How Did I Get Here? Part 1: Who Am I Up Against?

In the 6th century BC manuscript titled, The Art of War, author Sun Tzu wrote, “It is said that if you know your enemies and know yourself, you will not be imperiled in a hundred battles; if you do not know your enemies but do know yourself, you will win one and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.”

Make no mistake, we are at war, and now that we’re on the battlefield, and in the spirit of this manuscript let’s identify and define just who we are dealing with.

For purposes of illustration the names and identifying numbers used in this article are random and used only as examples and are not associated with any real trust.

Our quest begins at the County Recorder’s or Registrar’s office. Get a copy of every thing on record from the time you purchased the property to present. It would be best if you can convince the clerk to run the search for you and print all of it so you might request certified copies of every document on record. This way you cannot be accused later of omission.

Look at the first recorded Mortgage/Deed of trust. You should have a Note associated with that recorded instrument. Look at both the Note and Mortgage/Deed of Trust. Who is the Lender/Originator; who is the Borrower; who is the Trustee; who is the Beneficiary/Nominee? List them all out by title and name them all.

• Lender – Countrywide Home Loans Inc.
• Borrower – John Doe, and Jane Doe
• Trustee – Robert (Bob) Smith LLC
• Nominee – MERS

Look through the most recent filings and see who the last named party of record is. If there are any assignments, and there should be unless your mortgage loan instrument was not securitized. Who ever the last “assignee” of “Note and Mortgage” is of record is who should be claiming a right against the property if there is a valid right to claim. Put them on your list.

Last Party of Record
• Countrywide Home Loans Inc.

Who is the last party claiming a right by mail or telephone communications?
• Bank of America.

Who is the current loan servicer?
• Bank of America.

Who are the attorneys claiming to have a client with an alleged claim?
• The Law Offices of; Beatum, Robbum, Blyndum and Associates LLP.

Who is in the background in the secondary markets? If you have a conventional loan with or without MERS your mortgage loan instrument of a piece of it may be recorded with the Securities Exchange Commission (SEC). If it is then you can find record of it on the SEC website. If you have a “MIN” number on the front page of your security instrument and MERS is named in the instrument you can find a piece of your mortgage loan instrument referred to on the MERS website. If Fannie Mae, Freddie Mac, or Gennie Mae claims to hold a piece of it, good luck. You are not getting in those pools. If you can find record at the SEC website download the Pooling and Servicing Agreement (“PSA”), and the 424B5 Prospectus (“Prostectus”).

The PSA is a written agreement primarily between, but not limited to, all of the parties identified and defined in the PSA. Some of the key players are identified and defined on the first page of the PSA.

• Depositor – Countrywide Home Loans Inc.
• Master Servicer and Securities Administrator – WELLS FARGO BANK, NATIONAL ASSOCIATION
• Trustee and a Custodian – LASALLE BANK NATIONAL ASSOCIATION
• Trust Name – MORGAN STANLEY MORTGAGE LOAN TRUST 2005-1MS MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2005-1MS

What other useful information can we get from the PSA?
• POOLING AND SERVICING AGREEMENT Dated as of January 1, 2006
• Closing Date: January 31, 2006.
• Section 10.02 Prohibited Transactions and Activities. Amongst others we see – (a)(v) a repurchase of Mortgage Loans pursuant to Article II of this Agreement, nor acquire any assets for any REMIC, nor sell or dispose of any investments in the Distribution Account for gain, nor accept any contributions to any REMIC after the Closing Date, unless it has received an Opinion of Counsel (at the expense of the party causing such sale, disposition, substitution or acceptance) that such disposition, acquisition, substitution, or acceptance will not result in an Adverse REMIC Event,
• Section 11.06 Governing Law. This Agreement shall be construed in accordance with the laws of the State of New York, and the obligations, rights, remedies of the parties hereunder shall be determined in accordance with such laws without regard to conflict of laws principles applied in New York (other than Section 5-1401 of the New York General Obligations Law). This tells us that the trust is a New York Trust and is governed by New York Trust Law.

Now let’s look at the Prospectus. The 424B5 Prospectus is a subsequent document related to the PSA. The PSA calls the Prospectus an “Offering Document”. We see other parties identified and defined here
• Depositor – is the same as on the PSA
• Issuing Entity – is the Trust
• Sponsor and Seller – Morgan Stanley Mortgage Capital Inc.
• Master Servicer – is the same as on the PSA

What other goodies are in the Prospectus?
• “[p]rohibited transactions,” that income would be subject to federal income tax at 100% rate.
• [T]he “service” portion of the income could be subject to federal income tax either at the highest marginal corporate tax rate or at the 100% rate on “prohibited transactions,” and the “non-service” portion of the income could be subject to federal income tax at the highest marginal corporate tax rate or, although it appears unlikely, at the 100% rate applicable to “prohibited transactions”.

So the way this reads, if a portion of your mortgage loan instrument was placed into a REMIC after the closing date the trustee allowed or committed a “REMIC event” that subjected the trust vehicle to 100% taxation.

The remaining question is, “How were you harmed?” which I will cover in Part Two of this article.

Steve Skidmore

Get Jurisdictionary NOW!!!

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