authority to appoint a master servicer or subservicer.
    The hundreds of pages detailing the obligations of the various parties and the operation of the trust are nonexistent.

  15. Where does bank of New York (mellon) (pass through accounts) come in, do they have similar problems

  16. The trust was a fingerprint of the imagination.
    It didn’t exist.
    So without that trust the PSA is moot.
    No Trust
    No PSA
    No Servicer
    No Escrow

    Without the Trust the Instrument is good fire starter.

  17. So the next party to the plate says….
    I owe them….
    Huh? Where did my money go?

    The law says…if you pay the wrong party…you still owe the true party.

    Proof of Claim Please…..

  18. It means I paid the Wrong Party With Reliance upon what was being disclosed and recorded.


  19. Little Folks….Two Thumbs Up!

  20. Predecessor….

  21. And I would Hardly say BOA stepping into the shoes makes them innocent!!!!
    I do not hold them responsible for what their successor did…
    But I sure as heck hold them to the fire for their own Actions!!!

  22. So when default entity created to step in the shoes of …….
    Make claim…and do not get the FC…they leave it open because the note was not endorsed NOR was the mortgage assigned to them….to step into the shoes of….

    So now default entity changes name….what are they actually getting?

    Can name change…go back and create docs to make it look like they went to an entity who settled with investors and no longer exist and back to default entity with name change. …..?
    How do you go back and deposit assets in ….oh never undated mind

    entityReconing. ….

  23. Reblogged this on littlefolksblog and commented:
    “And THAT means that the notice of default, notice of right to reinstate, notice of acceleration and notice of sale or foreclosure lawsuit are all wrong. It also probably eliminates the mortgage as a viable instrument without rescission or attacking the initial transaction under a claim of nullification. ”

  24. Hint!
    CW debt collector…was only a name change.
    The other part….was a different matter.
    You can not change what was filed.


  25. Do not forget about NYMB s MetLife ..and others.
    We took big haircuts.

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