A number of homeowners who are registered to attend the seminar are requesting that a use specific examples that are relevant to their own case. This is not possible in a 90 minute lecture that gives an overview of what is expected from forensic loan audits. I will be using some examples, but only in general terms.
One person specifically asked that I address what appears to be a new variation of U.S. Bank appearing as trustee, e.g., US BANK, NA as Legal Title Trustee FOR TRUMAN 2012 SC2 TITLE TRUST.
This is a variation in wording more than it is anything else. Based upon my review of the actual trust agreements involving U.S. Bank it has always been merely a legal title trustee for a single beneficiary, to wit: the investment bank who was the underwriter and seller of certificates to investors. In the case of the word salad described above, attorneys are once again shifting the wording to make it seem more credible.
But upon close analysis, you can easily see that U.S. Bank NA is not saying that it has been entrusted with the debt or the note, or that it purchased by the one for value, as required by article 9 section 203 of the Uniform Commercial Code.
Further, the attorneys continue to withhold a description that identifies the alleged trust or its existence. This is a facial deficiency which should affect any examination of pleadings and documents, whether recorded or not. If the trust actually exists, the normal wording would be, for example, “a common-law trust organized in the State of New York and currently existing in the State of Michigan.” Or it can simply say “a Michigan trust.” But the absence of any such description leaves the reader with no information at all about the existence of the trust.
In addition, stating that U.S. Bank is merely a legal title trustee is an admission that U.S. Bank is not the owner of the debt or the note and quite possibly not the mortgage either. This is a further attempt to avoid the requirements and conditions precedent imposed by law in all US jurisdictions. If the beneficiary under the alleged trust is the actual owner of the debt, then I would concede that having U.S. Bank as legal title trustee for the actual debt owner would not invalidate any action to collect or enforce the debt, note or mortgage.
But the investment bank who was the underwriter who sold certificates to investors never retained ownership of the debt beyond 30 days after funding the origination or acquisition of the debt. Thus the illusion of a legal title trustee for a dubious trust with a beneficiary who no longer holds an interest in the debt is both a facial and substantive deficiency.
This is yet another example of how the investment bank’s or using new special-purpose vehicles to hide their involvement in the origination and acquisition of loans. Remember that investment banks are actually brokers. They are not principals in transactions. Any temporary ownership that they might have had with respect to the debt and any temporary claims that they might have had with respect to the note and mortgage were extinguished when they divested themselves of any interest in the flow of interest payments, principal payments, or sale proceeds to satisfy the debt.
Finally I should make one last note on this topic. Some of the special-purpose vehicles are being used as conduits for elaborate schemes to launder money and debts arising from nonperforming loans. The banks believe, with good reason, that the more layers they present to a court, the more the court will tend to accept the authenticity of the transactions that are referenced and fabricated documents. As most trial lawyers know, the “greater weight of the evidence” is frequently interpreted literally. By presenting an ever larger stack of documents, involving multiple business names, even if they are not actual entities, the illusion is complete.
The job of the forensic analyst in the context of foreclosure litigation is actually to reveal the facts that cannot be known by mere reference to the documents. In addition to revealing discrepancies and inconsistencies, the forensic analyst should be identifying gaps in what would otherwise be the prima facie case of a claimant seeking foreclosure.
I’ve spoken with many attorneys who have been successful in defending homeowners in foreclosure actions. They all say basically the same thing. While discovery is important and enforcement of discovery is even more important, nearly all cases are won because the lawyer was able to break the robo-witness and successfully object to exhibits introduced by the attorneys who assert that they represent U.S. Bank, when in fact they have had no contact with U.S. Bank, nor have they had any contact with the investment bank. The investment bank so far has successfully shielded itself from liability for instigating false claims by false claimants.
Filed under: foreclosure |
Poppy – does Ocwen assign the the note (and/or mortgage) to the trust, or the trustee to the trust?
Please provide your email contact.
Thanks.
No doubt…in my case and I can only speak to that with certainty, I am chasing the servicer, Ocwen. They have counterfeited every document to appear as, Ocwen “as attorney in fact” assigned the note to the trust, on behalf of New Century…it is 100% the servicer. Looks like when the CSMC Trust went belly up, Ocwen bought the last of the loans. They are the investor….but clearly on behalf of themselves, not the trust. That trust was deceased ages ago. And New Century was also deceased, in bankruptcy, then a stay was in place from my federal action “on all things NCMC”, at the same time they were moving assets belonging to them and simultaneously filing in the state jurisdiction (They just got an order in 2018, going on since 2011). The New Century Liquidating Trust, formerly NCMC surrendered their authority in 2011, with NY State SEC Doc 10.48, used an unattached allonge on 03 August 2012, 5 years after the trust was closed, the MERS executory contracts were extinguished by Judge Carey-Delaware bankruptcy court, etc…
Get this,15 different lawyers have been involved. It is drudgery getting this before the courts. I gotta say, Neil has said be fair to the judges…I am not seeing some of this. It is impossible, improbable the judges do not get the basic tenets of standing…it is a fatal flaw.
On appeal right now from the federal court, then in the state for a rehearing on the matter and allow the original federal court, that has the jurisdiction to hear the matter from 2011. The federal judge administratively closed the case and allowed either party…which was Konar v. NCMC – Ocwen, to open the case for “good cause” after the resolution of the NCMC bankruptcy.
How can the courts not get this? The exhibits are clear and tell the story. None of it conforms to the Rules, Statutes and their own contractual agreements. Angry, frustrated, tired…scoured these contracts, documents and affidavits…this is not just perjury, it is criminal. All the lawyers know.
Poppy – you are correct in much of what you say.
1) Custodian keeps in safe place for legal holder – in a traditional trust – that is the trustee. A trust cannot operate without a legal holder. But, once loans are reported in default – they leave the trust (or zero value is reported) and the trustee role as fiduciary is gone.
2) Servicer works on behalf of the legal holder. There is no authority from a trust directly to the servicer. Servicers do not work on behalf of the trust. They work on behalf of the trustee to the trust – who works on behalf of the security investors.
3) Servicer has the loan records, BUT not the loan documents. And, they have no history before when they started servicing.
4) Legal holders are likely indemnified. That, however, does not negate their status.
If one is paying — the money goes to a collection account with the servicer, who then deposits into the trustee distribution account for pass-through to the security investors. A servicer cannot directly pass through any money to the trust. A trust has no contact itself, The only contact is the trustee.
All may be irrelevant as these trusts are dissolved, and no pass through of cash now occurs. Further how the trusts were even formed is dubious. .
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The theoretical holder is the “trustee…just to clarify. The literal holder is the custodian…if the trustee should need documents, they would acquire them from the custodian.
Part of the problem we all have is “all” of the documents presented come from a servicer…ask yourself: does the servicer have intimate knowledge of origination, deposit to the trust, the sale of note..prior servicing. I say no, their knowledge is limited and we are subject before the courts to all they say and present, with protections of attorney-client privilege and any other mysterious defenses they can come up with.
BS all of it.
I’m gonna step in the deep end of pool. The literal “holder” is the custodian…a theoretical concept of the REMIC, if there is a functioning performing trust.
I’m sure you folks will get in my behind here…
The “trustee” is an “unbiased”, neutral party, who holds title, for the trust, working on behalf of the trust and the borrower. Holding representations and warranties from the seller, depositor, custodian, etc…parties to the trust.
A servicer works on behalf of the trust, not at the command of the “trustee”. The servicer would notify the trustee in the event of a default or a problem on the borrowers end.
We are seeing these terms twisted for the benefit of the servicer. Sevicers like Ocwen, did the same thing BOA did with Countrywide. They bought up hundreds of millions of dollars in servicing rights, converting those rights for themselves, calling themselves “holders”, not holders in due course, which would grant them rights and zero liability. FTC Rule 16, “these people are not innocent purchasers”…they know what they do and you have claims against them.
I have personally seen nothing in my possession, indicating a sale of anything. A bogus “unattached allonge assignment” 5 years after the trust was closed and done by “attorney in fact” Ocwen, with the corporation in bankruptcy…go figure.
Legal holders in due course are “indemnified” from liability.
My thoughts on MERS…simply put: if the notes were properly assigned to the trust entity and sold, with the proper parties, then recorded with MERS, MERS would have access to a certified copy, done…it would fly under UCC Rules. Because the trust did not have possession of the instrument, a MERS assignment is created…making endorsements as a beneficiary, nominee…this doesn’t work.
Neil – if these trusts are operating as a REMIC (traditional trust) the trustee is the legal holder. That is the law. They are not the OWNER. They are legal holder, for the benefit of security investors, and the trust cannot operate without the trustee. Problem is all the “trusts” are broken – prematurely “paid out.”
The servicer comes into court and claims to directly represent the “trust,” because they falsely place the trustee name as part of the legal name of the trust. If servicers are representing the trusts, and not the trustee, which they are, then it is a business trust, and the state of incorporation should be determined for diversity jurisdiction purposes (if one is in federal court).
The reality is — the trustee holds nothing. These trusts no longer operate as a traditional trusts. And, the servicers are acting without authority from anyone related to the dissolved or dismantled trust.
Lets go further — one is paying. And the servicer claims to be acting directly for the trust (with the trustee name in front of it), but the trustee has no record.
I understand the role of the security underwriter is big. But, if they want to play the game — challenge representation. Don’t just accept. They want the trustee there?? Separate representation. This has been a major error by attorneys.
You are onto something. Have to carry it further.
Thanks.