So I get this call today from this lawyer out in Kentucky about some class action case etc. that I never heard of before.
Well, I just had a chance to skim through the document (was putting up Halloween decorations) and it looks good to me so here it is…
GREAT WORK HEATHER BOONE MCKEEVER!!!
Sorry I do not have time to excerpt…
From the Ticker…
It’s about damned time.
This is worth a read, even though it’s VERY long. The bottom line is that all the Tickers I’ve written on this subject, from bad conveyances into REMICs, to the tax issues, to the fraudulent documents, to the fact that the MBS are “empty boxes”, up and down the line – it’s all in here.
Anyone who thinks this is a “nothingburger” after reading this has rocks in their head.
This is a rather lengthy filing, 124 pages worth. It asserts virtually everything that I’ve written about for the last three years related to REMICs and MBS (that the notes were not conveyed and now can’t be under the law), and alleges Racketeering.
I’ve read the whole thing, and want to present just a few short cites, but am embedding the entire document as well for those who “want it all”.
REMICS were newly invented in 1987 as a tax avoidance measure by Investment Banks. To file as a REMIC, and in order to avoid one hundred percent (100%) taxation by the IRS and the Kentucky Revenue Cabinet, an MBS REMIC could not engage in any prohibited action. The “Trustee” can not own the assets of the REMIC. A REMIC Trustee could never claim it owned a mortgage loan. Hence, it can never be the owner of a mortgage loan.
57. Additionally, and important to the issues presented with this particular action, is the fact that in order to keep its tax status and to fund the “Trust” and legally collect money from investors, who bought into the REMIC, the “Trustee” or the more properly named, Custodian of the REMIC, had to have possession of ALL the original blue ink Promissory Notes and original allonges and assignments of the Notes, showing a complete paper chain of title.
58. Most importantly for this action, the “Trustee”/Custodian MUST have the mortgages recorded in the investors name as the beneficiaries of a MBS in the year the MBS “closed.” Every mortgage in the MBS should have been publicly recorded in the Kentucky County where the property was located with a mortgage in the name similar to “2006 ABC REMIC Trust on behalf of the beneficiaries of the 2006 ABC REMIC Trust.” The mortgages in the referenced example would all have had to been publicly recorded in the year 2006.
59. As previously pointed out, the ¡°Trusts¡± were never set up or registered as Trusts. The Promissory Notes were never obtained and the mortgages never obtained or recorded.
60. The “Trust” engaged in a plethora of “prohibited activities” and sold the investors certificates and Bonds with phantom mortgage backed assets. There are now nationwide, numerous Class actions filed by the beneficiaries (the owners/investors) of the “Trusts” against the entities who sold the investments as REMICS based on a bogus prospectus.
61. In the above scenario, even if the attorney for the servicer who is foreclosing on behalf of the Trustee (who is in turn acting for the securitized trust) produces a copy of a note, or even an alleged original, the mortgage loan was not conveyed into the trust under the requirements of the prospectus for the trust or the REMIC requirements of the IRS.
62. As applied to the Class Members in this action, the end result would be that the required MBS asset, or any part thereof (mortgage note or security interest), would not have been legally transferred to the trust to allow the trust to ever even be considered a “holder” of a mortgage loan. Neither the “Trust” or the Servicer would ever be entitled to bring a foreclosure or declaratory action. The Trust will never have standing or be a real party in interest. They will never be the proper party to appear before the Court.
63. The transfer of mortgage loans into the trust after the “cut off date” (in the example 2006), destroys the trust’s REMIC tax exempt status, and these “Trusts” (and potentially the financial entities who created them) would owe millions of dollars to the IRS and the Kentucky Revenue Cabinet as the income would be taxed at of one hundred percent (100%).
Yep. And this is just the first key into the circle of Hell where these folks are headed.
See, without standing they can’t foreclose, but then we get back to “who can?” And what we find is that the originator was paid, and thus they can’t either. Worse, for those originators that are bankrupt, their “assets”, such as they are, can’t go anywhere without a bankruptcy trustee’s signature, and further, even if someone was to acquire that, which nobody has, THE REMICs CAN’T TAKE THE PAPER ANYWAY AS THEIR CLOSING DATE HAS EXPIRED.
So we have a bankrupt originator who was paid in full and can’t foreclose, and we have a note that can’t be transferred into the REMIC without destroying its tax preference (retroactively, incidentally), which instantaneously trashes the value of the MBS – probably by more than they could hope to recover if they were going to take the note anyway.
In all cases, the lack of acquisition of the Class Members’ mortgage loans violates the prospectus presented to the investors and the IRS REMIC requirements.
If an MBS Trust was audited by the IRS and was found to have violated any of the REMIC requirements, it would lose its REMIC status and all back taxes would be due and owing to the IRS as well as the state of Kentucky. As previously stated, one hundred percent (100%) of the income will be taxed.
As the Class Members are identified and the identity of the MBS REMICs revealed through this action, the individual “Trusts”/ MBS REMICs will be turned over to the IRS for auditing.
Yep. Welcome to the second circle of Hell. Incidentally, I think both the Federal and State governments have a revenue problem, right? This ought to help that situation materially.
While attempting to circumvent Kentucky recording Statutes, the MBS Trust created for itself a situation wherein it had no legally recognizable interest in the loans for the benefit of the investors. The investors were invested in nothing. The MBS possessed nothing on the date the REMIC closed and perpetrated a fraud on the investors and the American taxpayer through its fraudulent qualification as a REMIC with the SEC.Or is that
or is that
No legal plan was ever in place to deal with the fact that the original Prospectus to the shareholder/investors was a myth.
MBS/Trustees and their lawyers discovered in the foreclosure process that the Note and Mortgage Assignments would never be located because they never existed. They also discovered that states did not allow blank Assignments or Assignments with retroactive effective dates. To solve the problem of the missing and non-existent Assignments, the MBS/Trustees, their attorneys and their Servicing Agents, decided to fabricate Assignments from thin air and then quietly record the fabricated Assignments.
Oh, let’s see, a year ago I was writing about this….. the fact that there were an awful lot of assignments and endorsements “in blank” which is not legal in a large number of states with regard to trusts, and that in addition back-dating assignments can’t be done either.
It’s never the original issue that really gets you – it’s your attempt to cover it up!
The Assignments of the Mortgage were signed and notarized many years after the actual date of the loan and the date listed with the SEC and IRS as the “Closing” of the REMIC. In every one of these cases, the MBS Trust has been operating illegally as a tax exempt REMIC. The federal government is in turn, owed billions of dollars in income tax from these entities. The individual states of the union has causes of action on behalf of their citizens for the unpaid state tax.
Yep. And the really bad news is that as soon as these things happened the loss of tax exemption is not only immediate, it’s irrevocable.
As previously set out, often the MERS held the Mortgage as “nominee” for a lender who was out of business and/or liquidated in bankruptcy. There could be no party legally able to Assign the Mortgage on behalf of the dissolved lender. The only party who could authorize the Mortgage Assignment for a bankrupt lender would be the Bankruptcy Trustee. In these cases where a MERS mortgage has been assigned on behalf of a bankrupt entity, a criminal violation of the bankruptcy code had occurred.
Yep again. A bankrupt entity cannot take actions without the approval of the trustee. If someone is “assigning” things without that written approval you got big trouble – bankruptcy fraud is serious business.