In observance of the Jewish holiday of Yom Kippur, my office will be closed Wednesday, September 23. The following article was scheduled in advance:
READ THE ENTIRE BRIEF SLOWLY AND STUDY IT.
I think we have another case here where the pen of Justice Scalia (if they grant the writ and hear the case) will be dripping with sarcasm , just like we saw in Jesinoski. The New York Law says that the “transfer” to the REMIC Trust is void if it violates the terms of the Pooling and Servicing Agreement. The problem for the banks is that they MUST rely on the PSA in order to give standing to their trustee and servicer. If the trust does not have the loan, then the trustee has no authority over the loan and neither does the servicer. SO the Banks are trying to use the PSA and then Bar the borrower from inquiring as to its terms and provisions.
This isn’t an academic exercise. The Trusts are now known to have existed only on paper and not even registered in any state or anywhere else. They never had a bank account, they never received the money from the offering and sale of the trust’s certificates, they never had any money, they never had any liabilities, they never had any assets, and they they were never operated as a business in any sense of the word. Thus the Trust COULD NOT have acquired the loans because it never had the money to do so. And the paper transfers to the trust, all of which occurred in reality far beyond the date of the cutoff period would be void and mean nothing.
This is not a problem caused by the borrowers. It is a problem intentionally created by the banks so that behind curtains they could take or steal the money of investors, covering their tracks by making it appear that there was a transaction when there was none. The fundamental question presented to the courts is whether we are going to allow nonexistent parties to exercise rights in court with respect to nonexistent transactions.
The courts, once again, read into a perfectly clear and unambiguous statute and converted the word “void” to “voidable.” This is an impermissible “interpretation” of statute because it changes the law rather than clarifying it.
I recommend the brief because it appears to be complete, and it is the best (better than mine) brief on the subject of why the trusts do not have “prudential standing” which is a jurisdictional threshold question. It is clear to me that an entity created only on paper and never used for business activity, except for the purpose of foreclosure on a loan it does not own, is not an entity that should be given any right to appear in court.
One thing is clear: this brief should be used by all attorneys drafting memorandums of law on the subject of “Borrowers cannot invoke the provisions of the PSA because they are not third party beneficiaries.” If they were not third party beneficiaries then what assurance would the borrowers or the investors have that the certificate holders would receive the money promised to them? What assurance would the borrower have that a manufactured default would be declared despite the fact that the real creditors have been paid, or that a manufactured default would arise simply because the servicer and trustee refused to pay the creditors?