Bullseye! Investors Are “Far Removed” from Alleged Underlying Mortgages


It is in tax litigation that some of the truth comes out. While the courts have yet to determine if the REMIC Trust ever existed, they are coming to some interesting conclusions — corroborating all the basic underlying themes of this blog and all my work since 2007.

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Hat Tip Bill Paatalo

see Cashmere Valley Bank v WA Dept of Revenue_Unsecured Mortgages (WA Sup Ct 2014)

Borrowers making the payments that eventually end up in Cashmere’s REMIC investments do not pay Cashmere, nor do they borrow money from Cashmere. The borrowers do not owe Cashmere for use of borrowed money, and they do not have any existing contracts with Cashmere. Unlike HomeStreet, Cashmere did not have an ongoing and enforceable relationship with borrowers and security for payments did not rest directly on borrowers’ promises to repay the loans. Indeed, REMIC investors are far removed from the underlying

mortgages. Interest received from investments in REMICs is often repackaged several times and no longer resembles payments that homeowners are making on their mortgages.

While it is true that the interest received by Cashmere from the REMICs ultimately comes from promissory notes secured by mortgages and deeds of trust, Cashmere has no interest in the underlying mortgages and deeds of trust and is not a beneficiary of those instruments.

In plain language, all cases in which XYZ appears as Plaintiff or the alleged beneficiary under a deed of trust and it asserts its appearance as, for example, US Bank as Trustee for the certificate holders of 2007-A Mortgage pass though certificates it is not possible to ascertain the interests of the certificate holders without examining the certificates, their indentures and any side agreements that apply.

As stated in this Washington Supreme Court case, certificates vary as to whether they grant an interest in notes, mortgages or even a particular income stream. Prepayments by homeowners might not be paid at all to “preserve” the interest income flow. Payments received by way of a foreclosure sale are handled the same way, with deductions for alleged “servicer advances” that are neither advances nor do they come from the servicer.

The ultimate source of cash flow was mortgage payments. However, Cashmere’s investments were not backed by any encumbrance on property nor did Cashmere have any legal recourse to the underlying trust assets in the event of default. Thus, Cashmere’s investments were not “primarily secured”

by mortgages or trust deeds. We affirm the Court of Appeals and deny Cashmere the deduction.


The secondary market buyer acquires the right to receive the borrower’s principal and interest payments on the home loan and also the right to foreclose on the home if the borrower fails to make timely payments.4 The buyer often purchases numerous mortgages from various institutions and then “securitizes” the mortgages by pooling (or packaging) the mortgages and issuing interests based on those pools to investors. These interests-that is, these MBSs-vary in how they are structured and what kind of interest the investors receive. See Cashmere Valley Bank v. Oep’t of Revenue, 175 Wn. App. 403, 305 P.3d 1123 (2013) (explaining creation of MBSs).

7 Responses

  1. Fraud is allowed under the contract system called by UCC. Sorry folks, they do it with impunity UNLESS you can make a case with statutes, codes rules etc and enforce it.


  3. Any details of the trust CWABS, INC., Asset-Backed Certificates,series 2007-4 ? BONY is the trustee in our case.

  4. Warren Buffet is an investor in Wells Fargo. He has given all his money to charity. My money that Wells Fargo stole from me and I want my money back.

  5. How about U.S. Bank 2007-1?
    My home was foreclosed on and that is the certificate that i coulld not find even existed. My supposed “loan” was reassigned a hand full of times before final loss in court. It took over 4 years for my loan to be put in the trust…. What ever happened to the 90 day rule? Still i was foreclosed on. Hrrrumph! Kinda sounds like Trump…

  6. Why isn’t the truth EVER being told!! ?? and it is always skirted around?? Is it because your ALL of the BAR???
    If all law is commercial, and all instruments are securities operating in commerce and trade, than pursuant to UCC8 I have all right to ‘opt-out’ and dissent.

    And if my name is a corporation, which are fictions in commercial, and I was incorporated without disclosure or representations, stated another way – I did not volunteer, is concluding to violations under the 1790 copyright act statutes at large

    The argument is rather conclusive, simple and lawfully and legally sound
    Lets take this to another level ….one that rises above and beyond canon law, and in fact renders canon law void, because sensibilities are being ignored due to the system being fixed as it is.
    The fact that an intentionally undisclosed third party, pledge me, a free thinking living woman, into the hands of artificial intelligence whereby my actions are no longer my own, but controlled by the decisions of artificial intelligence, derived from a set preprogrammed rules is morally repugnant. For artificial intelligence to decide the future actions of one individual living breathing woman on sets of rules designed en masse, is a violation in gross.
    Are not the living capable of forming thoughts upon he and he alone may make decisions upon which to act or not act, is he so decides. Is that not why God created man. If so, than artificial intelligence is a violation of Natural and Divine Law, which supersedes canon law, rendering it void, which places the decision on the living man, or living woman to opt out or if so he decides, remain a slave.

    Therefore, I declare the entire system which is on basis of artificial intelligent programming of Mindbox and Brightware as abomination operating against the will and free thinking (wo)man the globe over … 99% trumps all 1% forced thought

    I can and will show you exactly how Merrill Lynch used its patented processes and trademarks to execute the largest fraud in the history of this world. How they sent us all over the world on traveling visa’s as ‘armchair’ traders, how they separate the accounts and divert monies, how they set up the cartel structure, how they are laundering through hundreds of billions through hospitality and hotel industry, namely Hilton, how they established the transmitting utility structure to operate directly through to state treasurers, how they fixed it so that they steal your entire estate ….

    but to God – there is no greater and it is by His will that we think and reason, decide and act. Wow, to those who will not enter the Kingdom for eternity without repenting, time is of the essence!

  7. I am in WA State and have US Bank as trustee of mysterious LIBOR certificates. And I am on the cusp of filing an adversary proceeding under Ch. 11. This news may make my case that has been ongoing off and on for 10 years. I am overwhelmed at the moment and this case both relieves and burdens, like ammunition falling into my lap but needing understanding how to use it to fight back. Thank you Neil ad Bill Paatalo. I’ll keep you all posted.

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