2017-04-08 MBS TRUSTEES HAVE NO RIGHT TO BRING FORECLOSURE

ACTIONS
https://livinglies.wordpress.com/2013/12/30/us-bank-bofa-lasalle-bank-and-other-trustees-slammed-
the-door-on-their-own-toes/
MBS TRUSTEES HAVE NO RIGHT TO BRING FORECLOSURE ACTIONS
SEE QUOTES FROM US BANK WEBSITE

Upon analysis, research and reflection it appears as though the game could be over in the
US Bank cases, the Bank of America cases, and any case in which the foreclosing party is
identified as the Trustee. US Bank clearly has no right or even access to the foreclosure
process. How do we know? Because US Bank says so on its own website. SEE https://www.
usbank.com/pdf/community/Role-of-Trustee-Sept2013.pdf.
Here are some notable quotes from the US Bank websites which references materials to make their own
assertions apply to all trustees over MBS trusts:
Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee,
each with their own distinct roles, responsibilities and limitations.
U.S. Bank as Trustee:
As Trustee, U. S. Bank Global Trust Services performs the following responsibilities:
Holds an interest in the mortgage loans for the Benefit of investors
Maintains investors/securities holder records
Collects payments from the Servicer
Distributes payments to the investors/securities holder
Does not initiate, nor has any discretion or authority in the foreclosure process (e.s.)
Does not have responsibility for overseeing mortgage servicers (e.s.)
Does not mediate between the servicers and investors in securitization deals (e.s.)
Does not manage or maintain properties in foreclosure (e.s.)
Is not responsible for the approval of any loan modifications (e.s.)
All trustees for MBS transactions, including US Bank have no advanced knowledge of when a
mortgage loan has defaulted.
Trustees on MBS transactions, while named on the mortgage and on the legal foreclosure documents,
are not involved in the foreclosure process.
While trustees are listed on mortgages, and therefore in legal documents as well, as the owner of record,
its interest is solely for the benefit of investors. The trustee does not have an economic or
beneficial interest in the loans and has no authority to manage or otherwise take action on
the loans which is reserved for the servicer. (e.s.)
Additional sources of information:
American Bankers Association White Paper, The Trustees Role in Asset-backed securities, dated
November 9, 2010, http://www.aba.com/Press+Room/110910Roleofatrustee.htm
The Trust Indenture Act of 1939
In several cases I am litigating, the servicer seems to be saying that they approve the
foreclosure but do not want the turnover of rents. This brings up the question of whether
the notice of default was sent by the Trustee, who according to the attached information
would not even know if the default is being called, in which case the notice would be
fatally defective. The fatal defect would be that it is not a function of the Trustee if the PSA
has the usual language. That function is exclusively reserved for the Servicer. Since the
PSA probably has language in it that restricts the knowledge of the Trustee to virtually
zero, and certainly restricts the knowledge of the Trustee as to all receipts and
disbursements processed by the sub-Servicer, the broker dealer (investment bank), and
the Master Servicer. Thus the Trustee of the MBS trust is the last party on whom one could
depend for information about a default except that if Servicer advances (quotations
used because the money is coming from the investment bank) then the Trustee would
presumably know that from the creditors point of view, there is no default.
A NOTICE OF FILING could be sent to the Court with the full pdf file from the US Bank
website while the smaller pdf file containing excerpts from the full pdf file could be
attached as an exhibit to the Motion. THIS WILL HAVE BROAD RAMIFICATIONS FOR
THOUSANDS OF FORECLOSURE CASES ACROSS THE COUNTRY. IF THE TRUSTEE
INITIATED THE FORECLOSURE, EVERYTHING IS VOID, NOT VOIDABLE ACCORDING
TO NEW YORK AND DELAWARE LAW. ACTIONS COULD BE BROUGHT BASED UPON
JURISDICTIONAL GROUNDS FOR WRONGFUL FORECLOSURE THUS TURNING EACH
FORECLOSURE CASE INTO AN ACTION FOR DAMAGES OR TO REGAIN TITLE SINCE
THE SALE WAS BOGUS.
But the complexity gets worse. If the action should have been brought by the servicer, but
the creditor was really a funded trust who was legally represented by a properly authorized
servicer, then the bid by the Trustee at the auction might have been valid. Hence the attack
should be on the foreclosure process itself rather than the credit bid.
Not to worry. I dont think any of the Trusts were funded or to put it more precisely, I
have found no evidence in the public domain that any of the MBS trusts were in fact funded
the way it was set forth in the prospectus and pooling and servicing agreement. There does
not appear to be any actual trust account over which the Trustee has control. Hence both
the existence and capacity of the Trust and the Trustee are issues of fact that must be
decided by the Court.
That leaves the MBS trusts with no money to originate or acquire mortgages. So who really
owns the loans? This is why in Court on appeal, the attorneys agree that they dont know
who owns the loans. But what they really mean, whether they realize it or not, is that they
dont know if any of the loans are secured by a perfected mortgage. If none of the parties in
their chain actually came up with money or value, then the lien is not perfected or valid.
The mortgage would be subject to nullification of the instrument.
If the question was really who owns the loans, the answer is simple the investors who
put up the money. We all know that. What they are dancing around is the real nub of the
confrontation here: Since we know who put up the money and therefore who owns the
loan, was there any document or event that caused the loan as owned by the investors to be
secured? The answer appears to be no, which is why the investment banks are all being
sued every other day for FRAUD. First they diverted the investor money from the trust and
then they diverted the title from the trust beneficiaries to one of their own entities. The
actions of the investment banks constitutes, in my opinion, an intervening tortious or
criminal act that frustrated the intent of both the borrowers (homeowners) and the
lenders (investors).
So the real question is whether the Court can be used to reform the closing and create a loan agreement
that is properly enforceable against lender and borrower. That appears to require the creation of an
equitable mortgage, which is held in extremely low regard by courts across the country. And then you
have questions like when does the mortgage begin and what happens to title with respect to intervening
events?
The simple answer, as I said in 2007, is do some sort of amnesty and reframe the deals to reflect economic
reality allowing everyone to bite a bullet and everyone to cover their losses but avoid, at this point another
6 million families being displaced. My experience with borrowers is that the overwhelming majority
would sign a new mortgage document that is enforceable together with a new note that is enforceable and
leaves all issues behind even though they know they could push the issue further. The borrower s are a lot
more honest and straightforward than their banker counterparts. The deal should essentially be between
the investors and the homeowners.
The question is whether the case is dismissed, possibly with prejudice, or if they can try to
substitute the servicer as the Plaintiff in a style that would or might read SPS, as servicer,
on behalf of ????, Trustee for the asset backed trust or on behalf of the trust
beneficiaries.
The further question is whether the complaint could be amended. But if the servicer didnt
send the NOTICE OF DEFAULT, there is nothing to amend since on its face, the Notice of
Default was sent by a party who not only was not authorized to start the process but who
was expressly precluded from having any knowledge of the default.
This in turn leads to the further question of whether the verification was valid if signed on
behalf of US Bank or any other party as trustee on the complaints to foreclose.
The smaller file tells the whole story we have been arguing and it should be attached. I would attach the
smaller one page synopsis of quotations from their website. It leaves no room for interpretation
trustees do not, and cannot initiate foreclosures or anything else relating to enforcement. They may not
meddle in the foreclosure and they may not meddle or mediate in settlement or mediation. Here is the
smaller file: US BANK ROLE OF TRUSTEE
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