How you can make the system work against the banks in foreclosure cases.

Among the people who litigate Foreclosure cases on a regular basis, it is well known that the alleged “trustee” of the implied trust possesses neither knowledge nor control over the foreclosure proceeding. In addition, neither of the “trustee” nor the implied trust is intended to receive the proceeds of the liquidation of the homestead property.

Recently a homeowner and her attorney contacted me regarding the viability of using a specific statute under the laws of the state of Florida. The statute specifically states who can sign and who cannot sign anything on behalf of the trustee or the trust.

One thing is totally clear, the statute excludes any company that is self-proclaimed as an agent, servicer, or even Lawyer for the trust. The entire point of a trust is the appointment of a trustee known to the trustor or settler to be a trustworthy person to take charge of specific property and manage it on behalf of the beneficiaries named by the trustor or settler.

While I have addressed this issue obliquely, the attorney, in this case, filed a specific motion to dismiss the entire action and a motion for summary judgment. It was a short motion that merely stated that lawyers representing the Foreclosure Mail failed to comply with the required acknowledgment and certification by the alleged plaintiff in a Florida judicial foreclosure action.

This produced an anomalous result. Normally the Foreclosure Mail is instructed to litigate to the very end regardless of the weakness of their position. The logic behind this instruction is that most homeowners will give up because of time, money or expense. The idea is to win by attrition.

I cannot give you the details of the case in question, but I can give you the result. The foreclosure miil dismissed the entire foreclosure action along with the list pendens that clouded title.

Now the problem for the Foreclosure Mill is that they don’t represent the named trustee or the named trust. And there are contracted ministration agreements that prevent the named trustee and the name trust from actually getting involved in a foreclosure action — particularly when neither of the named trustee nor the named trust or implied trust will ever see one penny of money collected from the proceeds of the forced sale of the subject property.

This is reminiscent of the early stages of foreclosure litigation starting back in the early 2000s. The Foreclosure Mills simply walked away, leaving the homeowner and the court completely in the dark. In some cases the Foreclosure mail, or a different Foreclosure mill, came back with a new initiation of foreclosure process hoping to wear down the homeowner and the attorney for the homeowner.

But in the vast majority of the foreclosures that were dismissed or vacated, the homeowner was left with clouded title or the threat of a cloud on title. But in the meanwhile, they were not required to make any mortgage payments. Some of those homeowners lost their property anyway because they failed to make payments on property taxes.

The essential takeaway from this story is that this strategy employed by this attorney in Fort Myers Florida ended up shining an extremely bright light on a fake Foreclosure. Most homeowners and their attorneys make the key mistake of admitting or accepting the named “trustee” and the named trust as being real parties in interest who had authorized the Foreclosure Mill to proceed with legal action to force the sale of the homestead property.

The mistake is compounded by the assumption that when the homeowner loses the case, the proceeds from the sale of the subject property are paid to either the trustee or the trust. This results in the absence of any investigation or research into what happens after the judgment is entered. As Charles Koppa has repeatedly suggested, the activity after judgment or after-sale reveals the true nature of both the transaction and the alleged foreclosure proceeding — a process conducted for profit instead of restitution for an unpaid debt.

Of course it is possible that the investment banks want to direct us or distract us into this type of conversation which appears more philosophical than based in real world events or established law and procedure. But I can tell you as a point of fact that the real problem that the banks do not ever want to see debated or discussed is how much money they still owe homeowners, instead of the mythological underlying obligation for a transaction that is still only partially completed.

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Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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5 Responses

  1. Summer, not “defending the Wall Street fraud”, just defending the facts!

  2. Legisman obviously too zealous defending Wall Street Fraud

    Here is Michigan Statute of Powers of Trustee. The Mill expects that everyone’s attention will be all turned to Servicers, not Trustees.

    But according to the Play, Trustees are the ones who are responsible for receipt and distribution of all money to Investors.

    Not Servicers who pretend they merely “collect” and give them to Trustee.

    In other words, when a Servicer presents a nice freshly printed Note from Black Knight’s database – the holder of this Note suppose to be a TRUST under control of Trustee who does it for the benefit of INVESTORS.

    And none of them – Trustee or Investors – never appear in any cases.

    700.7817 Specific powers of trustee.
    Sec. 7817.

    Without limiting the authority conferred by section 7816, a trustee has all of the following powers:
    (a) To take possession, custody, or control of property transferred to the trust and accept or reject additions to the trust.
    (b) To retain property that the trustee receives, including property in which the trustee is personally interested, in accordance with the Michigan prudent investor rule.
    (c) To receive property from a fiduciary or another source that is acceptable to the trustee.
    (d) To perform, compromise, or refuse to perform a contract of the settlor that is an obligation of the trust, as the trustee may determine under the circumstances. In performing an enforceable contract by the settlor to convey or lease land, if the contract for a conveyance requires the giving of a warranty, the deed or other instrument of conveyance to be given by the trustee shall contain the warranty required. The warranty is binding on the trust as though made by the settlor, but does not bind the trustee except in the trustee’s fiduciary capacity. The trustee, among other possible courses of action, may do either of the following:
    (i) Execute and deliver a deed of conveyance for cash payment of money remaining due or the purchaser’s note for the money remaining due secured by a mortgage on the land.
    (ii) Deliver a deed in escrow with directions that the proceeds, when paid in accordance with the escrow agreement, be paid to the trustee, as designated in the escrow agreement.
    (e) To satisfy a settlor’s written charitable pledge irrespective of whether the pledge constitutes a binding obligation of the settlor or was properly presented as a claim, if in the trustee’s judgment the settlor would have wanted the pledge completed under the circumstances.
    (f) To deposit trust property in a financial institution, including a financial institution operated by or affiliated with the trustee and to invest and reinvest trust property as would a prudent investor acting in accordance with the Michigan prudent investor rule and to deposit securities with a depositary or other financial institution.
    (g) To acquire property, including property in this or another state or country, in any manner for cash or on credit, at public or private sale; and to manage, develop, improve, exchange, partition, or change the character of trust property.
    (h) To make an ordinary or extraordinary repair or alteration in a building or another structure, to demolish an improvement, or to raze an existing or erect a new party wall or building.
    (i) To subdivide, develop, or dedicate land to public use; to make or obtain the vacation of a plat or adjust a boundary; to adjust a difference in valuation on exchange or partition by giving or receiving consideration; or to dedicate an easement to public use without consideration.
    (j) To enter for any purpose into a lease as lessor or lessee, with or without an option to purchase or renew, for a period within or extending beyond the duration of the trust.
    (k) To enter into a lease or arrangement for exploration and removal of minerals or another natural resource or to enter into a pooling or unitization agreement for a period within or extending beyond the duration of the trust.
    (l) To abandon or decline to administer property if, in the trustee’s opinion, the property is valueless, or is so encumbered or in such a condition that it is of no benefit to the trust.
    (m) To vote a stock or other security in person, by general or limited proxy, or in another manner provided by law, or enter into or continue a voting trust agreement.
    (n) To pay a call, assessment, or other amount chargeable or accruing against or on account of a security, and sell or exercise stock subscription or conversion rights.
    (o) To hold property in the name of a nominee or in another form without disclosure of the interest of the trust. However, the trustee is liable for an act of the nominee in connection with the property so held.
    (p) To insure the trust property against damage, loss, or liability and to insure the trustee, the trustee’s agents, and the trust beneficiaries against liability arising from the administration of the trust.
    (q) To borrow property, with or without security, for any purpose from the trustee or others and to mortgage or pledge trust property for a period within or extending beyond the duration of the trust.
    (r) To effect a fair and reasonable compromise with a debtor or obligor, or extend, renew, or in any manner modify the terms of an obligation owing to the trust. If the trustee holds a mortgage, pledge, or another lien on property of another person, the trustee may, instead of foreclosure, accept a conveyance or transfer of encumbered property from the property’s owner in satisfaction of the indebtedness secured by a lien.
    (s) To pay a tax, an assessment, the trustee’s compensation, or another expense incident to the administration of the trust.
    (t) To sell or exercise a subscription or conversion right or to consent, directly or through a committee or another agent, to the reorganization, consolidation, merger, dissolution, or liquidation of a business enterprise.
    (u) To allocate an item of income or expense to either trust income or principal, as permitted or provided by law.
    (v) To employ, and pay reasonable compensation for services performed by, a person, including an auditor, investment advisor, accountant, appraiser, broker, custodian, rental agent, realtor, or agent, even if the person is associated with the trustee, for the purpose of advising or assisting the trustee in the performance of an administrative duty; to act without independent investigation upon such a person’s recommendation; and, instead of acting personally, to employ 1 or more agents to perform an act of administration, whether or not discretionary.
    (w) To employ an attorney to perform necessary legal services or to advise or assist the trustee in the performance of the trustee’s administrative duties, even if the attorney is associated with the trustee, and to act without independent investigation upon the attorney’s recommendation. An attorney employed under this subdivision shall receive reasonable compensation for his or her employment.
    (x) To prosecute, defend, arbitrate, settle, release, compromise, or agree to indemnify an action, claim, or proceeding in any jurisdiction or under an alternative dispute resolution procedure. The trustee may act under this subdivision for the trustee’s protection in the performance of the trustee’s duties.
    (y) To sell, exchange, partition, or otherwise dispose of, or grant an option with respect to, trust property for any purpose upon any terms or conditions for a period within or extending beyond the duration of the trust.
    (z) To continue or participate in a business or enterprise in any manner, in any form, and for any length of time.
    (aa) To change the form, in any manner, of a business or enterprise in which the settlor was engaged at the time of death.
    (bb) To provide for exoneration of the trustee from personal liability in a contract entered into on behalf of the trust.
    (cc) To respond to environmental concerns and hazards affecting trust property as provided in section 7818.
    (dd) To collect, pay, contest, settle, release, agree to indemnify against, compromise, or abandon a claim of or against the trust, including a claim against the trust by the trustee.
    (ee) To respond to a tax matter as provided in section 7819.
    (ff) To make a payment of money, or other property instead of money, to or for a minor or incapacitated trust beneficiary as provided in section 7820.
    (gg) To make a distribution or division of trust property in cash or in kind, or both; to allot a different kind or disproportionate portion of, or an undivided interest in, trust property among beneficiaries and determine the value of allotted trust property; or to distribute an unclaimed share in the same manner as described in section 3916.
    (hh) To transfer the property of a trust to another jurisdiction and appoint, compensate, or remove a successor trustee, individual or corporate, for trust property in another jurisdiction, with any trust powers set out in this part that the trustee delegates to the successor trustee.
    (ii) To execute and deliver an instrument that accomplishes or facilitates the exercise of a power vested in the trustee.
    (jj) To select a mode of payment under any employee benefit or retirement plan, annuity, or life insurance payable to the trustee, exercise rights thereunder, including exercise of the right to indemnification for expenses and against liabilities, and take appropriate action to collect the proceeds.
    (kk) To make loans out of trust property, including loans to a trust beneficiary on terms and conditions the trustee considers to be fair and reasonable under the circumstances. The trustee has a lien on future distributions for repayment of loans made under this subdivision.
    (ll) To pledge trust property to guarantee loans made by others to the trust beneficiary.
    (mm) To resolve a dispute concerning the interpretation of the trust or its administration by mediation, arbitration, or other procedure for alternative dispute resolution.
    (nn) On termination of the trust, to exercise the powers appropriate to wind up the administration of the trust and distribute the trust property to the persons entitled to it.

  3. ANON, Garfield is totally wrong, and your statement “Holding a note is not enough – you need authority.” Is factually and legally incorrect. See the UCC, more specifically UCC § 3-203(b) https://www.law.cornell.edu/ucc/3/3-203

    And hundreds of court cases. Please spare the nonsense holdings in court cases are wrong; those holdins are the law!

    RIGGS V. AURORA LOAN SERVICES, LLC, 36 So. 3d 932, 933-34 (Fla. Dist. Ct. App. Dist. 2010) (loan servicing company’s possession of an original note, indorsed in blank, was sufficient to establish that it was the lawful holder of the note, entitled to enforce its terms); U.S. BANK, N.A. V. KNIGHT, 90 So. 3d 824 (Fla. 4th DCA 2012) (“to have standing, an owner or HOLDER of a note, indorsed in blank, need only show that he possessed the note at the institution of a foreclosure suit; the mortgage necessarily and equitable follows the note.”); CITIMORTGAGE, INC. V. LONCAR, 7th Dist. Mahoning No. 11 MA 174, 2013-Ohio-2959, ¶17 (“in a foreclosure action, the holder of the note, regardless of whether it has been assigned the mortgage, has standing not only because it is the party entitled to enforce the instrument, but because it also has an equitable interest in the mortgage”); CITIMORTGAGE, INC. V. PATTERSON, 8th Dist. Cuyahoga No. 98360, 2012-Ohio-5894, ¶21 (holder of the note has standing to foreclose). Thus, appellee acquired an equitable interest in the mortgage when it became a holder of the note, “regardless of whether the mortgage [was] actually (or validly) assigned or delivered”.); DEUTSCHE BANK NAT’L TRUST CO. V. LIPPI, 78 So. 3d 81, 85 (Fla. 5th DCA 2012) (“[I]ts standing is established because it is the note holder, regardless of any recorded assignments.”); DEUTSCHE BANK NATIONAL TRUST CO. V. VALERIE J. SLOTKE (Wash. Ct. App. 2016) (“it is the holder of a note who is entitled to enforce it. It is not necessary for the holder to establish that it is also the owner of the note secured by the deed of trust.); MCLEAN V. JP MORGAN CHASE BANK N.A., 79 So. 3d 170, 172–73 (Fla. Dist. Ct. App. 2012) (holding that standing may be established by any of the following: (a) a mortgage assignment or equitable transfer prior to the filing of the complaint; (b) plaintiff’s status as a HOLDER; (c) a special endorsement in favor of plaintiff or a blank endorsement; (d) an assignment from the payee to the plaintiff or an affidavit of ownership to prove plaintiff’s status as a HOLDER of the note; (e) mere delivery of a note and mortgage, with intent to pass title; or (f) filing the original note with a special endorsement in favor of plaintiff).

  4. The banks never rebutt your posts.

  5. This is all correct Neil. I have been saying for a long while — challenge the representation and authority in court as to “trustee”. You will get some judges who refuse to even look at. These judges simply accept whatever they are told. It is fairly easy to challenge representation of the “trustee” if the judge allows. Then the “servicers” goal (who is the one actually represented in courts) is to state they work directly for the “investors trust” because they know the trustee granted no authority. Really? Who hired them from the investors trust? All of this breaks down authority to hold the “note.” Holding a note is not enough – you need authority.
    And, if one is paying, where do you think your money is going? Loan mod? Where does your money go? Who made the decision to grant you (or not) a loan mod? You do not know. Do you think the “servicer” is sending your money to the trustee distribution account to distribute to security investors in PLMBS crisis trusts that have been broken down in structure and, in effect, dissolved? result is permanent clouded title which may affect the marketability of the property.
    Bottom line — where does the money go? And, what by fraudulent means does it get there?

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