For further information please call 954-495-9867 or 520-405-1688
The short answer is YES. If a party initiates foreclosure proceedings based upon ownership of the loan, note and mortgage by a REMIC Trust, that ownership is based upon the express provisions of a trust instrument. And that trust instrument is the Pooling and Servicing Agreement (PSA). If that instrument is created under the laws of the State of New York, New York law expressly states that anything that violates the trust provisions is void.
So if US Bank, for example, says it brings the foreclosure by virtue of US Bank being the Trustee for a named Trust, then right there is an item for discovery —- is US bank really the trustee? Does the trust own the loan? If the answer is no, then there should be no foreclosure. Nothing could be more relevant.
So the theory that the borrower owes the money to SOMEONE, is not a very good precedent. It leaves the door open for anyone to demand payment on an account owned by someone else. Normal application of law would say that if the borrower paid the wrong party, then the debt is still owed. And if the borrower wants to use his wrongful payment to the wrong party, then he must show authority or apparent authority of the third party who wrongfully collected his payment — in which case the collection was not really wrongful.
Thus the rulings from the bench that the borrower has no right to challenge the assignment or the foreclosure on the basis of a violation of the enabling documents (PSA and Prospectus) are wrong. And just as I said regarding rescission, eventually there will be appellate decisions that overturn all the erroneous orders entered in connection with the the use of the PSA, relied upon by the foreclosing party, which essentially allow one party (allegedly for the benefit of the Trust) to use the PSA to their advantage establishing the right of the Trustee and the ownership of the debt, and then disallowing any inquiry or challenge into those assertions.
Add to this that the no Trust representative shows up at trial, ordinarily, and you have the reality revealed. These foreclosures are in actuality for the benefit of intermediaries and not for the benefit of the Trust or the holders of Trust certificates.
This is brilliantly argued in a brief drafted by Richard L Antognini, dated 11/18/14. Read it in full using the link above. If you still have doubts as to whether the borrower can use the PSA against the forecloser, then you are operating under the wrong legal presumptions.