The Mystery of the Missing Trusts

The more researchers and attorneys investigate the structure and composition of securitized trusts the more phantom-like they become.

Amazingly, what is being found in many, if not most, is there was no trustor, beneficiary, funding, assets, bank accounts or even the sham appearance of being managed by a trust department. No one has even been moving money through the trust, or with reference to a trust, to its “holders.”

Often when investigators try to establish a money trail between the holders of a mortgage-backed security, to a pretender-lender and then on to a homeowner to close a specific transaction, that money trail does not exist. There is no trail, for example, between a loan originated by ASBC 1234-1 Trust, a trust claimed by US Bank as Trustee, and a specific homeowner, and no evidence of any assignment to where the money has been transferred.

The bank named as Trustee – US Bank in this case – does not indicate any specific Trustee duties, powers or obligations assigned and does not show any management support over the trust through its trust department for this specific “trust” named ASBC 1234-1. It puts into question whether there was ever any trust to actually manage.

In many cases the PSA and the note do not state the same payment terms. In this particular US Bank case investors are in the process of suing, but they have no way to enforce notes and mortgages with fatal flaws, where the notes do not accurately state the terms of the actual monetary transaction, name the wrong payee, beneficiary, and/or lender.

Even when the investors refuse to insist on enforcement of fatally defective terms, that does not give license for a pretender-lender to the transaction to claim the right to collect on a mortgage or to enforce terms when it defaults.

Investors are beginning to make claims against the investment banks like US Bank and Deutsch Bank who sold fractionalized shares of mortgage notes on the basis that they had the authority as owner of the mortgage bonds to sell these when nothing could have been further from the truth in most cases. Hundreds of millions of dollars are tied up in these suits alleging that the investment bank received money under false pretenses and failed to account for the money properly. They failed to reveal, for example, that the loans might well have been paid in whole or in part through mortgage insurance, bank bailouts and the like, but not reflected on any statements sent to the investor-lenders. Once again, the pretender-lender appears to have profited at the expense of the investor-lenders and the homeowners.

These frauds have opened up a huge opportunity for real estate investors to help underwater homeowners AND pick up properties at large discounts. By investigating the specific circumstances behind underwater homeowner’s securitized loans, we are discovering blatant fraud that can be used as leverage against the banks in order to negotiate huge discounts. This allows investors to free homeowners from the burden of dumping money into an underwater home.

If you would like more information on this awesome strategy, give my office a call at 706-485-0162!