Deutsch Bank National Trust Company Was Crushed in Texas in 2015. Why isn’t anyone listening?

When a judge looks carefully at the record, the bank loses. The use of Deutsch’s name in the style of the case still shows that Judges are considering the Plaintiff to be the named “Trustee” instead of the named (or named, which is frequently the case) Trust. In fact the Trustee has nothing to do with foreclosures. In this case the Judge wrote the following:

“Judgment (for the homeowner for declaratory relief) was based on findings and conclusions that Deutsche Bank had failed to prove chain of title back to the original lender, now defunct. The sole proof on which the bank relied — a purported assignment from “MERS as nominee for the lender, its successors and assigns” — was held void, because the assignor did not exist when the document was signed.

“Deutsche Bank’s first argument is based on a misrepresentation of the trial record. [i.e. the lawyers were lying to the court about what was in the trial record].

“The Burkes argued that the stamp block containing the Cathy Powers signature was not a part of the Note as originally executed, and instead offered a copy of the unindorsed Note as one of their own exhibits,

“This absence of documentary proof mirrors the lack of any testimonial evidence of holder status. Given its utter failure of proof, Deutsche Bank’s continuing assertion of a right to foreclose as holder of the Note is not just groundless, it is frivolous. On this trial record the current holder of the Burke Note remains a mystery.

“Deutsche Bank introduced no proof whatever of a prior transaction by which it acquired any rights in the Note. Absent such proof, L’Amoreaux is not controlling. Here MERS was acting on behalf of a defunct entity (IndyMac Bank), and its purported assignment was therefore void and invalid under the Texas common law of assignments, as explained below.

“There is simply no proof of an existing assignor with an existing right in the property capable of being assigned in 2011. It is undisputed that Indy-Mac Bank had been “dead” since 2008, several years prior to the 2011 assignment. (P. Ex. 6, at p. 1). Thus, any post-mortem transaction by that entity would be a nullity under Pool v. Sneed.

“In sum, L’Amoreaux does not undermine this court’s judgment in favor of the Burkes because (1) there is no record evidence of a prior assignment of the lender’s interest in the Note or Deed of Trust, (2) there is no record evidence that any purported assignor existed at the time of the 2011 assignment; and (3) there is no record evidence of a principal/agency relationship between MERS and any “successor or assign” of the lender when the assignment was executed.

“Deutsche Bank’s third argument is a red herring

“a homeowner is allowed “to challenge the chain of assignments by which a party claims a right to foreclose….” Id. at 224. It is true that in Texas an obligor cannot defend against an assignee’s efforts to enforce the obligation on a ground that merely renders the assignment “voidable at the election of the assignor,” such as a fraudulent signature by an unauthorized corporate agent. Id. at 225. The problem here is not a voidable defect that a defrauded assignor might choose to disregard — it is the absence of a valid assignor (i.e. a real entity owning the right to be assigned) in the first place. Cf. L’Amoreaux v. Wells Fargo Bank, N.A., 755 F.3d 748, 750 (5th Cir.2014) (considering homeowner’s challenge to validity of MERS assignment on its merits, implicitly rejecting bank’s “voidable” argument).

“A court’s primary duty in construing a written contract is to ascertain the true intention of the parties as expressed in the language of the document itself. Coker v. Coker, 650 S.W.2d 391, 393 (Tex.1983). In this document, the name of the assignor, “Mortgage Electronic Registration Systems, Inc.” appears three (3) times — in the body of the assignment, above the signature line, and in the corporate acknowledgement. Each time, MERS’s name is immediately followed by the phrase “as nominee for” the lender, IndyMac Bank, its successor and assigns. P. Ex. 2. Nowhere does this document hint that MERS intended to convey its own rights,[8] or that it was acting as principal rather than as agent for other entities.

Words matter, especially in real estate transactions. See Univ. Sav. Ass’n v. Springwoods Shopping Ctr., 644 S.W.2d 705, 706 (Tex.1982) (“the terms set out in a deed of trust must be strictly followed”); see also Mathis v. DCR Mortg. III Sub I, L.L.C., 389 S.W.3d 494, 507 (Tex.App. — El Paso, 2012) (“The rules of interpretation that apply to contracts also apply to notes and deeds of trust.”). Based on the words of the 2011 assignment, MERS was no more acting on its own behalf than was the bank’s own law firm.

“Deutsche Bank asks to reopen the trial record to provide “the wet ink original of the Note or testimony affirming Deutsche Bank’s status as holder of the Note.” (Dkt. 90, at 7). No authority or excuse is offered for this breathtakingly late request. Even assuming such evidence exists, Deutsche Bank does not pretend that it is “newly discovered”, nor that the bank was excusably ignorant about it until after trial despite using due diligence to discover it. See 11 WRIGHT, MILLER & KANE, FEDERAL PRACTICE AND PROCEDURE § 2808 (2012). After four years of litigation, including court-ordered mediation and trial on the merits, the time for such a deus ex machina maneuver has long since passed. The Burkes are entitled to the finality of judgment that our judicial process is intended to provide. The bank’s request for a do-over is denied.

Let us help you prepare for trial: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Hat tip Bill Paatalo

see Deutsche Bank Nat’l Trust Co. v. Burke, 117 F. Supp. 3d 953 – Dist

 

Christiana Trust/Wilmington Savings Crash and Burn on Standing and More

Florida 4th DCA Opinion:

In this mortgage foreclosure case, the underlying mortgage was passed around like the flu, giving rise to a complexity of ownership that frustrated the appellee’s attempts to demonstrate standing at trial. To the answer brief, the appellee attached a chart of the ownership lineage of the mortgage and note, with different types of arrows pointing in all directions, a valiant effort which demonstrated that the transfer history here defies pictorial representation.

Let us help you prepare your narrative (blue print) for litigation: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

see J Gross 4th DCA Opinion Goshen Mortgage adv Supria 12-6-17

You can’t make this stuff up. Order to enter JUDGMENT for homeowner not merely dismissal.

On the original note, Centerpointe Financial, Inc. is the lender. There is no blank indorsement from Centerpointe. There was an allonge purporting to effect a transfer, but the allonge was lost and not produced at trial. Appellee conceded at trial that it was not a holder of the note, but contended that it qualified as a nonholder in possession with the rights of a holder.

“A nonholder in possession may prove its right to enforce the note through: (1) evidence of an effective transfer; (2) proof of purchase of the debt; or (3) evidence of a valid assignment.” Bank of N.Y. Mellon Tr. Co., N.A. v. Conley, 188 So. 3d 884, 885 (Fla. 4th DCA 2016). “A nonholder in possession must account for its possession of the instrument by proving the transaction (or series of transactions) through which it acquired the note.” Id. (citing Murray v. HSBC Bank USA, 157 So. 3d 355, 358 (Fla. 4th DCA 2015)).

Therefore, “[t]o prove standing as a nonholder in possession with the rights of a holder, the plaintiff must prove the chain of transfers starting with the first holder of the note.” PennyMac Corp. v. Frost, 214 So. 3d 686, 689 (Fla. 4th DCA 2017) (citing Murray, 157 So. 3d at 357-58). “Where the plaintiff ‘cannot prove that [a transferor] had any right to enforce the note, it cannot derive any right from [the transferor] and is not a nonholder in possession of the instrument with the rights of a holder to enforce.’” PennyMac, 214 So. 3d at 689 (quoting Murray, 157 So. 3d at 359).

Here, the first assignment of the note was invalid, because nothing in evidence demonstrated that the assignor had the authority to transfer or assign an interest in the note. Similarly, a second assignment was also invalid because nothing demonstrated that the assignor had an interest in the note that it could transfer. Among other problems, the third and fifth assignments transferred the mortgage, but not the note. The fourth assignment was infirm because of the problems with the earlier assignments.

One legal problem created by the third and fifth assignment is that a “mortgage follows the assignment of the promissory note, but an assignment of the mortgage without an assignment of the debt creates no right in the assignee.” Tilus v. Michai LLC, 161 So. 3d 1284, 1286 (Fla. 4th DCA 2015). “‘[A] mortgage is but an incident to the debt, the payment of which it secures, and its ownership follows the assignment of the debt’— not the other way around.” Peters v. Bank of N.Y. Mellon, 227 So. 3d 175, 180 (Fla. 2d DCA 2017) (quoting Johns v. Gillian, 184 So. 140, 143 (Fla. 1938)). The oblique reference in the assignments of mortgage to “moneys now owing” was not sufficient to transfer an interest in the note. See Jelic v. BAC Home Loans Servicing, LP, 178 So. 3d 523, 525 (Fla. 4th DCA 2015).

Because appellee failed to establish its standing to foreclose, we reverse the final judgment and remand for the entry of judgment for the appellant.

Wells Fargo “Explains” Securitization

YOU NEED AN INFINITE NUMBER OF BASES AND PLAYERS TO PLAY BALL WITH THESE GUYS: The Trustee controls the trust as trustee. Oops, wait, it is the Master Servicer who has all the control. No, wait again, it is the subservicer who has the right to administer the loan. But actually if there is an alleged default it is the special servicer who has exclusive authority over decision making. Except that the “Controlling Class” has the last say in the matter. But actually it is the Controlling Class Representative who has the last word.

I have always felt that there must be some way to force the other side into approving a modification or at least providing access by the borrower to the “lender” to discuss or negotiate the matter. I still believe that. Maybe this article will help spur some ideas. Information is leverage, especially in the world of false claims of securitization.

 

Let us help you prepare your narrative (blue print) for litigation: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Hat Tip Bill Paatalo

see Wells Fargo Document – No Lender in Remics

Essentially the banks would have us believe that by magic they created loans without owners or holders in due course. So it might as well be the banks who foreclose under any pretense they choose to offer. The political decision was to let them do it for fear that the banks would bring down the entire system. But if that were true, the bank’s capital would be worthless as would every world currency including the dollar. They bluffed Presidents Bush and Obama and the Presidents blinked. Millions of foreclosures followed because the ordinary guy is just not that important even if it involves a substantial portion of a population.

I will provide my comments and suggestions for discovery or cross examination along with each statement in the above cited article. Keep in mind that the entire article is an exercise in deceit: It is assuming that securitization actually happened. If that were true then they would be more than happy to show that the subject loan was purchased on a certain date by the payment of value to a specific seller by a trust. The trust would then be a holder in due course. But as we have seen numerous times nobody ever refers to the trust as a holder in due course which can only mean there was no such purchase.

The indented portions are direct quotes from the WFDb article cited above.

The thing most borrowers fail to realize about conduit loans is that once a loan has been securitized, they are not working with a “lender” anymore.

That’s the first sentence of the “explanation.” And the first thing that pops out is “conduit loans.” What is a conduit loan? Is the subject loan a conduit loan? In what way is the subject loan a conduit loan? [This also corroborates what I have been writing for years — that Matt Taibbi (Rolling Stone Magazine) got it right when he describes securitization as a monster with multiple tentacles.]

There is no legal definition for a conduit loan. The banks would have us believe that if they present any tentacle, that is sufficient for them to foreclose on a loan. But that isn’t legal standing — it is fraud on the court. A loan is a loan, but Wall Street banks don’t want you thinking about that. But by calling it something different it immediately plays into the bias of the court assuming that the big banks know what they are doing and that only they can explain what is going on.

Corroborating my description of the “Conduit”: remark, WFB explains that you are not dealing with a lender anymore. Is that supposed to make us feel better? There is no lender? Was there ever a lender? If, yes, then please identify the party who loaned their money to the borrower.

Now this on servicer advances:

If a loan becomes delinquent, the Master Servicer is usually obligated to make the first three or four payments to the certificate holders as well as pay trust expenses on delinquent assets…

The Master Servicer is reimbursed when the borrower makes up the payment or when the property goes into foreclosure and is later sold.

So we are being told that the Master Servicer is making payments to investors regardless of whether the borrower makes any payment. First, the payments to investors are made by the Master Servicer because they are the only one with access to a giant slush fund or dark pool created out of money that should have a gone to each trust and been maintained as a trust account, administered by the trustee.

But it is true that the Master Servicer gets paid for the “servicer advances” when the property is sold. So if the investors received 12 months of payments (of at least interest), even though it was taken out of a reserve pool (read the prospectus) consisting of their own money, the Master Servicer gets paid as though it was a reimbursement when in fact it is a windfall. Needless to say the incentive is to let the case languish for years before foreclosure and sale take place.

The longer the time period between the alleged default and the sale of the property, the more money is received by the Master Servicer as “reimbursement” for money it never advanced.

The Special Servicer makes all final decisions about dispositions of defaulted property and Real Estate Owned (REO). Often they are also the holders of the “first loss pieces” of the pool. Because they are taking the most risk, as part of their agreement to take that risk, they usually insist on being the Special Servicer as a requirement of their investment. There are only a handful of special servicers in the country.

Really? So the Master Servicer, the subservicer and the Trustee of the alleged REMIC trust have no say in whether to work out or modify a loan that is economically not feasible but which could be feasible if there was a workout or modification. What is a first loss piece of the pool? What is the account name of the pool supposedly held in a bank somewhere? Does the account name match the alleged REMIC trust in any way? Is there an account administered by the Trustee? Does the Trustee get performance reports or end of month statements?

Oops wait! There are other people with special powers —

The PSA also designates a “Controlling Class” who will provide input on recommendations for Special Serviced Loans and REO.

If the Special Servicer is willing to extend the loan, they have to get permission from the Controlling Class Representative (CCR), who is a fiduciary for all the certificate holders.

Anyone who has seen that famous but from Abbot and Costello in the 1950’s understands what is happening here. The Trustee controls the trust as trustee. Oops, wait, it is the Master Servicer who has all the control. No, wait again, it is the subservicer who has the right to administer the loan. But actually if there is an alleged default it is the special servicer who as exclusive authority over decision making. Except that the “Controlling Class” has the last say in the matter. But actually it is the Controlling Class Representative who has the last word.

So in discovery ask which of those entities was contacted about modification and why the borrower was instructed to send the application and documents to the subservicer when the subservicer had no authority?

And let’s not forget the fact that the certificate holders have no right, title or interest in the loans, the debt , the note or the mortgage. So their “Fiduciary” (who apparently is not the Trustee of the alleged Trust) does what?  How do we contact these intermediaries to whom powers and obligations of a trustee are passed around like free money? How do we know if the subservicer is telling the truth when it reports that the “investor” turned down the settlement or modification.

And by the way, why do we not have recording of the modification agreement? Why does not the Trustee of the REMIC Trust sign the modification agreement? Instead it is ALWAYS the signature of the servicer who, as we already know, has no power to accept or deny requests for modifications — and of course it is never recorded in county records. Why?

Remember, there are no “pockets of money” to use for refinance. Special Servicers, although legally allowed by the PSA to forgive any portion of the debt, rarely do so because often that would negatively affect one or more of the bondholders at the expense of the others. Instead, the Special Servicer, on behalf of the conduit, will almost always foreclose and sell the asset.

Hmmmm. So the Special Servicer (and the CCR?) ordinarily chooses to drive down the price of the collateral and take a larger loss on the subject loan because it “would negatively affect one or more of the bondholders at the expense of the others.” But the principal reduction would positively affect some bond holders more than others by saving the collateral. So exactly what are they saying as Wells Fargo Bank about the roles and rules of securitization?

And lastly, why did WFB task authors to write about this when their experience is limited to manufactured home communities? Probably the same reason why robo-witnesses know nothing.

 

 

 

 

 

 

 

 

Ocwen Admission Confounds Judges and Experts

This is a blatant attempt at deception  — a deceit without which none of the Trusts would be recognized as legal entities much less the owner of loans. Ocwen is admitting that there is no single owner of the loan it is allegedly “servicing.” “There is no single owner of the account, but rather the account is one of many in a securitized investment trust.”

For the uninitiated, this statement might suffice or at least be threatening enough as a challenge to their experience and intelligence to direct them away from the central false assertion that the trusts own any loan. They don’t.

Let us help you prepare for deposition or trial: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Hat Tip Bill Paatalo

see Ocwen Responsive Letter – CFPB – 11-03-2017

In this real live case, Ocwen is fulfilling its job that includes obfuscation as one of its paramount duties. After first “answering” the CFPB requests with obfuscation it then states “The ownership status of the account is based upon our review of our records as of the date of this letter.” It doesn’t say that the information is correct or even believed to be correct. It doesn’t say they performed due diligence to determine whether a true chain of ownership exists, combing the various records of “predecessors.”

Nor is there a statement that Ocwen is authorized to service the account. It simply says that it IS servicing the account. And of course then they do not assert the basis of their authority since they never asserted their authority. It is implied. It is assumed. In court, it might well be presumed by the court, the foreclosure mill attorney and even by the borrower and the borrower’s attorney. This is one of the errors that snatches defeat from the jaws of victory. An attack on what is missing instead of trying to dodge what is there would result in far more victories for homeowners.

The attorney’s client is Ocwen. Ocwen is impliedly asserting authority to service but can’t show it. In one recent case of mine, they came in with a Power of Attorney signed by someone who purportedly executed the instrument on behalf of Chase. The problem was that Chase was never mentioned before in any pleading, documents or testimony. The POA was false.

Back to ownership: “there is no single owner” implies that there are many owners. There are several problems with that assertion or implication that involve outright lying. Ocwen is saying that the loan is in a securitized investment trust which certainly would imply that the loan is not in transit nor is it owned by more than one trust.

Further if the reference (omitted) is to investors, that too is a lie in most cases. The certificate indenture usually contains the express statement that the holder of the certificate receives no right, title or interest to the debt, note or mortgage in “underlying” loans (which have never been acquired by the trust anyway).

So what are we left with? No single owner which means that the securitized investment trust doesn’t own it because that is one single entity. Multiple owners does not refer to investors because the express provisions on their certificates say they have no ownership of the debt, note or mortgage in the alleged loan.

The counterintuitive answer is that the bank’s are saying there is no owner. But there is an owner. It is a group of investors whose money was used to fund or acquire the loan. This was not done through any trust, as they intended and as was required by the “securitization” documents. If that was the case then the trust would have been named as lender or as holder in due course. That never happened.

But the holders of worthless securities can claim an equitable interest in the loan and perhaps even the collateral. In order to establish that interest the investors must go to a court of competent jurisdiction. But in order to do that the investors must know about the specific loan transaction(s), which they don’t. The fact that they don’t know about it and can’t exercise their rights does not mean that legally, anyone can intervene and assert ownership rights.

Ten years ago I said get rid of the current servicers and stick a government agency in as intermediary so that investors, as real parties in interest and borrowers as real parties in interest could do what the lending industry normally does best — work this out so that nobody loses everything and nobody gets a windfall. This could have all been over years ago and the impact on the economy would have been a powerful stimulus leaving no inherent weakness in our economy or our currency.

Unfortunately the courts strayed from making legal decisions and instead made a political decision to save the banking industry at the expense of homeowners.

 

 

 

Wells Fargo, Ocwen and Fake REMIC Trust Crash on Standing

What is surprising about this case is that there was any appeal. The trial court had no choice but to dismiss the foreclosure claim.

  1. A copy of the note without an indorsement was attached to the complaint. This leads to the presumption that the indorsement was attached after the complaint was filed. Standing must be proven to ex isa at the time the suit was filed.
  2. The robo-witness could have testified as to the date the indorsement was affixed but he said he didn’t know.
  3. The robo-witness was unable to testify that the default letter had been sent.
  4. It didn’t help that the foreclosure case had been brought before by two different parties and then dismissed.
  5. Attorneys attempted to admit into evidence an unsigned Pooling and Servicing Agreement that could not be authenticated and was merely “a copy of a printout obtained from the SEC website”. This is an example of how court’s are rejecting the SEC website as a government document subject to judicial notice or even introduction into evidence without competent testimony providing the foundation for introducing the PSA for a fake trust.
Let us analyze your case and give you ammunition for the court battle: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

see Wells Fargo, as trustee v Madl

Note that the style of the case shows that Wells Fargo was never the Plaintiff. The purported or implied trust was the named Plaintiff. But as Wells Fargo explained in its own article, the Trust is not the Plaintiff and neither are the certificate holders the Plaintiff because their certificates most often expressly state that the holder of the certificate does NOT have any right, title or interest in the “underlying” loans.

In fact if you read it carefully you will see that no trust is actually named or mentioned. AND the failure of the “trust instrument” (the PSA) shows that the trust was never created and never existed. An unsigned, incomplete document downloaded from a site (SEC.gov) that anyone can access to upload documents is not evidence.

Financial Industry Caught with Its Hand in the Cookie Jar

Like the infamous NINJA loans, the REMICs ought to be dubbed NEITs — nonexistent inactive trusts.

The idea of switching lenders without permission of the borrower has been accepted for centuries. But the idea of switching borrowers without permission of the “lender” had never been accepted until the era of false claims of securitization.

This is just one example of how securitization, in practice, has gone far off the rails. It is significant to students of securitization because it demonstrates how the debt, note and mortgage have been separated with each being a commodity to sell to multiple buyers.

Let us help you analyze your case: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

see https://asreport.americanbanker.com/news/new-risk-for-loan-investors-lending-to-a-different-company

Leveraged loan investors are now concerned about whether they are funding a loan to one entity and then “by succession” ending up with another borrower with a different credit profile, reputation, etc. You can’t make this stuff up. This is only possible because the debt has been separated from the promissory note — the same way the debt, note and mortgage were treated as entirely separate commodities in the “securitization” of residential mortgage debt. The lack of connection between the paper and the debt has allowed borrowers to sell or transfer their position as borrower to another borrower leaving the “lender” holding a debt from a new borrower. This sounds crazy but it is nevertheless true. [I am NOT suggesting that individual homeowners try this. It won’t work]

Keep in mind that most certificates issued by investment bankers purportedly from nonexistent inactive trusts (call them NEITs instead of REMICs) contain an express provision that states in clear unequivocal language that the holder of the certificate has no right, title or interest to the underlying notes and mortgages. This in effect creates a category of defrauded investors using much the same logic as the use of MERS in which MERS expressly disclaims and right, title or interest in the money (i.e., the debt), or the mortgages that reregistered by third party “members.”

Of course those of us who understand this cloud of smoke and mirrors know that the securitization was never real. The single transaction rule used in tax cases establishes conclusively that the only real parties in interest are the investors and the borrowers. Everyone else is simply an intermediary with no more interest in any transaction than your depository bank has when you write a check on your account. The bank can’t assert ownership of the TV you just paid for. But if you separate the maker of the check from the seller of the goods so that neither knows of the existence of the other then the intermediary is free to make whatever false claims it seeks to make.

In the world of fake securitization or as Adam Levitin has coined it, “Securitization Fail”, the successors did not pay for the debt but did get the paper (note and mortgage or deed of trust). All the real monetary transactions took place outside the orbit of the falsely identified REMIC “Trust.” The debt, by law and custom, has always been considered to arise between Party A and Party B where one of them is the borrower and the other is the one who put the money into the hands of the borrower acting for its own account — or for a disclosed third party lender. In most cases the creditor in that transaction is not named as the lender on the promissory note. Hence the age-old “merger doctrine” does not apply.

This practice allows the sale and resale of the same loan multiple times to multiple parties. This practice is also designed to allow the underwriter to issue investors a promise to pay (the “certificate” from a nonexistent inactive trust entity) that conveys no interest in the underlying mortgages and notes that supposedly are being acquired.

It’s true that equitable and perhaps legal rights to the paper (i.e., ownership) have attached to the paper. But the paper has been severed from the debt. Courts have inappropriately ignored this fact and stuck with the presumption that the paper is the same as the debt. But that would only be true if the named payee or mortgagee (or beneficiary on a Deed of Trust) were one and the same. In the real world, they are not the same. Thus we parties who don’t own the debt foreclosing on houses because the real parties in interest have no idea how to identify the real parties in interest.

While the UCC addresses situations like this Courts have routinely ignored statutory law and simply applied their own “common sense” to a nearly incomprehensible situation. The result is that the courts apply legal presumptions of facts that are wrong.

PRACTICE NOTE: In order to be able to litigate properly one must understand the basics of fake securitization. Without understanding the difference between real world transactions and paper instruments discovery and trial narrative become corrupted and the homeowner loses. But if you keep searching for things that ought to exist but don’t — thus undercutting the foundation for testimony at deposition or trial — then your chances of winning rise geometrically. The fact is, as I said in many interviews and on this blog as far back as 2007, they don’t have the goods — all they have is an illusion — a holographic image of an empty paper bag.

DEUTSCH BANK Memo Reveals Documents and Policies Ripe for Discovery

This completely corroborates what I have been saying for years along with a chorus of lawyers and pro se litigants across the county. It simply is not true that the attorney represents the trust or the trustee. 

This “Advisory” shows that there are documents that are rarely in the limelight and that clarify claims of securitization in practice. Note that the memorandum cited below comes from Deutsch Bank National Trust Company, as trustee and Deutsch Bank Trust Company Americas, as trustee.

These names are often NOT used when foreclosure actions are initiated where the name of the alleged REMIC Trustee is Deutsch Bank. It is important to note that neither of the two trust entities actually have been entrusted with any loans on behalf of any trust. Their name is used, for a fee, as windows dressing.

In this memo, Deutsch is attempting to limit its liability beyond the absence of any duties or trustee powers whose absence is revealed by reading the Pooling and Servicing Agreement (PSA) which is the alleged Trust instrument.

Let us help you plan your discovery requests: 202-838-6345
Get a consult and TEAR (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments. It’s better than calling!
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
—————-

Hat tip to Bill Paatalo

See Deutsche Bank Memorandum – July 2008

I have previously published and commented on parts of this memorandum. This is an expansion on my comments. This “advisory” obviously intends to bring alleged servicers back in line because it states in the introductory paragraph that the Trustee respectfully requests that all servicers review the First Servicing Memorandum and adhere to the practices it describes.”

None of this would have been necessary if the servicers were conforming to the directions and restrictions contained in the First Servicing Memorandum. We all know now that they were not conforming to anything or accepting instruction from anyone other than the alleged “Master Servicers” for NEITs (nonexistent  inactive trusts).

In discovery, one should ask for any servicer memoranda that exist including but not limited to the Memorandum to Securitization Loan Servicers dated August 30, 2007 a/k/a the First Servicer Memorandum, and all subsequent correspondence or written directions to servicers including but not limited to this “Advisory Concerning Servicing Issues Affecting Securitized Housing Assets.

Note also the oblique reference to the fact that the cut-off date actually means something.  It states that “typically” the REMICs (actually NEITs) take ownership of loans at the time the securitization trusts are formed. Thus discovery would include questions as to whether or not that occurred and if not, when did transfer of ownership occur and with what parties. Also one would ask for correspondence and agreements attendant to the alleged “transaction” in which the Trust allegedly purchased the loans with trust money that came from the proceeds of sales of certificates to investors. If the Trust did not pay value for the loans then it did not acquire the debt. It only acquired the paper instruments that are used as evidence of the debt.

Perhaps most importantly, the memo comes down hard on the use of powers of attorney, which are a favorite medium through which lawyers for the foreclosing parties typically try to patch obvious gaps in the chain of ownership or custody of the loan documents.

Then the memo provides foreclosure defense attorneys with the opportunity to attack the foundation laid for testimony and exhibits from robo-witnesses. It states that all parties must “Understand the mechanics of of relevant securitization transactions and related custodial practices in sufficient details to address such questions in a timely and accurate manner.” As any foreclosure defense lawyer will tell you, the robo-witness knows nothing about “the mechanics of of relevant securitization transactions and related custodial practices.” [The problem is that most borrowers and foreclosure defense lawyers don’t know either].

The inability of the robo-witness to describe the specific securitization practices in real life as it pertains to the subject loan gives rise to a cogent attack on the foundation for the rest of his testimony. With proper objections, perhaps motions in limine, and cross examination, this could lead to a defensive motion to strike the witnesses testimony and exhibits for lack of foundation. The following quote takes this out of the realm of theory and argument and into simple fact:

Servicers must ensure that loss mitigation personnel and professionals engaged by servicers, including legal counsel retained by servicers, understand the mechanics of relevant securitization transactions and related custodial practices in sufficient details to address such questions in a timely and accurate manner. In particular, servicing professionals [including “loss mitigation”] must become sufficiently familiar with the terms of the relevant securitization documents for each Trust for which they act to explain, and where necessary, prove those terms and resulting ownership interests to courts and government agencies.”

Note the assumption that lawyers are hired by servicers and not the Trustee or the Trust. Thus the servicers hire counsel and then order that foreclosure be brought in the name of the alleged trust. But if there is no trust or no acquisition of the debt, or authorization (remember powers of attorneys are not sufficient), the servicer is without legal authority to do anything, much less collect money from homeowners or bring foreclosure actions.

Paragraph (2) of the this “advisory” also gives guidance and foundation for what various people, especially attorneys, can say about who they represent and how.

“The Trustee believes that all persons retained by the servicer should specifically role or capacity in which they are acting. … One would be less accurate… if he or she claimed to be … attorney for the Trustee. A more accurate statement [attorney for servicer] acting for [Deutsch] as trustee of the Trust.”

This completely corroborates what I have been saying for years along with a chorus of lawyers and pro se litigants across the county. It simply is not true that the attorney represents the trust or the trustee.

 

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