The Neil Garfield Show: Why the Trusts are Busts

Thursdays LIVE! Click in to the The Neil Garfield Show

Or call in at (347) 850-1260, 6pm Eastern Thursdays

The settlements with the banks are a scam. Yesterday RBS settled with US authorities for skullduggery in the name of “so-called residential mortgage-backed securities.”  They took in over $30 billion and only have to pay about 20% of the theft ($5.5 billion).  No criminal charges apply.

The importance of this particular report is the way it was written. Attorney Neil Garfield says, “this is the first time I have seen “so-called residential mortgage-backed securities” used in mainstream reporting.” The significance is that the term “so-called” while penned by the author of the article indicates skepticism as to whether the certificates were ever backed by mortgages. And if they were not, then the certificates were in fact securities that could be regulated as securities, free from the 1998 exemption that classified them as private contracts.

Of maximum importance to homeowners and foreclosure defense lawyers is that they make the obvious connection, to wit: if the securities were not mortgage-backed, there is only one logical conclusion— the trust never owned the mortgages that were described generically in the prospectus. If the trust had owned mortgage loans, then the securities would have been mortgage backed, in which case there would have no charges against RBS much less a settlement.

THAT means that the Trusts could never be named as Plaintiff in judicial states or beneficiary in non-judicial states without misrepresenting the nature of the so-called trust that existed only on paper and frequently incomplete paper that did not include signatures or exhibits. The mortgage loan schedule was never attached in any trust. The MLS attached to the PSA was specifically disclaimed in the prospectus as being there by way of example only and that none of the “loans” described in the MLS actually existed, but would be replaced by real loans.

This leads in turn to a single logical conclusion. Assuming the Trust existed on paper that was properly completed, the Trust either (a) never received, directly or indirectly, the original loan documents or (b) the trust did receive the loan paperwork but has received no authority to do anything with it. The Trust is therefore not a creditor, not a lender, not a servicer and not an agent for a creditor from whom the trust could have received authority to enforce. The trust, therefore, becomes a sham conduit used solely for the purpose of foreclosures and otherwise was completely ignored.

In terms of litigation, if you would like to discuss how to address this in discovery, please contact Neil Garfield for a consultation.  He can explain the relevance of the existence of the trust, real world transactions and how attorneys and homeowners can leverage these findings.

Attorney Charles Marshall can be reached at:



Neil F. Garfield can be contacted at

MAIN NUMBER: 202-838-NEIL (6345).

Get a Consult! to schedule, leave message or make payments.


3 Responses

  1. When one looks into the history of trusts, one finds that we are living as “tenants” in a feudal system; the truth is hard to swallow; but, here it is:

  2. I think louise has it down.

    Say, just thought I’d mention, today I was perusing my PSA and came up to Section 3.05 titled “No Contractual Relationship Between Sub-Servicers and the Trustee or Certificateholders.”

    ……, classic “Servicing” extends from the creditor, not from the Master Servicer. The claimed owner of the debt has tried to gap its’ relationship with the servicer, which it cannot do, it’s impossible. Yet, it attempts to enforce the Master Servicers’ contracted rules directly onto Sub-Servicers. One-way street. Don’t think that a contract it makes.

    Now, Sub-Servicers come to court claiming to be an ‘agent’ of the creditor with rights to enforce. We’ve been thinking those rights came by way of the POA in the PSA, but it can’t, by the PSA.

    Wow, all they need now is a little incentive.

  3. IMHO, I don’t think there is much about mortgage backed securities and the entire trust mess and origination which is not fraudulent.

Contribute to the discussion!

%d bloggers like this: