Conflict of Interest: Foreclosure Mills

Despite warnings from Bar Associations and CLE courses that have been reported on this blog going back to 2008, lawyers routinely come into court and say “Good Morning your Honor, my name is John Smith and I represent US Bank.” That is not exactly true. In fact, it is a misrepresentation. In most cases the foreclosing party is named as a Trust, not a bank.  And the real client paying attorney fees is the CURRENT named servicer, who is taking instructions pursuant to some indemnification agreement with the named Master Trustee stated in the “trust instrument” (Pooling and servicing Agreement).

Not one of those parties has any interest in preserving the value of the collateral and in fact they all make a great deal of money when the foreclosure sale is “completed” and if the property is subject to a “credit bid” the proceeds of liquidation of the property to a third party BFP do not go to the “investors” whom the robo-witness (employed by the alleged servicer) will identify, as a group, as the owners of the debt acting through the alleged trust.

In the above scenario each of those parties has an interest in the litigation and each interest is separate and potentially adverse to the position of other claimed parties. For a lawyer to come to court and say that he/she represents the certificate holders, the trust or the trustee when he/she has no contact with any of them, is clearly a misrepresentation of the lawyer’s position. The lawyer is retained by the party claiming to be the servicer. There are no instances in which the lawyer is retained by the Trust or the alleged Trustee for the Trust.

Let us help you plan your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult


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).



There have been cases, on record, where the attorney admitted to having no contact with US Bank either as trustee or in any other capacity. Of course the same holds true for any other “bank” that is named as “Trustee.” In fact, for those who have followed this issue closely, the reader might remember that the lawyer in one case in Florida was sanctioned to the tune of $100,000.

The way that came out was that the “Plaintiff” lost the case and the homeowners were being awarded costs and fees. When the court, following the lead of the Plaintiff’s attorney, wanted to enter a judgment against US Bank, the attorney balked. He argued that US Bank was actually not part of the lawsuit and that the judgment should be against the trust. But the court saw that as a conflict and asked who the lawyer represented. His client was actually the self-proclaimed servicer. The Judge was not amused.

The opening introduction by the foreclosure mill lawyer is carefully calculated to take control of the narrative. The lawyer is using deception. The Plaintiff in a judicial foreclosure is NOT US Bank or any other party named as supposed trustee for a trust. The Plaintiff is a named Trust that may or may not exist.

But the Judge automatically sees this as a bank vs homeowner dispute wherein the bank has advanced money and is entitled to be repaid.

Looking at the case as “Common law trust” vs homeowner changes the perception of the case.

Ask the opposing lawyer to state whether he represents the Trustee or the Trust and that his firm has been retained as such. Ask if he/she also represents the subservicer and Master Servicer. Ask whether the attorney is representing the certificate holders. Make a note of each response. Then raise the obvious conflicts of interest and challenge the right of the attorney to represent any of them without clearing up potential conflicts since each of them has an interest in the outcome of the litigation.

And remember that if the debt was not acquired by the trust in a monetary transaction for value then the trust  does not own the debt and as such it is acting in a representative capacity for multiple sham conduits within the false scheme of “securitization.”

AND if there was no trustor who gave title to money or other assets to the named Trustee to hold in trust for the benefit of beneficiaries, there is no trust both as to the subject debt and all debts claimed by the lawyer to be property of the nonexistent trust. In truth, read the PSA, and you will see that there are no beneficiaries and there was nothing delivered to anyone to hold in trust. There is paperwork referencing the conclusion that the trust shall be construed to own loans but no reference to any actual transaction in real life.

This immediately sets up conflict between the named Trustee who is expecting a monthly fee for or royalty for use of its name, the alleged trust, the alleged master trustee, and the alleged beneficiaries who are ONLY certificate holders. The certificate, the prospectus and the PSA make it clear that the Trust owes money to the certificate holders but bar any right, title or interest to any supposedly “underlying” loans and even bar the certificate holders from inquiring or receiving reports on the “underlying”loans. This explains the absence of a true Mortgage Loan Schedule being attached to the PSA at the time of the alleged commencement of the trust.

The robo witness, an employee of a servicer claiming rights to administer the subject loan, is definitely NOT there in court or at deposition to protect the certificate holders who are not beneficiaries. Nor is he/she there to protect the interests of the alleged trust, which is empty and therefore nonexistent. Nor is he/she there to protect the interests of the “Trustee” who has no rights, powers or obligations to actively manage or even know the business of the trust (a business that does not exist).

The robo witness is there to protect a party who is never named — the so-called Master Trustee  for the nonexistent trust. The Master Trustee is also the underwriter of derivative instruments that were invented to create the illusion of an interest in loans. But the robowitness is not employed by the Master Servicer. His company has an agreement with the Master trustee/Underwriter or a power of appointment has been invented to redirect attention away from the agreement between the Master Servicer and the subservicer whose employee is testifying.

The Master Servicer NEEDS the foreclosure to completed for two reason: (1) to collect on its false claim for servicer advances, thus reducing the amount of money that will be available to pay the investors and (2) to maintain the illusion of legality and even stamp of approval from a court of competent jurisdiction. Maintaining that illusion is essential to supporting the illusion of foundation for the multiple layers of derivative instruments issued, sold and traded by the underwriter, each amounting to a sale of the same loan each time.

So the very opening introduction of the case by the attorney for the foreclosure mill is a lie. Which is one of many reasons why this Blog has the name “LivingLies.”


8 Responses

  1. No Wiley C. It is not the trustee they are representing . It is the trust without the trustee. Even though the trustee is named. But this is impossible. That is the point.

  2. Plaintiff attorneys always say the represent the bank. Well, folks, it ain’t the bank, it’s the trustee of the trust who is the plaintiff. The trustee is an agent of the trust, representing the interests of the trust (or, the trusts’ investors, depending on wording), not the trustee, nor the bank. Most often, too, it’s the sub-servicer who initiates, and who is a sub-contractor for the Master Servicer, not the trustee or the trust (or investors). The Master Servicer is directing activities via the sub-servicers. It’s the Master Servicer who is benefactor of a favorable judgment, not the trust or its investors. The trust itself has no injury, even if it did exist. In the meantime, sub-servicers have no direct contractual relationship with the trustee or the trust. In fact, it’s a direct violation of PSA Section 2.02 for the trustee to have any relationship with sub-servicers.

    Sub-servicers have become bounty hunters for the Master Servicer.
    Crooked doesn’t even begin to describe what’s going on.

  3. Neil — YOU NAILED IT!!! Please – people, listen to Neil on this. The servicer attaches the “trustee” to the name of the trust. But, the name of the trust is separate from the trustee to the trust!!! The servicer tries to convince the judge that the servicer is agent for “Blah blah Trustee to BS trust..” and they represent the trust. Or, no they represent the trustee. NO NO NO — They represent NEITHER. NO NO NO. These trusts, if they still exist, and if they ever existed. are separate from the legal holder/owner for the trusts- the trustee. They are not the same. And, odds are the trustee has no record — which they should have. YES YES YES — look at representation.

    RIGHT ON NEIL!!!!!!


  4. This is nothing but continuation of the grand ponzi scam and the only way you can win is if you are very rich and have a great lawyer who really knows the whole story here.

    Local recorder offices are so naive and unwilling to help since they benefit as well, it is nearly impossible to fully expose and beat this huge huge scam. The bottom line to me, and based upon my experience is the fact that our very own government is in on the ponzi scam all the way up to their eyeballs.

    I have been fighting nasty old Bank of America and all its “co-conspirators” for nearly 9 years now with the initial five (5) supposed loans that were allegedly originated, funded, and briefly serviced by Countrywide Home Loans.

    I sent huge packets to the new people in government like Vic Mulvaney, Dr, Ben Carson, and President Trump and not even ONE return letter or response!!! Just like with the Obama time when neither he nor anyone did anything despite all the real evidence and no facial evidence and total disregard for our jurisprudence system.

    Will be interesting to see what happens in the Colorado Appeals Court in ” GEOREGE ET AL. V. URBAN SETTLEMENT SERVICES, INC. AND BANK OF AMERICA”. The new Golden Rule today is he who has the gold rules and that is what one is up against today.

    Too bad that all the states don’t ban together with great attorneys (if there are any who really care) and go after all this corruption and racketeering like the state of Montana did in the Morrow Case that then got closed quickly and sealed to protect the banks!!

    A lot of people are now taking advantage of the situation in makcing claims they can help you, but the bottom line is MONEY. That is also the real thing that any and all claims for foreclosure should be based upon actual evidence and “show me the money trail and true forensic chain of title to be able to ask for a foreclosure.

    I even lost one property with the known robosigner Michele Sjolander whose deposition is on the Internet. Too bad all of this is about money, power, and greed as I see it. Semper Fi.

  5. Ian, my trust closed in 2006, and all the so-called transfers of any type occurred years after it closed. Definitely not Kosher.

  6. This is exactly the tactic used in my case, yet the judge allowed a stand-up and stated proclamation by plaintiff attorney that he represented the trust’s bank without any proof tendered as demanded by my motion to compel authorization credentials. The bank is not the plaintiff anyway, it’s the trust. Summary judgment for plaintiff… be appealed. It’s all crap.

  7. Some of the trusts at least register their REMIC with the IRS- in my case, the Trust was never registered in the 2nd quarter of 2005, or the first or third quarters for that matter.
    So the complaint was brought by a nonexistent entity.
    That doesn’t seem kosher to me

  8. Reblogged this on California freelance paralegal.

Contribute to the discussion!

%d bloggers like this: