Paper Trails, Rabbit Holes and Successors

COMMONWEALTH OF MASSACHUSETTS – COURT OF APPEALS – NO. 2015-P-1259
U.S. Bank, N.A., as Trustee for RASC 2006KS9 v. Wendy Bolling

(This article is not a legal opinion. Hire an attorney for individual cases.)

A Major Blow to Banks and Servicers

In a decision that could ripple through foreclosure litigation, the Massachusetts Court of Appeals dealt U.S. Bank and other mega-banks a heavy setback. The case, U.S. Bank (as Trustee for RASC 2006KS9) v. Bolling, highlights the fundamental weakness in securitized mortgage foreclosures: many trusts were never properly funded, and transfers made in violation of their Pooling and Servicing Agreements (PSAs) are void, not voidable.

For over a decade, banks and servicers have pushed courts, homeowners, and lawyers down a carefully constructed rabbit hole — the paper trail. By fabricating assignments, forging endorsements, and relying on legal presumptions, they created the illusion of valid transfers. Judges, eager to process foreclosures, often accepted this façade, sidelining inquiries into whether any real transaction had ever occurred.

The Banks’ Playbook

1. Origination documents and later assignments were treated as presumptively valid, even if no underlying purchase or payment occurred.

2. Successor servicers were deliberately kept in the dark, ensuring robo-witnesses couldn’t testify to actual ownership or balances.

3. Courts routinely dismissed challenges, claiming PSA violations were mere “internal matters” beyond a homeowner’s standing.

The result: foreclosures approved in favor of empty trusts, even where no evidence showed the trust paid for or received the loan.

Turning Point: Void Really Means Void

The Bolling ruling builds on the logic of Yvanova v. New Century (Cal. 2016): ratifying a void act does not make it valid. In New York, where most REMIC trusts are formed, EPTL § 7-2.4 clearly states that acts in contravention of the trust instrument are void.

The Massachusetts Court of Appeals embraced this clarity:

• Ultra vires acts — such as assignments after the trust’s closing date — are nullities.

• A trust cannot acquire good title through a void transfer.

• Homeowners may directly challenge a plaintiff’s standing where the assignment into the trust was void ab initio.

Quoting precedent:

“If the mortgage at issue was subject to a PSA that was contravened by its assignment into the trust, such that the assignment was void ab initio under New York law, the Bank arguably would not have acquired good title and would have no superior right to possession.”

Supporting Authority

• Anderson v. Mather (N.Y. 1870): Statutory lineage establishes that unauthorized trust acts are void.

• Deutsche Bank v. Collins (Mass. Housing Ct. 2013): Assignments outside PSA timelines are void; foreclosure invalid.

• Glaski v. Bank of America (Cal. 2013): Late transfers into a New York trust are void, not voidable.

• HSBC v. Marra (Fla. 2013): Foreclosure voided due to ultra vires acts under New York trust law.

Why It Matters

For years, courts have bent doctrine to “facilitate” foreclosures, offering homeowners little more than a fair trial followed by eviction. Bolling signals a shift: if a trust never received the loan in compliance with its governing documents, it has no standing.

This ruling underscores:

• Homeowners are entitled to challenge void assignments.

• Paper trails filled with fabricated documents cannot cure fatal defects.

• Ultra vires acts cannot be ratified retroactively.

⚖️ Bottom Line: The Massachusetts Appeals Court confirmed what whistleblowers, analysts, and defense attorneys have long argued: empty trusts cannot foreclose. If the PSA was violated, the assignment is void. No amount of ratification, presumption, or legal gymnastics can change that.