Who is the Plaintiff? US Bank or the Trust?

The following is my reply, with some editing, to a client who is faced with some typical plays used by attorneys for the banks.

The game is that they are doing everything they can to direct attention to the name of the trustee, which is banking institution instead of the trust which is the actual named Plaintiff or Beneficiary.

So they style the case “US Bank v John Doe” instead of “XYZ Trust series 2006 by and through its trustee US Bank. And they have good legal reason to do that because when a trust sues it does so through its trustee. So they name the Plaintiff in the foreclosure as “US Bank as trustee for the XYZ Trust series 2006” or the more remote designation “US Bank on behalf of the certificate holders of the XYZ Trust series 2006.”

Then in the body of the complaint in a judicial foreclosure they say that “The Plaintiff is a national association” or they leave out any description of the Plaintiff which makes the complaint legally insufficient.

In nonjudicial states homeowners are required to sue the entity against whom they are seeking relief. Hence lawyers and pro se litigants are forced to name whoever was named as beneficiary when the first foreclosure document was recorded — usually a notice of substitution of trustee.

It may be true that such homeowners ought to also name US Bank in its individual capacity because in virtually all cases it can be alleged that after diligent search and inquiry, the Petitioner for the TRO cannot find any evidence that the trust exists and even if it did any evidence that the subject loan was entrusted to the named trustee by a settlor who paid for the debt.

And finally when they submit proposed orders they might include that same phrase as the first paragraph of the court order thus creating a virtually irrebuttable presumption of a fact that is simply not true and completely inconsistent with the allegations or implied allegations against the homeowner. If the court’s order or judgement says that “Plaintiff is a national association” it is actually conferring status of a bank to the trust.

This sleight of hand is evident in multiple instances where a REMIC trust is alleged to be “involved.”


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So here is my reply in a situation where the judge was tricked into granting summary judgment even after the court had  ordered the Plaintiff to produce documents showing that the Plaintiff had paid for the debt.

One of the things that jumped out at me and looking at their proposed order is the first paragraph in which they say that plaintiff is a National Association. This is an obvious ruse. The complaint says that US Bank is appearing in a representative capacity for the plaintiff trust. It is the trust that is the plaintiff. The trust is not a National Association.
This is straight out of the Playbook that is used by attorneys for the banks. A trust cannot appear in court except through the trustee for the trust. But the trustee is not the plaintiff. The plaintiff is named as trust. So if the court were to sign the proposed order it would be giving judgment to US Bank instead of the trust. It was the trust who sued for foreclosure.
of course we know why they are doing this. They have rented the name of US Bank for the purpose of making it look like the Creditor is an institution when it is merely a trust. They’ve also used the name of US Bank in order to be able to point to an entity that has legal existence. It is doubtful that the trust has any legal existence, but even if it did, your loan was never entrusted to US Bank as trustee by a trustor or settlor who had paid value for the debt.
The other thing I wanted to mention is that in reviewing your Discovery request you ask for information concerning the purchase of the note. I think that is probably sufficient and covers the situation, but you should be aware and you should be prepared to argue that what you are really asking is whether they paid for the debt.
It is possible to purchase the note without purchasing the debt. This happens when the party who advanced funds for the funding of the loan is different from the payee designated on the promissory note that was executed by the maker or borrow. Such a purchase of the note if in good faith and without knowledge of the borrowers defenses, establishes an independent liability in addition to liability for the debt. Such a purchaser is called a holder in due course. With certain exceptions a holder in due course can recover on the Note even though the borrower has defenses. The HDC does not have to answer those defenses. The claim shifts to whoever the defenses are actually aimed at.
While the banks never allege that they are a holder in due course because they know that the plaintiff has never paid for the debt, they often seek treatment as though they were a holder in due course and many courts do exactly that.
By focusing on the promissory note, you are focusing the Court’s attention on Article 3 of The Uniform Commercial Code instead of Article 9. Under Article 3 there are numerous instances in which a promissory note can be negotiated. sold and enforced by parties who do not own the debt. In such instances it is generally presumed that the possession of the promissory note was delivered along with rights to enforce it on behalf of the owner of the debt. It is in effect treated as though it were the title to the debt. This is the law and it is not subject to philosophical discussion as to whether or not it should be the law.
If you are challenged on your statement regarding the presumption, which you did not describe in your motion, and the rebuttal of the presumption, you should keep this in mind and perhaps consider filing a supplemental memorandum.
There is also the question of whether they actually have possession of the original note. Everybody alleges that they have it but very few actually have the original note as it was signed by the borrower. In most cases the original note has been destroyed and they have recreated the note using advanced technology based on an image of the note. Once again the presumption is in favor of the banks in that claiming possession of the original note raises the presumption that they actually have it. It is up to the homeowner to rebut that presumption.
While denial of the facts is a necessary first step, many lawyers and pro se litigants make the mistake of thinking that is all they need to do. In addition to denial which is necessary to put the issue in dispute, you must also prove that the presumed facts are untrue or raise an inference that the presumed facts are not true. In your case you have done the latter. And that is the point that you need to hammer on. The granting of the motion for summary judgment was error because a condition precedent to the foreclosure was rebutted by the inference to which you are entitled because they refuse to answer questions about payment for the note which in turn means payment for the debt.

If the court signs the proposed order it will be granting foreclosure to a party that does not own the debt. That means that the attorneys representing the plaintiff will have succeeded and creating Revenue by weaponizing the foreclosure process. It will also be changing the identity of the plaintiff from being a trust to being a bank. The trust is not a bank.


One Response

  1. This is informative Neil. It is a big problem. A “Trust” is a not a legal entity.

    Let’s just say a borrower has an action for damages — who is going to pay those damages? The trustee on behalf of the trust? The trust itself (no contact information for this– the trust is NOT a legal entity)? The servicer? The servicer should have no legal authority to act on behalf of the trustee to the trust – unless the trustee gives authority. Fact is – the trustee is nowhere to be found – despite their name in front of the trust name. .

    When any party says the “Trust” is the beneficiary – that is wrong. The only beneficiaries were security investors who were entitled to pass-through of (current) cash flows. Security investors cannot sue borrowers — they are also not legal entities.

    These trusts have been torn apart, and all that remains is a derivative contract which is not real as it was derived from securitization that was not valid. Derivatives are contracts – not securities. There is no trustee involved in derivative contracts. Servicer is concealing the true party by naming a trust with the trustee name in front of it.

    How they are getting away with it is beyond me. I have the situation where both are involved — the “bank”, and the “Trustee to the Trust.” I notice cases where they now come in with “Not in it’s individual capacity but solely in capacity as trustee to the trust.” That is impossible!!!. Trustee is a division of the bank. They are NOT separate entities.

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