Fla 4th DCA Judgment for Borrower — Only Original Allonge Can Be Used

Glitch in the fabrication and forgery of documents left counsel for the “trust” without an original allonge. They tried to use a copy. What is surprising is that they appealed.

US Bank v Kachik Case 4D16-1776

Get a consult and Chain of Title Analysis! 202-838-6345
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-
 *
In Florida and most states following judicial foreclosure rules, the alleged foreclosing party must submit the original note to the court. An allonge is an instrument that is basically used to add additional room onto the note for endorsements. It is NOT an amendment to the note. The original allonge is required by law — in all 50 states — to be permanently affixed to the original note. Thus submission of the “original” note alone is not sufficient if you are relying upon the allonge to show authority to enforce (PETE: person entitled to enforce).
 *
The Plaintiff “trust”  was ostensibly in court with capacity to sue because it was impliedly represented by an entity claiming to be the “trustee.” Because the original “allonge” containing the endorsement was not present in evidence there was no capacity to sue (standing). The only thing the court had was the original note payable to someone else.
 *
This is a blow to banks and servicers who rely almost exclusively on fabricated “originals” and “copies of originals.”
 *
Of course the rest of the story is even more interesting. The banks and servicers have lawyers that concoct these foreclosure schemes. What is clear is that when the trial ends (and many times before it even begins) there is sc ant evidence to show the existeince of the trust. All attention is directed at US Bank but US Bank is not the Plaintiff. The Plaintiff is the Trust purportedly represented by the Trustee, US Bank.
 *
There are at least two levels on which there is a basciabsence of the capacity to sue in foreclosure. One of course is that if the Plaintiff produces a “Trust Instrument” — i.e., the Pooling and Servicing Agreement, it is frequently incomplete, so there is no evidence that the trust even exists.
 *
The second issue is one in which everyone seems confused including trial and appellate courts. If the subject loan was not purchased by the party named as Plaintiff Trust (or if the Trustor did not transfer the ownership of the debt, note and mortgage to the Trust), then it follows that the subject loan is not “in trust.”
 *
If the “loan” is not “in trust” then it doesn’t make any difference whether the trust exists or not. The only exception to that pronouncement is that if lawyers come to court purportedly representing a trust that (a) does not exist or (b) doesn’t own the loan, then they are knowingly misleading the court. Lawyers are required to perform due diligence sufficient to believe that they are filing a real claim.  I’ll leave that issue to the local bar associations.
 *
The way in which the lawyers for the financial industry are addressing this issue is by presuming ignorance of the court and foreclosure defense counsel. The so-called assignment of mortgage or endrosement of the note naming the trust as the “owner” is NOT a transfer by the Trustor (i.e., the party who created the trust).
 *
The Trustor is the ONLY party who can transfer something to a Trustee to hold in trust subject to the terms of the trust instrument. And THAT can only happen when the Trustee agrees to hold the “property” in trust pursuant to the the terms of the trust instrument. Hence the ONLY time there can be an addition to the alleged Trust without consideration is if the Trustor makes the Transfer.
 *
Transfers by third parties purportedly intot he Trust can only be valid changes in wonership of the debt, note and mortgage if the Trust, using the assets of the Trustor, makes a purchase or transaction that is (a) authroized by the trust instrument and (b) for value.
 *
The “transfer” of a defaulted obligation from a third party allegedly to the Trust fails on many levels. The REMIC trust rules prohibit activity after the cutoff period and prohibit acquisition of loans that do not meet the criteria set for the acquisition of loans by the Trustor in the Trust instrument.
 *
There is no reasonable or even rational basis upon which the Trustee would pay par value of a loan when it is obviously worth less than par. Nor would a trustee accept such a loan that conflicts with teh prime directive of the Trustor in the Trust Instrument — the acquisition of properly underwritten performing loans.
 *
Hence recent court doctrine presuming the right or ability to “ratify” nonconforming actions by the Trust or trustee are simply fictions representing the only path by which the courts can continue to “facilitate” the completion of foreclosures.
 *
Such decisions and opinions essentially rubber stamp litigating the rights  and interests of the trust beneficiaries when they are (a) not in court and (b) have no notice of the court proceedings. The decision of foreclosures sticks them with loans they don’t want and against which they relied upon the PSA to protect them.
 *
Ratification by the Trustee or the trust beneficiaries would have the immediate effect of destroying the favorable tax treatement to beneficiaries under the REMIC rules in the Internal Revenue Code.
 *
Ratification would have the immediate effect of reducing the value of the assets of the Trust — because the Trust according to the allegations of the lawyers (who in actuality don’t appear to represent the Trust) in all cases, there was a transaction in which the Trust “acquired” or “purchased” the loan — which is a legal requirement for enforcement of mortgage. Hence the Trust would be purchasing a nonconforming loan that is nonperforming, in litigation, and likely to lead to a substantial loss to the Trust and hecen the benficiaries.
 *
The inescapable conclusion is that the Trusts (a) probably don’t exist (b) don’t have any assets or money entrusted to the Trustee in the name of that Trust and (c) has no basis upon which to ratify transactions that could ONLY benefit third parties.

 

5 Responses

  1. Assume the sham trusts were “valid” – which they were not. Then, First, the Mortgage Loan Purchase Agreements (MLPA) were only an “intent” to sell loans – to the trustee, on behalf of security investors. Only cash pass-through was intended to be sold, as REMICs were structured for cash pass through only – thus, mortgage (instrument) was not intended to be sold. Second, even if a note is shown as intending to be sold to a trustee to a trust (a trust cannot stand alone), this does not mean the loan stayed there. Given that the MLPA was only an “intent” to sell, a final MLPA was required to done, within a year, and presented to security underwriters (actual purchasers of the loans), for final determination. This allowed loans to be removed and sold elsewhere right from the beginning. Early payment defaults did not occur in the way the government presented to the public. Third, is derivatives, which no court has addressed. Once a loan is reported as in default to a trusts, by known, or unknown (to borrower), early payment reported default, (these were never servicer advanced) the loan is “swapped” out of the trust by the trustee, via a derivative default swap contract (servicer advances – if they occurred is only for a short time) . This derivative is a contract, not a security, and the trustee no longer is the “legal” owner, or acts in any capacity. The trustee no longer has anything to to with the loan once it is swapped out. However, the servicer, in secret, continues to act for the contract default swap holder –
    until foreclosure is completed. Such reported default can occur at anytime, not just by early payment reported default. None of this will be disclosed to the borrower – until the default is presented by foreclosure action, which at that point – the loan is long removed by derivative contract. By the time a foreclosure action occurs, the loan has long been removed from the trust/trustee (if it ever went there to begin with), and the new “creditor” remains undisclosed to borrower by concealment by the servicer.. The servicer will claim that the current creditor is the trust, but this is false, as the collection rights have long been removed by derivative contract (note – it was only collection rights that were alleged to have been “intended” to be sold to the “shell” trustee/trust to begin with).

    I would like to see someone address derivatives. Derivative problem is not just with mortgages, but with all debt — credit card, student loans, auto – etc. All the problems with the fake assignments, note, allonges, etc., is to cover up what was falsely conveyed to begin with, and to avoid derivative contracts disclosure as concealed by the servicer.

    Believe it was George W. Bush who said – “Damn those derivatives.” Or was it my state AG who said the same thing to me? ,

  2. 4th DCA is a big money area of SE Florida … This is great news.

  3. Yeah, what you said.

    Even IF an Originator could transfer directly to the trust, the trust must explicitly accept physical delivery and declare acceptance into the trust via the trust agreement (after closing date, would require legal opinion and voting by certificate holders, imo) and via the agreements’ forms for certification (or not) and delivery into custodial vault by transmittal receipts.

    IMO, this would never happen even if tried. It wouldn’t make sense to void the REMIC tax status of the trust over a single loan file in default.
    Defies gravity.

    But, the one thing everyone does need to remember, including the judges, is that the ‘person’ in court is a trustee, not a bank.

  4. We have the same Allonge issue with US Bank. Can we bring a new case citing the Allonge deficiency in state court since we got royally shafted in our federal case?

    Inquiring minds need want to know? Thanks!

  5. Our mortgage was foreclosed when a suit to enjoin foreclosure is not dismissed. Is the foreclosure void? Kindly advise.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: