Are REMIC Trusts Foreclosing Illegally In Montana? Something Smells Rotten In “Big Sky” Country!
(Note: Nothing in this article should be construed as legal advice or legal opinions. Seek legal counsel in the State of Montana to review and interpret these issues and facts.)
For the past several months I have been investigating non-judicial foreclosures by REMIC trusts in the State of Montana. What I have uncovered is astounding!
It appears that most if not all of these REMIC trusts created by Wall Street have been operating illegally within the State of Montana and foreclosing on homes having violated numerous Montana laws. The massive non-compliance and disregard for these laws has gone undetected, or has simply been ignored, by the state’s agencies and county recorders. Here is what I have uncovered:
In Montana, “Foreign Business Trusts” are required to register with the Secretary of State per MCA § 35-5-201. The trusts are required to identify all trustees, name agents for service of process within the state, and submit their governing documents such as the PSA’s, etc. The trusts are also required to file state tax returns if the trusts hold Montana assets that produce income.
From my investigation, none of the typical REMIC trusts appear to have registered as required. So what are the potential legal ramifications of this? Well, in the below case titled, Estate of Christine Anne Reeder v. Hammer Holdings Trust, et al., the Montana Supreme Court upheld the lower court’s ruling by stating,
“The court ruled that the Trusts were invalid because they were business trusts which had failed to comply with the requirements of § 35-5-201, MCA, and had unlawfully conducted business in the state. The court held that the Trusts were invalid and the transfers to them void, denying Defendants a grace period to apply for a license.”
MT Supreme Ct Unpublished Opinion
The Reeder Court defined “carrying out business” by a trust under MCA 35-
1-115(4), (5), and (6) as follows:
(4) to purchase, receive, lease, or otherwise acquire and to own, hold, improve, use, and otherwise deal with real or personal property or any legal or equitable inteterst in property, wherever located;
(5) to sell, convey, mortgage, pledge, lease, exchange, and otherwise dispose of all or any part of its property;
(6) to purchase, receive, subscribe for, or otherwise acquire any other entity; to own, hold, vote, use, sell, mortgage, lend, pledge, or otherwise dispose of any other entity; and to deal in and with shares or other interests in, or obligations of any other entity[.]
The Reeder Court ruled,
“It appears that these trusts have engaged in all of these activities in one way or another, and that being the case, they have illegally conducted business in the state.
The Court also rejects the idea that the transfers of Christine’s property to the invalid trusts can somehow be retroactively sanctioned by allowing the trust to apply for a license to do business at this time, four years after the invalid transfers took place, and a year and half after Christine’s death. The trusts are invalid under Montana law, and the transfers of property to the invalid trusts are void.”
The Reeder Court, in determining that the transfer of the property to the invalid
trusts were void, stated,
“The trusts cannot retroactively validate themselves so as to legitimize the invalid transfers that occurred nearly four years ago.”
Not only does it appear that all assignments to these REMIC trusts, which are “Foreign Business Trusts,” are VOID for non-compliance with MCA § 35-5-201, but these trusts never had “standing” or “jurisdiction” in the eventual “unlawful detainer” (eviction actions), as plaintiffs were not legally recognized in Montana. And, if the assignments are void, it is only logical that no title ever passed to the foreclosing REMIC trusts prior to their conducting non-judicial foreclosure sales.
But wait, it appears to get worse. Shining further light upon these trusts’ failures to comply with Montana laws, the REMIC’s failed to comply with MCA § 31-2-210 and MCA § 31-2-211, to which these failures also render the assignments “Void.”
Under MCA § 71-1-321, deeds of trust under the “Montana Small Tract Financing Act” (MSTFA) are considered to be “mortgages” and are subject to all laws relating to mortgages on real property when a “conveyance for security purposes is made to a trustee or trustees for the benefit of one or more lenders.”
This statute leads to mandatory compliance under Montana Titles 70 & 31 which read as follows:
70-21-202. Certain transfers in trust — mortgages — when to be recorded.
Transfers of property in trust for the benefit of creditors and transfers or liens on property by way of mortgage or abstract of such document are required to be recorded in the cases specified in Title 31, chapter 2, on the special relation of debtor and creditor and Title 71 on mortgages, respectively.
Section 31-2-210: The instrument of assignment –
(1) An assignment for the benefit of creditors must be in writing and subscribed by the assignor or by the assignor’s agent authorized by writing.
(2) The assignment must be acknowledged or proved and certified in the mode prescribed by the law on recording transfers of real property and recorded as required by 31-2-215 and 31-2-216, but recording in one county constitutes a compliance with 31-2-215 and 31-2-216.
(3) The assignment must be accompanied by the affidavit of the assignor and assignee that the assignment is made in good faith, for the benefit of the creditors of the assignor, and without any design or hinder, delay, or defraud the creditors.
(4) The assent of the assignee, subscribed and acknowledged by the assignee, must appear in writing contained in or at the end of or endorsed upon the assignment before the assignment is recorded and, if separate from the assignment, must be duly acknowledged.
Failure to comply with these requirements under Montana law means the assignments are “void” under MCA § 31-2-211 which also reads as follows:
Section 31-2-211: Compliance necessary to validity of assignment
Unless the provisions of 31-2-210 are complied with, an assignment for the benefit of creditors is void against every creditor of the assignor not assenting thereto.
When I confronted the county clerk in the recorder’s office in Stillwater County, Montana, about these legal requirements, and whether REMIC trusts were in compliance with these recording statutes, she refused to answer my questions. In fact, she refused to offer any explanation as to the purpose of these statutes; to whom and why they apply. Instead, I was referred to the County Attorney to answer these basic questions. So when I asked the County Attorney if these REMIC trusts were required to comply with these statutes, he too refused to answer my questions. I was told I had to file a complaint if I believed these trusts were violating the law, to which my response was, “So in essence, you’re telling me that I have reason to file a complaint?” No response.
Since I began investigating these issues, I’ve been told that a clerk in another Montana county, who at this time will remain anonymous, is aware of these compliance violations and has complained vehemently to her superiors only to be told to keep her mouth shut and do as she’s told.
From the looks of things, something smells rotten. Whether this is mass incompetence by the state’s governing agencies, or a mass cover-up, the REMIC trusts with their servicing agents and minions, appear to be running rough-shod over Montana citizens and their properties, not to mention the likelihood they have also been evading their Montana tax liabilities as well.
If what I have uncovered is true, it is time to exhume all the dead foreclosure bodies for formal legal autopsies. The liability looks to be astounding!
Bill Paatalo
Private Investigator – OR PSID# 49411
bill.bpia@gmail.com
(503) 726-5954
One Responseto “Are REMIC Trusts Foreclosing Illegally In Montana? Something Smells Rotten In “Big Sky” Country!”
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I believe the oidfactors site is where to go for REMIC info, for anyone interested. Also there is an anonymous reporting form “3949A” you can file with the IRS if you suspect or know of tax fraud.