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No Federal Preemption by a Trustee of a Mortgage Backed Security Trust from Senior Counsel of the Office of the Comptroller of the Currency
In
light of the Fraudclosure actions in New Jersey, I though I would dig
up and dust off this post from back in July of last year, reposted in
full below...
No
Federal Preemption by a Trustee of a Mortgage Backed Security Trust
from Senior Counsel of the Office of the Comptroller of the Currency
Posted by Foreclosure Fraud on July 22, 2010 ·
From
the letter… Discussion Pursuant to 12 U.S.C. § 371, national banks
may “make, arrange, purchase or sell loans or extensions of credit
secured by liens on interests in real estate, subject to * * * such
restrictions and requirements as the Comptroller of the Currency may
prescribe by regulation or order.” The OCC’s real … Read more
From the letter...
Discussion
Pursuant
to 12 U.S.C. § 371, national banks may “make, arrange, purchase or
sell loans or extensions of credit secured by liens on interests in
real estate, subject to * * * such restrictions and requirements as the
Comptroller of the Currency may prescribe by regulation or order.”
The OCC’s real estate lending regulations provide that, “[e]xcept
where made applicable by Federal law, state laws that obstruct,
impair, or condition a national bank’s ability to fully exercise its
Federally authorized real estate lending powers do not apply to
national banks.” 12 C.F.R. § 34.4(a).
Section 34.4(a)(10) states that national banks “may make
real estate loans under 12 U.S.C. § 371 without regard to state law
limitations concerning * * * [p]rocessing, origination, servicing, sale or purchase of,
or investment or participation in, mortgages.” 12 C.F.R.§ 34.4(a)(10)
(emphasis added). However, in no sense, under the facts presented,
can the Banks be viewed as making a real estate loan under 12 U.S.C. § 371 and 12 C.F.R. § 34.4. The
Banks did not originate the loans. They did not fund the loans at
inception. Nor did they “purchase” the loans as part of any real estate
lending program comprehended by the regulation. Here, the Banks act as trustees
for the benefit of investors in the trusts. The substance of the
transaction is that the investors, not the Banks, are purchasing the
loans that have been made by Delta. The investors own the beneficial interest
in the loans held by the Banks as trustees. And the effect of any
liability for violation of the CFA ultimately falls on the investors.
Nowhere do the Banks allege that they themselves, as opposed to the
trusts they represent, are exposed to liability for any violation of the
CFA. For all these reasons, 12 U.S.C. § 371 and 12 C.F.R. § 34.4(a) simply do not apply to the transactions by which the Banks acquired legal title to the loans in the circumstances at issue here.
With
respect to the activities of Wells Fargo and Bank One as trustees,
the banks derive their power to act as trustees from 12 U.S.C. § 92a.
When state law conflicts with national banks exercising powers granted
to them by federal law, the Supremacy Clause of the United States
Constitution requires that the state law yield to the paramount
authority of federal law, with the result that application of the state
law to national banks is preempted. The Supreme Court has explained
this principle stating that it interprets “grants of both enumerated
and incidental ‘powers’ to national banks as grants of authority not
normally limited by, but rather ordinarily pre-empting, contrary state
law.” Barnett Bank of Marion County v. Nelson, 517 U.S. 25, 32 (1996).
As
the Supreme Court demonstrated in its review of preemption cases in
the Barnett case, Supremacy Clause principles animating conflict
preemption have been expressed in a wide variety of phrases that do
not yield materially different meanings, including “stand as an
obstacle to,” “impair the efficiency of,” “significantly interfere,”
“interfere,” “infringe,” and “hamper.” See Barnett, 517 U.S. at 33.
Thus, if application of the CFA to the loans held by the Banks as
trustee were to obstruct, impair, condition, or otherwise interfere
with the Banks’ exercise of fiduciary powers granted to them under
federal law, the state statute would be preempted.
Based on
the facts presented, we do not believe that to be the case. The Banks
have not claimed that application of the CFA would impair their ability
to act as trustee in these circumstances or that the state law
otherwise interferes with the performance of their legal obligations as
trustee. Nor could they claim that having to respond to state law
defenses to recovery on assets held in trust obstructs or impairs their
power to act as trustee absent some indication that the state law
infringes their authority, conditions their actions, or imposes a
burden in a way prohibited by federal law. In short, the
Banks’ authority to act as trustees under federal law does not
insulate the assets the Banks hold in trust for the benefit of
investors from state law requirements otherwise applicable to those
assets.
Matt Weidner had a good take on this document as well...
CAPACITY IS A FORECLOSURE CASE KILLER!- OCC LETTER: TRUSTS NOT EXEMPT FROM STATE LAWS
There
is a growing body of evidence that stands for the proposition that
the banks and shadowy trust companies sweeping across our nation to
take homes are not in fact exempt from state banking and business
regulation. I have posted the Cuomo and Watters Supreme Court cases,
but below is a very interesting letter from the Office of
Comptroller and Currency which makes an even more compelling
presentation of the facts.
Quite simply, we must continue to
challenge the shadowy, unidentified anonymous entities that are
filing suits and taking homes from Americans…..this letter should
become a regular part of your research and pleading.
For more of Matt's post go here...
And didn't the banks in Mass just admit exactly what the letter states?
In
a statement, Steve Dale, a U.S. Bancorp spokesman, said: “Our role in
this case is solely as trustee concerning a mortgage owned by a
securitization trust. This judgment has no financial impact on U.S.
Bancorp. The issues addressed by the court revolved around the process
of the servicing of the loan on behalf of the securitization trust,
which was preformed in this case by the servicer, American Home Mortgage Servicing.”
Vickee
J. Adams, a Wells Fargo spokeswoman, said: “The loans at issue in the
court’s ruling were not originated, owned, serviced or foreclosed
upon by Wells Fargo. As trustee of a securitized pool of loans, Wells
Fargo expects the entities who service these loans to abide by all
applicable state laws, including those laws that govern foreclosure
sales.”
Oh yea, they did...
Be sure to check out the full letter below...
4closureFraud.org
»
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are we getting to the point where NO houses are going to be able to be foreclosed on (or sold and bought for that matter)
How do you get away with selling particaptions in the revenues arising from empty trusts? Brooklyn Bridge shares, anyone?
I believe the term is SCAM.
...and I suppose the Banks cannot be held responsible for fluctuations in value of these trusts, as it's a market function.
I think what Skipjack is saying is that the value of the trusts is ZERO since there is nothing in them. Just exactly how does ZERO fluctuate? Once most of these large investor's in these trusts realize they are holding nothing but air the show will begin.
"The substance of the transaction is that the investors, not the Banks, are purchasing the loans that have been made by Delta. The investors own the beneficial interest in the loans held by the Banks as trustees. And the effect of any liability for violation of the CFA ultimately falls on the investors."
The notes were never assigned to the trusts; they own ZERO beneficial interest. The REMICS are empty. You can't foreclose upon that which you do not own. The securetizers broke state law. The Feds can't change state law, nor can they pre-empt several hundred years of well-settled state case law. I'd like to see CONgress try to revise tax law going back more than a decade.
It's a wet dream of the banks, folks. There's no way they get around the fact that the REMICS are empty boxes.
Agree, empty boxes but for the sympathy note from the investment bankers who f****d the investors.
the Office of Comptroller of the Currency just sucks. i think AIG got to pick it's own regulator who over saw their operations. i know now for sure everything is fraud, every fucking thing in this mother fucking fraud country and it's various entities, just fraud on top of fraud. i got a court date for a jury trial, 8 counts of fraud.
A new Presidential Executive Order will cure this mess in a minute:
By the powers invested in me as President of the US, I hereby transfer title to all properties within the US to the Federal Reserve Bank.
Barack H. Obama
See how simple a solution this is. The TBTFs don't take a hit; balance sheets remain the same. No more underwater loans; just pay 100% of your income to the FED each month. The FEd will work out a deal with the states on property taxes.
I told You: You are no longer *united* States of America. The last thing that unites you - is the exception of banks from the common law that everyone must obey.
Banks are now higher than Courts.
Goodbye, USA.
Banks are now higher than Courts.
Goodbye, USA.
I didn't hear no bell. Rocky Balboa
Actually, the TRUTH is higher than the Courts and those that know how to get to the truth, run the courts and get dishonest lawyers disbarred. Check out www.nationalfraudconstable.net. Sorry you have given up on freedom Dr.
This is not the only way mortgagees (mortgage holders, not the borrowers, who are the mortgagors - somewhat counter-intuitive) are going to try to get the federal courts & CONgress to claim MERS in all its mutated forms should be regulated at the federal level, as in INTERstate, thus giving federal courts jurisdiction over the matter, and denying state high courts providence of same.
no matter how bad the rip-off and shakedown gets, there will always be plenty of idiots super eager to borrow more money.
http://covert2.wordpress.com