4th DCA Florida: Trustee of Asset Pool Must Join or Ratify


 

4th DCA Florida: Trustee of Asset Pool Must Join or Ratify

by Neil Garfield

 

"servicer may be considered a party in interest to commence legal action as long as the trustee joins or ratifies its action."

ElstonLeetsdale LLC v CWCapital Asset Management LLC-1

This ought to be interesting. If Deutsch, or U.S. Bank, or Bank of New York, or any of the other "Trustees" join or ratify the action then they are asserting, under oath (if the lawyer for the homeowner knows what he or she is doing) that (1) the Asset pool is exists, (2) that the subject loan is in the asset pool (i.e., consideration paid by the Trust and assignment before cut-off date) and (3) that the trust was properly organized and (4) that the Trustee is authorized by [fill in blank here, if the lawyer of the homeowner knows what he or she is doing] to accept the assignment, join in the lawsuit and ratifies the representations and claims made on behalf of the REMIC trust and (5) signed by  a trust officer for the bank who says it is the trustee for the asset pool.

You might want to ask while you are on the subject, exactly why the Trustee wants to bind the beneficiaries of the trust to ownership of a worthless loan. This is a question raised by Judge Shack in New York 5 years ago. Nobody was listening. Now maybe some people are starting to see the wisdom of Shack's question. If securitization was on the level, then the funding, assignment, assumption and payment would have all occurred as set forth under New York Law, the Internal Revenue Code, the provisions of the Pooling and servicing Agreement, which means underwriting according to industry standards and procuring insurance and credit default swap protection FOR THE INVESTORS, NOT THE BANKS WHO HAD NO MONEY IN THE DEAL.

So while you are on the subject, you might want to ask the trustee why they have made no claim against the insurance, credit default swaps and other payments received from co-obligors that were not disclosed to the borrower. In fact, you might want to ask whether the trustee views this as an account receivable, bond receivable or note receivable? If he or she doesn't know, ask who would know --- after all a trustee is like a receiver with special skills and experience in keeping the books for each trust and assuring customers there would be no commingling of funds. If the trustee doesn't think the trust is owed any money other than the payments from the borrower, ask him or her, why not?

Once the trustee acknowledges that there were payments which should have been allocated to the bond receivable account or account receivable for the investors, then ask the big question, to wit: do your books and records show the same flow of money in and out of the trust as the figures used by the subservicer in declaring the default, and bringing the foreclosure action. Once you get by "I don't know" the answer is going to be "NO" if you drill deep enough and keep asking the questions who knows, what do they know, how do they know it and is the party claiming to be the trustee really a trustee?

I ask you this: with each of these fine banking institutions maintaining separate corporations or divisions that provide trust services for even a few hundred thousand dollars, why wasn't the same trust department used to provide trust services to the REMIC trust? Why is it managed by Reynaldo Reyes, VP, Asset management at Deutsch Bank? What fees were received by the trustee? What services did it perform?

Suddenly a new dawn is upon us. The banks knowing full well they were going to claim and get free houses started early and effectively in persuading the media, government and the public, including the borrowers themselves that to defend the foreclosure was immoral because the borrower was seeking a free house. The banks were smart enough to get out in front of that one, but it is coming back around to bite them. The homeowners are not seeking free homes, they are seeking reasonable deals based upon true facts instead of false representations, withholding of disclosures required by law and lies from the intermediaries who pretend to be the lenders or to act for the lenders when they do not.

Is there a free house? Yes, every time another Judge rubber stamps another foreclosure and allows a non-creditor to submit a "credit bid" (non-cash) and take title to a home they advanced no money to finance or purchase any loan.


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July 2017
 
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