U.S. Bank Trust, N.A. v. Monroe, 2017 WL 923326 (N.D.N.Y. March 8, 2017)
This case is much more than a decision on diversity jurisdiction. The decision is important for that reason but even more substantively it lifts the hood over the “Trustees” of so-called REMIC Trusts.
Listen to the Last Neil Garfield Show at US Bank, Trustee loses Uncontested Foreclosure
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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
Hat tips to Bill Paatalo and Charles Marshall.
Here the court finally brings US Bank (and others like Deutsch etc) to task about their positions as “Trustees” and makes the distinction between the alleged “Trust” who IS the Plaintiff (if properly described) and the alleged “Trustee” who is NOT the Plaintiff. That distinction throws off the entire narrative the banks are pursuing. everyone thinks they are dealing with US Bank when in fact they are dealing with the trust. The insertion of US Bank as a Trustee in name only can now be attacked with the winds of precedent behind you.
The nut cracked when the Court considered the question of whether US Bank had any duties, obligations, control or even knowledge. A negative answer to all of those questions would result in a finding that they were not a Trustee, and that the “property” (loans) were never entrusted to them or any other trustee, thus defeating the very existence of a trust and any claims for REMIC tax treatment, as well as claims for exemption under SEC Registration rulers.
The problem for the banks — all the major ones — was that the documents upon which they relied to establish the Trust specifically prohibit the Trustee from exercising any control, or even asking questions about “trust assets (their existence or status) thus establishing an unknown third party who has been anointed by the Master Servicer with the job of acting as “subservicer.”
Getting lost in the weeds many thousands of pro se litigants and foreclosure defense attorneys have missed the obvious, to wit: there is no trust without a COMPLETE trust instrument, a trustor, beneficiaries and PROPERTY that is entrusted to the trustee thus forming the physical existence of the trust as opposed to the hypothetical existence of a trust that exists only on paper (if in fact the Pooling and Servicing Agreement was fully executed and all the exhibits were attached (including the MLS- Mortgage loan schedule).
If U.S. Bank wishes to proceed in federal court, it must, within thirty (30) days, move to amend its Complaint to address the deficiencies identified in this order.
Faced with the challenges spelled out in the Order and the invitation by the same court to amend pleadings allegedly filed in the name of US Bank as Trustee (and not in its individual capacity), the lawyers disappeared and with them took US Bank back into the shadows.
As I have seen in thousands of cases, they just dropped the case and walked away. This of course leaves the homeowner in limbo unable to sell or refinance the property but still living in their home without mortgage payment or rent.
Filed under: foreclosure |
@ EVERYONE
For the ruling on subject matter jurisdiction:
https://docs.justia.com/cases/federal/district-courts/new-york/nyndce/1:2015cv01480/104404/15
MEMORANDUM-DECISION AND ORDERED, that U.S. Banks Complaint (Dkt. No. 1) is DISMISSED for lack of subject matter jurisdiction, and without prejudice to refiling in state court; and it is further ORDERED, that U.S. Banks Motion (Dkt. No. 12) is DENIED; and it is further ORDERED, that if U.S. Bank wishes to continue this action in federal court, it must move to amend its Complaint with thirty (30) days of the filing date of this Memorandum-Decision and Order; and it is further ORDERED, that if U.S. Bank fails to file such a motion as directed in this Memorandum-Decision and Order within thirty (30) days, the Clerk of the Court shall close this case without further order of the Court; and it is further ORDERED, that if the Court grants such a motion to amend the Complaint, U.S. Bank may then file a renewed motion for default judgment consistent with this Memorandum-Decision and Order. Signed by Senior Judge Lawrence E. Kahn on March 08, 2017. (sas)
Bob G. Provide your email
ANON…where are you located?
Bob G. is correct. A trustee is supposed to be the legal owner, on behalf of beneficiaries, of the loans. But they never are, because the trustee’s role is only when there is actual cash pass-through (if there was ever any actual cash pass-through). Once servicer advances stop, and they do, the default is swapped out of the trust, by a contract which is not a security. The trustee’s role is done. Trustee cannot be named as the owner on behalf of the default swap derivative debt buyer that the servicer refuses to identify. This is why bank attorneys are now falsely coming in and naming the TRUST — but a trust cannot stand without a trustee. If Diversity jurisdiction is actually applied – the trust itself must come forward and identify all “investors.” If even one resides in the state, diversity is defeated. They cannot , and will not, name any investor in the loan trust because the loan has been swapped out. So they have to name the swap holder/debt buyers. If even one is from your state, federal diversity is defeated, or can defeat state jurisdiction if none are in your state. Point is — it forces the issue. None of this has been done. All concealed from courts. Diversity Jurisdiction opens the door to mandated diversity jurisdiction discovery. Discovery, otherwise, has been denied in case after case after case. The Courts meet their match in this issue. Bob G is correct.
Thank you for great article, but l live in Florida.
I search Fl. DCA`s opinions/cases every day.
– No 5y SoL,
– No Res-Judicata,
Only the Standing issue, included as part of Affirmative Defenses and litigated by good counsel. Then at trial, you have a chance to object Plaintiff`s allegations, testimonies, pleadings filed before the trial.
– Forget about Defendant`s motion for Sum. Judgment. Even if you win battle, you will loose war in Appeal unless you are represented by very, very good attorney.
Not many good attorneys able to litigate foreclosure cases left. Most of them was bought by Banks. Money talks. I was at two hearings so far and I wish that in my case I`m represented by Plaintiff`s attorney. So sad.
EXCELLENT EXCELLENT EXCELLENT. Diversity rarely decided based on law. This is all new. Wow — Court may never have had jurisdiction to begin with!!!!!
Actually the nut didn’t crack “when the Court considered the question of whether US Bank had any duties, obligations, control or even knowledge. A negative answer to all of those questions would result in a finding that they were not a Trustee, and that the “property” (loans) were never entrusted to them or any other trustee, thus defeating the very existence of a trust and any claims for REMIC tax treatment, as well as claims for exemption under SEC Registration rulers.”
That was mere dicta. The nut cracked over the diversity issue and federal subject matter jurisdiction. The opinion can be read here: https://ecf.nynd.uscourts.gov/doc1/12514400976.
Oh this is very interesting to me. This is the same trying to take our home. Does anyone have a link to the case? I would love to read it.
no, it doesn’t leave the homeowner in limbo…the homeowner can now bring a quiet title action.