Why “Investor Trusts” in Foreclosure Cases May Be a Legal Illusion

---

No Witness from the Named Claimant

In foreclosure trials, one glaring fact repeats: there is never a competent witness from the named claimant.

Instead:

• Testimony comes from independent contractors with no personal knowledge.

• They claim to be “familiar” with a servicer’s records, not the trust’s records.

• Courts accept this unless homeowners object early and forcefully.

Without objections, hearsay records and fabricated claims slip through unchallenged.

---

The Problem with the “Investor Trust” Label

Foreclosure lawyers often refer to the plaintiff as an “investor trust.” But:

• The term may be inaccurate, misleading, or outright fraudulent.

• Whether a trust even exists is unclear without seeing the actual trust agreement (not just the PSA).

• No witness from the trust ever testifies to prove its existence, its assets, or an unpaid loan receivable.

A stronger strategy is to call it what it is: a “securitization vehicle” or “special purpose vehicle (SPV)” for Wall Street — not a true trust with beneficiaries who own loans.

---

Why Servicers Aren’t Really Servicers

Most foreclosure cases rely on servicer testimony. But servicers:

• Rarely handle the actual receipt and disbursement of money.

• Perform administrative functions at most.

• Depend on the fiction of a valid trust and trustee for their authority.

Even the CFPB has ruled that FINTECH companies — not servicers — maintain the only real records of payments and disbursements.

---

The Bigger Issue: No Real Loan Account

At the heart of the defense narrative:

• If no loan account receivable exists, there is no creditor.

• If no creditor exists, there is no enforceable loan.

The homeowner’s “promise to pay” was issued under false pretenses — the belief that a lender would fund and maintain a loan account under RESPA and lending laws. If no such account was ever created, the transaction is not a loan at all.

Courts and banks sometimes even float the “gift theory”: suggesting the mortgage was a gift if the transfer can’t be proved as a sale. Either way, homeowners did not agree to that transaction.

---

Investors Are Not Beneficiaries

Despite the “investor trust” label:

• Certificate holders never acquired rights to homeowner loans.

• Investors own only IOUs from investment banks, not mortgage assets.

• References to “investors” and “certificates” serve only to mislead courts into assuming legitimacy.

In reality, the only “beneficiaries” of these alleged trusts may be brokerage firms, who receive notice of assignments but never hold original loan documents or rights.

---

The Trap Homeowners Must Avoid

Too often, homeowners (or their lawyers) fall into the trap of admitting the debt exists by:

• Referring to “the loan,” “the servicer,” “the trustee,” or “the trust.”

• Acknowledging a default, but arguing technicalities in the paperwork.

That strategy usually fails. Courts won’t deny foreclosure simply because of clerical errors if the borrower admits the loan and default.

Instead, the correct defense is to challenge the foundation:

• Demand proof of the trust’s existence.

• Demand a competent witness from the trustee.

• Challenge the servicer’s authority and the absence of a real loan account.

---

Why Experienced Counsel Matters

Successfully raising these issues requires:

• Experienced trial counsel to object and preserve arguments.

• Experienced appellate counsel if trial courts ignore the law.

Without strong legal guidance, homeowners risk waiving critical defenses — and losing their case.

---

Take Action If You’re Facing Foreclosure

If your foreclosure lists an “investor trust” as the plaintiff:

• Don’t assume the trust is real.

• Don’t admit to a debt without demanding proof.

• Work with a foreclosure defense attorney who knows how to challenge sham trusts and false servicer testimony.

---

⚖️ Bottom Line: No competent witness from the trust ever appears in foreclosure cases. That absence isn’t a technicality — it’s a fatal flaw in the claimant’s case if properly challenged.

---

Need Help With Your Case?

Call us today at 844.583.5339
Submit your case statement online for a complimentary recommendation.
Visit LivingLies.me for resources and case insights.

Posted in Uncategorized |