The REAL deal please!!!

Trusts, Trustees and Beneficiaries

Posted on March 18, 2010 by Neil Garfield


These statutes provide numerous regulations and requirements that entities
engaging in trust activities should comply with, but the regulations
are largely being ignored by the entities engaging in trust activities
and both courts and the enforcing agency, the Florida Department of
Financial Services,

Editor’s Note: Matt Weidner is onto something
here that has been pointed out by many lawyers across the country. His
central point is that if you want to call yourself a Trustee in
foreclosures then there had better be a trust. If there is a trust the
state laws, rules and regulations govern them and the trustees. Most of
these laws are being ignored by the pretender lenders with impunity —
Judges routinely ignore arguments concerning the authority of the Trust
to do business in the state, the right of the Trustee to proceed with
foreclosure, and the accountability to both the borrower and the
investor, both of whom might be beneficiaries under the Trust. Greenwich
Financial filed suit against Countrywide and BOA to underscore the
point that the investors are the creditors and that if there is a trust,
it is the investor who is the beneficiary. Yet, as Charles Koppa has
pointed out numerous times, the prices on the courthouse steps are
routinely manipulated against the interests of any beneficiaries.

But the real question in my mind is whether these “trusts”
actually meet the definition of that term. for there to be a working
trust and an authorized trustee, there must be a trustor (the one who
creates the trust), a beneficiary (the one who receives the benefits
from the trust) and a “res” which is something of value that is put into
the trust and which is owned, rather than passed through the t rust.

The trustor must have some property interest (tangible or
intangible) that is being conveyed to the trustee to hold in trust for
the beneficiaries. I’ve looked at the pooling and services agreements,
prospectuses, assignments and assumption agreement and individual
assignments, alleged powers of attorney and the promotional literature
of the Special Purpose vehicles that issued mortgage backed securities
(bonds) to investors who end up holding a piece of paper called a

In my opinion, there is no trust, even though one is named. In my opinion there is no trustee,
even though one is named. Beneficiaries are not named and the res of the
trust which supposedly is a pool of loans has been conveyed in
percentage slices to the investors who bought the certificates.

There is no Trustor identified in most cases although there
have been arguments of the pretender lenders that the investors are the
trustors and the beneficiaries. There is also the argument that the
pooling and service agreement allocating a “pool” which more often than
not initially contains fictitious assets contains a Trustor somewhere
in the document.

In my opinion the party designated as a Trustee is merely a
candidate for an agency relationship that might arise if several
conditions are met, as defined in the prospectus. The agent has no
liability or obligations of any kind until those conditions happen at
some time in the future.

And since the res of the trust allegedly includes a pool of
loans that was owned by some vaguely defined pool aggregator or
“trustee” and since the percentage interests in that pool was conveyed
to the investors, it is my opinion that there is no res in the so-called
trust (i.e., there is nothing being held in trust). If there is nothing
held in trust, then even if the trust technically exists, the trustee
has no powers. This is congruent with the REMIC provisions of the
Internal Revenue Code that allow the SPVs to be formed as pass through
entities in which no tax event occurs and therefore no tax applies.

So back to Weidner’s point, if the trust is real, it isn’t
following the laws governing their creation and use, OR, to my point,
the trust isn’t real anyway. It is for these reasons, among others, that
you MUST identify the investors, get in touch with them, compare notes
and get an accounting from them. If the Courts ever force the pretender
lenders to disclose the identity of these creditors and allow you to
pursue interaction with them, then, and only then, will the alleged
default be validated, the demand on the note verified, and the
possibility of financial double jeopardy eliminated.

Florida Statutes Chapters 658 which regulates Banks and Trust Companies
and can be found at
and chapter 660, the section of Florida Statutes which specifically
regulates trust business in Florida and which can be found at
are two important consumer protection statutes that are being widely
ignored by regulators and courts across the state.

The definition of trust activities provided in statute is
very broad and specifically includes many of the activities national
banks and foreign corporations engage in related to mortgage
foreclosure activities. An analysis of foreclosure cases
filed in counties across the state will reveal that a recognizable
percentage of the cases are filed “as trustee” for some other
party or entity.
ignoring the laws and the application of these laws to entities that
are violating them. These statutes
provide numerous regulations and requirements that entities engaging in
trust activities should comply with, but the regulations are largely
being ignored by the entities engaging in trust activities and both
courts and the enforcing agency, the Florida Department of Financial

Homeowners who are subject to foreclosure and foreclosure defense
attorneys are encouraged to carefully review the cited statutes and
consider the application of the statutes to each individual case.
Lenders who are engaging in trust activities but who are not properly
licensed or registered to do business in the state should be prevented
from prevailing in foreclosure actions on equitable grounds based on
their failure to comply with these important consumer protection and
state interest laws.


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