Trustee v Active Trustee US Bank Fails to show or even attempt to show it is an active trustee


Even where there is a clerk’s default “The burden is on the plaintiff to establish its entitlement to recovery.” Bravado Int’l, 655 F. Supp. 2d at 189.

Here is an example of how lawyers purport to represent US Bank when in fact they are creating the illusion that they represent a trust and in reality they are representing a subservicer who is receiving orders from a master servicer of a nonexistent trust. As Trustee of the nonexistent trust USB had no active role in the nonexistent trust. As the inactive Trustee for a nonexistent Trust, no right, title or interest in the debts of homeowners were within any scope of authority of any servicer, subservicer or master servicer. Each foreclosure is a farce based upon assumptions and presumptions that are exactly opposite to the truth.

Given the opportunity to amend the complaint, lawyers for USB chose not to amend — because they could not plead nor prove the required elements of an active trustee. Because of that USB lacked standing to bring the action except as agent for an active trust or on behalf of the trust beneficiaries. But where the certificates show that the certificate holders do NOT have any interest in a mortgage or note (true in about 70% of all cases), then they too lack of standing. And if the Trust is not an active Trust owning the debt, note or mortgage then it too lacks standing.

Let us draft your motions and do the research necessary to draw the attention of the court to the fraud taking place under their noses. 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps). to schedule CONSULT, leave message or make payments. It’s better than calling!

Hat tip Bill Paatalo

see Memorandum and Order – USBank Trust NA as Trustee for LSF9 MPT v Monroe

See Judgment – USB Trust for LSF9 v Monroe –

While this case discusses diversity and other issues concerning US Bank “as trustee” the reasoning and ruling clearly expose the truth about pleading irregularities by attorneys who purport to represent US Bank or a REMIC Trust.

A debt is an asset to anyone who owns it. Industry practice requires that for transfer of ownership, there must be an agreement or other document providing warranty of title, confirmation of the existence and ownership of the debt and proof of authority of the person executing the document. Go into any bank and try to borrow money using a note as collateral. The bank will require, at a minimum, that the debt be confirmed (usually by the purported debtor) and that each party in the chain show proof of purchase.

Without consideration, the assignment of mortgage or endorsement of the note is just a piece of paper.

When there is an assertion of ownership of the loan, what the banks and so-called servicers are actually saying is that they own the paper (note and mortgage) not the debt. In the past this was a distinction without a difference. In the era of patently f false claims of securitization, the debt was split off from the paper. The owner of the debt were without knowledge that their money was not under Trust management nor that their money was being used to originate or acquire loans without their knowledge.

The securitization sting is accomplished because the owners of the debt (the investors who sourced the funds) are unaware of the fact that the certificate they are holding is merely a promise to pay from a nonexistent trust that never was utilized to acquire the debts and whose ownership of the paper is strictly temporary in order to foreclose.

The failure to make that distinction between the real debt and the fake paper is the principal reason why so many people lose their homes to interlopers who have no interest in the loan but who profit from the sale of the home because a judgment was entered in favor of them allowing them to conduct a foreclosure sale. 

This case also sets forth universally accepted legal doctrine even where there is a clerk’s default entered against the homeowner. The Judge cannot enter a judgment for an alleged debt without proving the debt — even if the homeowner doesn’t show up.

“When a default is entered, the defendant is deemed to have admitted all of the well- pleaded factual allegations in the complaint pertaining to liability.” Bravado Int’l Grp. Merch. Servs., Inc. v. Ninna, Inc., 655 F. Supp. 2d 177, 188 (E.D.N.Y. 2009) (citing Greyhound Exhibitgroup, Inc. v. E.L.U.L. Realty Corp., 973 F.2d 155, 158 (2d Cir. 1992)). “While a default judgment constitutes an admission of liability, the quantum of damages remains to be established by proof unless the amount is liquidated or susceptible of mathematical computation.” Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974); accord, e.g., Bravado Int’l, 655 F. Supp. 2d at 190. “[E]ven upon default, a court may not rubber-stamp the non-defaulting party’s damages calculation, but rather must ensure that there is a basis for the damages that are sought.” United States v. Hill, No. 12-CV-1413, 2013 WL 474535, at *1 (N.D.N.Y. Feb. 7, 2013)

“The burden is on the plaintiff to establish its entitlement to recovery.” Bravado Int’l, 655 F. Supp. 2d at 189.


9 Responses

  1. Thanks, Ian. Rhody — anything with Countrywide should speak for itself.

  2. ANON- great post! Explained w specificity!

  3. Does anyone know whether the Bank of New York, claiming as a trustee for the CertificateHoldres of CWABS, INC., asset-backed certificates, series 2007-4 is an active trustee or not. If not, please provide some information.

  4. There is much confusion over trusts and trustees. This case points out the law accurately. Sometimes one has to go against one’s own instincts, and play their game.

    Neil should delve into this issue more. One of the recent trends by servicers is to remove the trustee as the legal owner of the loan, and replace them with the trust name. Although the trustee is named in foreclosure cases, servicers often insist the trust owns the loan. This is an important distinction in subject matter jurisdiction. If the trust is named without a trustee, the trust must prove it is a corporation, and identify its certificate holders or beneficiaries for subject matter jurisdiction. If the trustee is named, the trustee must be active. And, that is where the problem lies. An active trust CANNOT operate without an active trustee who is the LEGAL owner.

    The trusts were formed, as Neil says, without funding, because the debt was already (wrongly) classified as in default, hence, no funding was necessary. This is also corroborated by the fact that the loans were never removed from on balance sheet accounting, because they were never a true loan asset to any bank. Thus, the securitization by removal to off balance sheet conduits is false. And, once discovered, the market, and nearly whole economy, collapsed.

    Since that time, the trusts have been torn apart and dissolved. Any discussion as to whether the trustee or trust owns the loan is just an exercise in futility. A word courts love to use. In this particular case, a new trust was formed, and it caught the court’s attention.

    Nevertheless, if we assume that the trusts and their trustees, were set up with the intent to be viable, the trustee played an active role, and was designated the legal owner of the loans. The servicer was required to send all payments to the trustee — who acted on behalf of the certificate holders. The trustee’s role was very active. However, once the trusts dissolved, or even if a loan defaulted before it’s dissolution, the defaulted loans (which were declared defaults from the onset), were swapped out by derivatives. Therefore, the trustee’s role became INACTIVE. While the trust can hold now declared defaults, under iRS law, for a certain period of time, the servicer no longer services for the beneficiary certificate holders, but for the swap derivative holder, who is not a part of the trust, and not a security holder (derivative are contracts not securities). Swap Holders remain concealed by the servicers — who own nothing but the right to service the debt UNLESS they are also the swap holder.

    If you are trying for modification, or have one, that modification is actually with the undisclosed devil — the swap holder debt buyer. If you are fighting foreclosure, it should be in federal court, as this case was, so that you may challenge diversity. Is the trustee active for your loan (which has likely been swapped out if the trust is active), and for the trust (which in effect has been torn apart and no longer operates in the intended manner).

    Even if a foreclosure is dismissed, someone will come back at a later date. So the above issues should be exposed to block the devil’s return. .

  5. In most courts a default is petitioned by the plaintiff if the defendant homeowner fails to appear and defend or pursuant to a sanction for bad conduct justifying such. The court holds a hearing, like an OSC, usually in camera, to determine if the default occurred and the sum of the damages, costs etc., justifying the final judgment to be entered.

    THE GOOD NEWS IS….If you are in default all is NOT lost, but you must move promptly to set aside or challenge the default or accept the final judgment. We can assist at Consumer Rights Defenders, by calling Sara or Steve at 818.453.3585. We are one of very few organizations facilitating a settlement resulting in a cancellation of the Note and Mortgage and a home being awarded to the borrower. Ask us when you call, today, about the “NY Free and Clear” case from 2017.

  6. The case really says there is a problem with the pleading. It doesn’t say there was no trust or a nonexistent trust, or anything like that.

  7. Who were the attorneys who represented the homeowner? Please post that information if possible.

  8. What is the court process to prove the ownership of the debt after default?


    Leo Blas


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