Deutsch Mystery Settlement Gives Clues to What Really Happened

1. Did the Trust ever exist in actuality or was it just a figment of imagination created on paper? This is the key question rather than the next question because all the evidence suggests that investor money never made it into the paper trust and thus there could never have been acquisition of loans by the trust because it had no money to do so.
2. Did the Trust ever operate as a going concern (within the 90 day limitation imposed by the IRC REMIC provisions).
3. Does the Trust still exist?
4. What payments did the beneficiaries receive. All evidence points to them receiving “servicer advances” (which are neither advances nor from the servicer) PLUS receiving the settlement money from the investment bank that sold them the bogus, empty mortgage bonds.
5. What is the balance due to the investors a/k/a beneficiaries of the trust?
6. How is that balance allocated to amounts due from borrowers?
7. Do the borrowers actually owe any money to the Trust?
8. Do the borrowers actually owe money to the trust “investors.”
9. If the Trust either never existed in the real world or has ceased to exist or the trust investors/beneficiaries have been paid all or part of the money owed to them from both borrowers and from third parties (i.e., servicers and investment banks), was there a ?transfer” of the debt, the note and the mortgage to the investment bank that settled with investors, why is US Bank, “trustee” still showing up as the foreclosing party?
10. If the actual owner of some debt is not any of the parties appearing in court, then how can modifications actually be properly processed?

Here are some interesting quotes from the article from housing wire.

No details about the settlement were disclosed in the motion, with the motions only stating that the two were settling.

In its initial complaint, MassMutual alleged that Deutsche Bank’s representations were what convinced the insurance giant to buy $125 million worth of securities. The bank, the argued in their filing, was the “exclusive source of information” regarding the loans that backed the securities.

The company later discovered that Deutsche Bank allegedly disregarded their own underwriting standards, and had purchased loans issued to borrowers regardless of the ability to repay. (e.s.)

Deutsche Bank argued that both the allegations were untrue, and that MassMutual should have known that there was something wrong with the securitizations. (e.s.) {Editor’s Note: The importance of this cannot be over-stated. It is last part of the Four Dog Defense. Deutsch is saying “OK, the mortgage backed securities were fake, they did hurt you, but it was your fault for not knowing we were cheating you.”}

My main concern though is how this money is allocated from hundreds of billions of dollars of settlements to the illusory loan portfolios allegedly owned by specific trusts. If the investors are the only ones that could be considered “creditors” or something equivalent to a creditor or claimant, then basic double entry bookkeeping says there must be a corresponding reduction of what is owed TO THOSE CREDITORS OR CLAIMANTS. And THAT means that the notice of default, notice of right to reinstate, notice of acceleration and notice of sale or foreclosure lawsuit are all wrong. It also probably eliminates the mortgage as a viable instrument without rescission or attacking the initial transaction under a claim of nullification.

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