CLOSING THE GAP:

THE FORECLOSURE IS VOID UNDER STATE LAW

By Michael T. Pines | November 2013

Glaski and the “New York Trust” theory held the securitization trust was void. However, I have been wondering if this means the foreclosure itself was void and wanted to fill the gap.

In California, I did, and have prepared a rough draft for allegations to be put into a complaint which should explain that the foreclosure is void under California law, and probably in most non-judicial foreclosure states.

(Violation of California Civil Code section 2924 – in addition to the Securitization Trust being void, the foreclosure is also void under California Law)

1. There are two trusts formed in connection with securitizations: (1) the securitization trust (“Securitization Trust”); and, (2) the trust created by the deed of trust (“Trust Deed Trust”).

2. All RMBS were created using form documents and are structured the same throughout the United States.[1]

3. Under the securitization documents, the trust deed or mortgage were required to be assigned to the Trust as set forth above and as admitted in writing (below).

4. Certificates were sold to the investors (“Investors”). Representations were made to the Investors by the banks that processed the securitization process.

5. According to the parties that formed the Securitize Trusts, the Trustee has no power to foreclose and instead it is the “Servicer” according to the securitization documents.[2]

6. The Defendants have admitted this in writing.

7. For example, in the description of the securitization process some of the representations made to the Investors by U.S. Bank, a party involved in thousands of securitizations stated:

“Parties involved in a MBS transaction include the borrower, the originator, the servicer and the trustee, each with their own distinct roles, responsibilities and limitations.

As Trustee, (Securitization Trustee) Services performs the following responsibilities:

Holds an interest in the mortgage loans for the benefit of investors (which should have been done by a proper assignment as set forth above and under New York law, if not the Trust is void.) . . .

Does not initiate, nor have any discretion or authority in the foreclosure process.

Trustees on MBS transactions, while named on the mortgage and on legal foreclosure documents, are not involved in the foreclosure process.

The trustee does not have an economic or beneficial interest in the loans and has no authority to manage or otherwise take action on the loans which is reserved for the servicer. (Exhibit “…..”.)

8. A trust deed has three parties including the Trust Deed Trustee. The Trust Deed Trustee, is the only one that has the right to foreclose. Most states use deeds of trust to secure residential real estate loans. (A chart is attached hereto as Exhibit “…”.)

9. In California, the rights and restrictions of the trust deed trustee are strictly controlled by statute.[3]

10. The procedure for foreclosing on security by a trustee’s sale pursuant to a deed of trust is set forth in California Civil Code section 2924, et seq. The statutory requirements must be strictly complied with, and a trustee’s sale based on a statutorily deficient notice of default is void.[4]

11. The securitization Servicers were routinely not named as the Trust Deed Trustee and no Substitution for the proper Servicer was recorded prior to the recording of a Notice of Default, the first step in foreclosure in California.

12. In this case the Securitization Servicer was ………….. and the Deed of Trust, Trustee shown on the deed of trust was ………. at the time the Notice of Default was recorded.

13. ii) 2934a(1)(A) says “all beneficiaries” must execute the Substitution of Trustee (the applicable California law when a lender seeks to substitute the trustee on a deed of trust and pursue a foreclosure sale), and the substitution of trustee document must be RECORDED to be effective, if not, the resulting sale is VOID.

14. Therefore, Defendants further violated Cal. Civ. Code §2924 et. seq. and the foreclosure is void.

[1] It is requested the court take Judicial Notice of this commonly known fact. See, http://en.wikipedia.org/wiki/Mortgage-backed_security_referencing_authority.

[2] There was a “Master Servicer” described in the PSA which often delegated it’s responsibilities to a “sub-servicer”.

[3] For example, under California Law; [Insert case law]

[4] System Inv. Corp. v. Union Bank (1971) 21 Cal.App.3d 137, 152-153, 98 Cal.Rptr. 735; see California Mortgage and Deed of Trust Practice (Cont.Ed. Bar 1979) s 6.40, p. 295; see also Bisno v. Sax (1959) 175 Cal.App.2d 714, 720, 346 P.2d.

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Foreclosure Defense Legal Network

Michael T. Pines
619-272-7066

I DO NOT PRACTICE LAW. I ONLY CONSULT WITH ATTORNEYS. NOTHING IN THIS E-MAIL SHOULD BE CONSTRUED AS LEGAL ADVICE AND YOU MUST CONSULT WITH A LICENSED ATTORNEY IF ADVICE IS NEEDED