1. It isn’t illegal or prejudicial to a plaintiff trustee’s case for it to have acquired rights or be assigned a mortgage AFTER a borrower is in default — but it DOES raise issues of fact that must be heard by the Court. Since the Mortgage went into default there are several possibilities:
(a) under the pooling and service agreement the original lender might be the responsible party and unless that original lender is STILL in privity with the CURRENT (was there a substitution?) trustee, the trustee might not be getting instructions from the real beneficiary.
(b) under the assignment(s) the real beneficiary might have changed as well.
(c) Remember that there are at least three Trustees in securitization — the Trustee on the Deed of Trust, the Trustee of the Pooled Assets, and the Trustee for the owners of certificates of mortgage backed securities. There are also substitutions of Trustees at all levels. Each of these Trustees, in order to have any relevance to the case must have the acquired legal enforceable rights. The acquisition of legal enforceable rights is ONLY through a document of transfer that identifies the Grantor as the party who has the power to appoint the Trustee and his/her/its powers. So the mere existence of a “Trustee” cannot be established by an allegation or declaration from the Trustee. For example, the Trustee for the owners of certificates of Mortgage Backed Securities is usually limited in his/its responsibilities to litigate. The usual provision in the certificate is that the Trustee for the holder of asset backed securities series 2007-A etc. is that the owners must agree to the litigation and agree to pay for it. Otherwise the Trustee is stuck with paying for it.
(d) Just because someone calls themselves a Trustee doesn’t mean they are a Trustee with any relevance to your transaction. In fact, they might not be a Trustee at all if there is no “Trust Instrument.” And if they are a Trustee, odds are the beneficiaries under the Deed of Trust are (1) not the originating lender, (2) not the mortgage wholesaler/aggregator and (3) probably not the owners of the securities that were issued. In the evisceration of the security instrument by playing fast and loose with the assignments, proceeds of notes, over collateralization, cross collateralization, insurance, credit default swaps guarantees and federal bailouts, the relationship of the Trustee to the actual mortgage transaction appears to have been cut or at least reduced to a gossamer thread with powers so limited, that they can only be exercised if the Trustee proves a proper foundation of his/her/its actions — i.e., by the inclusion of necessary and indispensable parties.
2. after the world is put on notice through a defendant’s recorded lien filed against subject property BEFORE a mortgage on same was securitized, claiming that there has been fraud in the inducement, a forgery, unclean hands, etc. what does that do to a party claiming to be a ‘holder’, or a ‘holder in due course’ — this produces a requirement that any party intending to foreclose must remove that cloud on title before proceeding. If you succeed in getting something like that recorded, you have succeded on putting the burden on the “lender” to file judicially and make actual allegations in a foreclosure lawsuit that they have to prove before the burden shifts to you. This they usually cannot do and the case is very often dropped.
Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, politics, securities fraud | Tagged: borrower, Chapter 13, disclosure, Federal reserve, foreclosure defense, foreclosure offense, Lender Liability, rescission, securitization, trustee |