US Bank Loses Uncontested Foreclosure

U.S. Bank Trust, N.A. v. Monroe, 2017 WL 923326 (N.D.N.Y. March 8, 2017)

This case is much more than a decision on diversity jurisdiction. The decision is important for that reason but even more substantively it lifts the hood over the “Trustees” of so-called REMIC Trusts.

Listen to the Last Neil Garfield Show at US Bank, Trustee loses Uncontested Foreclosure

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Hat tips to Bill Paatalo and Charles Marshall.

Here the court finally brings US Bank (and others like Deutsch etc) to task about their positions as “Trustees” and makes the distinction between the alleged “Trust” who IS the Plaintiff (if properly described) and the alleged “Trustee” who is NOT the Plaintiff. That distinction throws off the entire narrative the banks are pursuing. everyone thinks they are dealing with US Bank when in fact they are dealing with the trust. The insertion of US Bank as a Trustee in name only can now be attacked with the winds of precedent behind you.

The nut cracked when the Court considered the question of whether US Bank had any duties, obligations, control or even knowledge. A negative answer to all of those questions would result in a finding that they were not a Trustee, and that the “property” (loans) were never entrusted to them or any other trustee, thus defeating the very existence of a trust and any claims for REMIC tax treatment, as well as claims for exemption under SEC Registration rulers.

The problem for the banks — all the major ones — was that the documents upon which they relied to establish the Trust specifically prohibit the Trustee from exercising any control, or even asking questions about “trust assets (their existence or status) thus establishing an unknown third party who has been anointed by the Master Servicer with the job of acting as “subservicer.”

Getting lost in the weeds many thousands of pro se litigants and foreclosure defense attorneys have missed the obvious, to wit: there is no trust without a COMPLETE trust instrument, a trustor, beneficiaries and PROPERTY that is entrusted to the trustee thus forming the physical existence of the trust as opposed to the hypothetical existence of a trust that exists only on paper (if in fact the Pooling and Servicing Agreement was fully executed and all the exhibits were attached (including the MLS- Mortgage loan schedule).

If U.S. Bank wishes to proceed in federal court, it must, within thirty (30) days, move to amend its Complaint to address the deficiencies identified in this order.

Faced with the challenges spelled out in the Order and the invitation by the same court to amend pleadings allegedly filed in the name of US Bank as Trustee (and not in its individual capacity), the lawyers disappeared and with them took US Bank back into the shadows.

As I have seen in thousands of cases, they just dropped the case and walked away. This of course leaves the homeowner in limbo unable to sell or refinance the property but still living in their home without mortgage payment or rent.

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