Constitutional Standing under Article III, minimally, will require that a party, must, have suffered some actual or threatened injury as a result of the Defendants` conduct, that the injury be traced to the challenged action, and that it is likely to be redressed by a favorable decision, this Plaintiff cannot satisfy this basic element with lawful success, and the history of the Plaintiff in similar cases across the country also attests to the fact which the Defendant alleges “that the Plaintiff HSBC lacks standing”. Foreclosure agents and servicers must prove they have authority to act for a party that has standing. In re Scott, 376 B.R. 285 290 (Bankr. D. Idaho 2007); Kang Jin Hwang, 396 B.R. at 767; Jacobson, supra at 12.


COMES NOW, xxxxxx Pro Se,. and states; HSBC BANK, USA, National Association, as Trustee, under the Pooling and Servicing Agreement dated August 1, 2006, ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates;, Plaintiff[s] has no parity with the Defendant, is without prudential standing, the Plaintiff lacks Constitutional Standing and Plaintiff[s] has failed to demonstrate it is the real party in interest.
Subsequent to discovery of the precise identity of the real party in Interest and when this has been proven, by Plaintiff, only then, can Plaintiff attempt proof that it has actual, full and complete authority to act on behalf of the real party in interest, which it must prove, if it cannot prove this, then the real party in interest must be enjoined, as a party.

If Plaintiff can prove that it has this authority, then it must prove that the instrument, the alleged note is negotiable.

The evident presence of a statuary trust, acting on behalf of certificate holders, this fact causes fatal UCC defects on standing issues, as is present in prima facie form here, Plaintiff [s] has not demonstrated it is holder in due course; Plaintiff is legally devoid of standing to enforce the note in question.
A federal court’s jurisdiction is Dependent upon the standing, of the litigant, which includes both constitutional standing and prudential standing. Valley Forge Christian Coll. v. Am. United for Separation of Church and State, 454 U.S. 464, 472 (1982); 3Kowalski v. Tesmer, 543 U.S. 125, 128- 29 (2004) (quoting Warth v. Seldin, 422 U.S. 490, 498 (1975)).

Plaintiff also lacks capacity.
Defendant is of opinion by belief and evidence, that, Fremont Investment and Loan corporation (Fremont), now an inactive, defunct corporation, the “original lender” as stated on the Deed of Trust in section [c] “Lender” of the subject Deed of Trust dated April 19, 2006, may have the required standing, but Fremont is not enjoined in this suit.
Defendant will offer, with sufficient exhibits and proof certain, that the “original lender” has not lawfully conveyed the Deed of Trust and its Note in a proper legal manner, to the Trust being, ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates; in keeping with law, and the Pooling and Servicing Agreement, and inclusive the Plaintiff[s] may not have the capacity to enforce itself.
Constitutional Standing under Article III, minimally, will require that a party, must, have suffered some actual or threatened injury as a result of the Defendants` conduct, that the injury be traced to the challenged action, and that it is likely to be redressed by a favorable decision, this Plaintiff cannot satisfy this basic element with lawful success, and the history of the Plaintiff in similar cases across the country also attests to the fact which the Defendant alleges “that the Plaintiff HSBC lacks standing”.
Foreclosure agents and servicers must prove they have authority to act for a party that has standing. In re Scott, 376 B.R. 285 290 (Bankr. D. Idaho 2007); Kang Jin Hwang, 396 B.R. at 767; Jacobson, supra at 12.
The Plaintiff , as is reported by its regulator, is accused of not having the sufficient workforce in place to expedite its enterprise properly and, because the Plaintiff[s] is inefficient legally, and otherwise, and being unable to enforce upon an obligation, Plaintiff[s] then has reverted to inadequate, poor, criminally lawless, endeavors of fraud.
The Plaintiffs are in lawsuits with itself, its associates, individuals, other banks, and its regulators; Defendant has no shortage of case law, rulings, news articles, blog rants, reports and memorandum, which suggest that the Plaintiff may have been known, or is known to support and commit improper lawless actions and inclusive of predatory loans and robo-signing.
The assignments of mortgage in this particular case are “Robo-Signed”, and therefore legally deficient, by stated black letter law.
At this link is the OCC, being the regulator of the Plaintiff[s], the OCC has issued Stop Orders, on this particular Plaintiff[s], for predatory lending, and financial crimes, as is, with this case in present at hand. White color crimes are very prevalent today, these are faceless criminals, who the courts never get to know but the damage they reek in their wake is legally and lawfully inhumane at best, these crimes are punishable by our court system, and parties who partake in such acts as, as at hand, are criminals.
Defendant offers some of the “recitals” of the link to demonstrate that the Plaintiff[s] has endemic problem[s], and to show how it must use fraud and deception to acquire its ill-gotten gains.
http://federalreserve.gov/newsevents/press/enforcement/enf20110413a4.pdf
(b) “Filed or caused to be filed in courts in various states and in connection with bankruptcy proceedings in federal courts or in the local land record offices, numerous affidavits and other mortgage-related documents that were not properly notarized, including those not signed or affirmed in the presence of a notary;
(c) Litigated foreclosure and bankruptcy proceedings and initiated non-judicial foreclosures without always confirming that documentation of ownership was in order at the appropriate time, including confirming that the promissory note and mortgage document were properly endorsed or assigned and, if necessary, in the possession of the appropriate party;
(d) Failed to respond in a sufficient and timely manner to the increased level of foreclosures by increasing financial, staffing, and managerial resources to ensure that the Mortgage Servicing Companies adequately handled the foreclosure process; and failed to respond in a sufficient and timely manner to the increased level of Loss”.

The Plaintiff[s] has caused fraud to be perpetrated on the homeowner, being its sole remedy to acquire property by legal title in its name.
(2).The Plaintiff[s] has no meritorious claims, it has no standing what so ever, and cannot survive in an equitably sufficient manner when faced with the alleged tort claims, which, the Defendant may have against the Plaintiff.
THE FACTS

the Defendant signed a Deed of Trust and a Promissory Note on April 19 2006 for the benefit of Freemont Savings and Loan a California Corporation, the defendant did not know and was not informed that she was signing an agreement that would result in a sale of stocks, that her loan would be put in a pool of mortgages and other types of loans and sold in many parts of the world. never knew of the identity of the Plaintiff, not until and after the Plaintiff claimed it bought Defendants home at a sale, that it was the highest bidder but the truth may have been or the truth is as is purported by the Plaintiffs claims, the home loan was transferred into a pool of loans to be sold on Wall Street; this pool of loans is governed by a Pooling and Servicing Agreement, under the statutory trust,” ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates;”.

ARGUMENTS

A. STANDING
Standing requests are governed by FED. R. BANKR. P. 4001(a)(1), to which FED. R. Bankr. P. 9014 is applicable. Rule 9014, in turn, incorporates Rule 7017, which makes FED. R. Civ. P. 17 applicable (“[a]n action must be prosecuted in the name of the real party in interest.”;). The standing doctrine “involves both constitutional limitations on federal-court jurisdiction and prudential limitations on its exercise.” Kowalski v. Tesmer, 543 U.S. 125, 128-29, 125 S. Ct. 564, 160 L. Ed. 2d 519 (2004) (quoting Warth v. Seldin, 422 U.S. 490, 498, 95 S. Ct. 2197, 45 L. Ed. 2D 343 (1975)).
Constitutional standing under Article III requires, at a minimum, that a party must have suffered some actual or threatened injury as a result of the defendant’s conduct, that the injury be traced to the challenged action, and that it is likely to be redressed by a favorable decision. (Valley Forge Christian Coll. v. Am. United for Separation of Church and State, 454 U.S. 464, 472, 102 S. Ct. 752, 70 L. Ed. 2d 700 (1982)(citations and internal quotations omitted)). Beyond the Article III requirements of injury in fact, causation, and re-dressability, the creditor must also have prudential standing, which is a judicially-created set of principles that places limits on the class of persons who may invoke the courts’ powers. (Warth v. Seldin, 422 U.S. 490, 499, 95 S. Ct. 2197, 45 L. Ed. 2d 343 (1975)). As a prudential matter, a plaintiff must assert “his own legal interests as the real party in interest”. (Dunmore v. United States, 358 F.3d 1107, 1112 (9th Cir. 2004), as found in FED. R. CIV. P. 17, which provides “[a]n action must be prosecuted in the name of the real party in interest.”)
In re Mitchell, Case No. BK-S-07-16226-LBR (Bankr.Nev. 3/31/2009)(At page 10) the Court found that “MERS does not have standing merely because it is the alleged beneficiary under the deed of trust. It is not a beneficiary and, in any event, the mere fact that an entity is a named beneficiary of a deed of trust is insufficient to enforce the obligation.” In In re Maisel, the Bankruptcy Court for the District of Massachusettes found that a lender did not have standing to seek relief from the automatic stay because it did not have an interest in the property at the time it filed its motion for relief. 378 B.R. 19, 22 (2007)

B. ARGUMENTS

  1. THE PROMISSORY NOTE EVIDENCES THE REAL PARTY IN
    INTEREST, AND THAT PARTY IS NOT MERS OR HSBC BANK NA
    Transfers of mortgage paper may be made outright (sale) or by pledge (as security for a loan to the transferor.). In either event, to perfect the transfer, the transferor should physically deliver the note to the transferee. Without a physical transfer, a sale of the note could be invalidated as a fraudulent conveyance (under Civil Code § 3440), and a transfer in pledge could be invalidated as an unperfected (under Com Code §§ 9313-9314). (California Mortgages and Deeds of Trust, and Foreclosure Litigation, by Roger Bernhardt, Fourth Edition, section 1.26) One without a pecuniary interest in the Mortgage Loan is not an oblige under the debt and, thus, has no legal standing to foreclose ab initio. (Watkins v. Bryant (1891) 91C 492, 27 P 77)
    The Note in this case is not a bearer instrument, but is an instrument payable to a specifically identified person. California Com. Code section 3109 states:
    (a)A promise or order is payable to bearer if it is any of the following:
    (1)States that it is payable to bearer or to the order of bearer or otherwise indicates that the person in possession of the promise or order is entitled to payment.
    (2) Does not state a payee.
    (3) States that it is payable to or to the order of cash or otherwise indicates that it is not payable to an identified person.
    (b) A promise or order that is not payable to bearer is payable to order if it is payable (1) to the order of an identified person or (2) to an identified person or order. A promise or order that is payable to order is payable to the identified person.
    (c) An instrument payable to bearer may become payable to an identified person if it is specially indorsed pursuant to subdivision (a) of Section 3205. An instrument payable to an identified person may become payable to bearer if it is indorsed in blank pursuant to subdivision (b) of Section 3205. A promissory note that is payable to a specifically identified person is not transferred merely by possession, instead, transfer requires that it be indorsed. California Com. Code 3201 states:
    (a)”Negotiation” means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.
    (b) Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.
    An endorsement is not made by purchasing a note, or by purchasing a debt, or by an assignment, instead, an endorsement is made by the signature of the specifically identified person to whom the note is owed. California Com. Code section 3204 states:
    (a)”Endorsement” means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (1) negotiating the instrument, (2) restricting payment of the instrument, or
    (3) incurring endorser’s liability on the instrument, but regardless of the intent of the signer, a signature and its accompanying words is an endorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than endorsement. For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument.
    (b)”Endorser” means a person who makes an endorsement.
    (c) For the purpose of determining whether the transferee of an instrument is a holder, an endorsement that transfers a security interest in the instrument is effective as an unqualified endorsement of the instrument.
    (d) If an instrument is payable to a holder under a name that is not the name of the holder, endorsement may be made by the holder in the name stated in the instrument or in the holder’s name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection.
    If one bought a note and intends to enforce it, but the note does not carry the endorsement of the payee, that person can bring an action in court to specifically enforce the right to an endorsement. Then, once that is done, the creditor can enforce the note against its maker. California Com. Code section3203 states:
    (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
    (b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.
    (c) Unless otherwise agreed, if an instrument is transferred for value and the transferee \ does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made.
    (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this division and has only the rights of a partial assignee.
    The promissory note in this case was made payable to Fremont Loan and investment Mortgage Corporation. No record document suggests that it has been indorsed to MERS or any other named entity. The Deed of Trust states that MERS is the beneficiary of it. No record document suggests that MERS transferred its beneficial interest in the Deed of Trust; however, record documents do suggest that other entities claim an interest in the Deed of Trust, one of which being the Certificateholders of ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates;.

  2. MERS HELD NO ENFORCEABLE BENEFICIAL INTEREST AND
    COULD NOT PASS ANY SUCH INTEREST TO HSBC BANK NA

HSBC’s interests – if any – flow from MERS interests. HSBC ignores the plain language of the mortgage that names MERS as a nominee:
(E) “MERS” is Mortgage Electronic Registration Systems, Inc. MERS is a separate corporation that is acting solely as a nominee for Lender and Lender’s successors and assigns. MERS is the mortgagee under this Security Instrument. (Attachment 1, Deed of Trust)
Therefore, if HSBC is going to demonstrate an equitable assignment of the note, it must first show that MERS had rights to the unindorsed Note which it could assign to HSBC. However, the terms and provisions of the MERS mortgage expressly refute the notion that MERS owned or held the note at inception. The mortgage was not countersigned by the original note holder/lender (Fremont) such as to give MERS any rights or interests in the note. As well the Note itself admits of no rights or interests in MERS. Only the Homeowner signed the mortgage and it is indisputable that she cannot award, grant or otherwise deign to transfer the rights of the obligee, the note holder, to another. Indeed, the mortgage granted no power or authority to MERS (a mere nominee holding only the lien, not the note) to sell or transfer the note or mortgage or to assign its duties as nominee.
Since the Note was not indorsed to HSBC, HSBC didn’t take the Note pursuant to negotiation under the UCC. That left HSBC with taking whatever rights MERS had by the Assignment of Mortgage from MERS to HSBC. MERS could not assign any greater rights to HSBC than MERS had.
In Carpenter v. Longan, 16 Wall. 271, 83 U.S. 271, 274, 21 L.Ed. 313 (1872), the U.S. Supreme Court stated “The note and mortgage are inseparable; the former as essential, the latter as an incident. An assignment of the note carries the mortgage with it, while an assignment of the latter alone is a nullity.”
An obligation can exist with or without security. With no security, the obligation is unsecured but still valid. A security interest, however, cannot exist without an underlying existing obligation. (Hensley v. Hotaling (1871) 41 C 22; Turner v. Gosden (1932) 121 CA 20, 8 P. 2d 505; Lee v. Joseph (1968) 267 CA2d 30, 72 CR 471) It is impossible to define security apart from its relationship to the promise or obligation it secures. (Civil Code §§ 2872, 2909, 2920; California Mortgages and Deeds of Trust, and Foreclosure Litigation, by Roger Bernhardt, Fourth Edition, § 1.11) The obligation and the security are commonly drafted as separate documents – typically a promissory note and a deed of trust. If the creditor transfers the note but not the deed of trust, the transferee receives a secured note; the security follows the note, legally if not physically. (Civil Code § 2936; Seidell v. Tuxedo Land Co. (1932) 216 c 165, 13 P.2d 686. Lewis v. Booth (1935) 3 C.2d 345, 44 P.2d 560) (endorsement of note transferred deed of trust). If the transferee is given the deed of trust without the note accompanying it, the transferee has no meaningful rights except the possibility of legal action to compel the transferor to transfer the note as well, if such was the agreement. (Kelley v. Upshaw (1952) 39 C.2d 179, 246 P.2d 23; Polhemus v. Trainer (1866) 30 C 685)
Consequently, when one transferee receives the note and another receives the deed of trust, the one holding the note prevails, regardless of who first received a transfer. Adler v. Sargent (1895) 109 C. 42, 41 P. 799. (California Mortgages and Deeds of Trust, and Foreclosure Litigation, by Roger Bernhardt, Fourth Edition, section 1.25)
Transfers of mortgage paper may be made outright (sale) or by pledge (as security for a loan to the transferor.) In either event, to perfect the transfer, the transferor should physically deliver the note to the transferee. Without a physical transfer, a sale of the note could be invalidated as a fraudulent conveyance (under Civil Code § 3440), and a transfer in pledge could be invalidated as unperfected (under Com Code §§ 9313-9314). (California Mortgages and Deeds of Trust, and Foreclosure Litigation, by Roger Bernhardt, Fourth Edition, section 1.26) One without a pecuniary interest in the Mortgage Loan is not an obligee under the debt and, thus, has no legal standing to foreclose ab initio. (Watkins v. Bryant (1891) 91C 492, 27 P 77)
“Where the mortgagee has ‘transferred’ only the mortgage, the transaction is a nullity and his ‘assignee,’ having received no interest in the underlying debt or obligation, has a worthless piece of paper.” (4 RICHARD R. POWELL, POWELL ON REAL PROPERTY, § 37.27[2] (2000); In re Mitchell, Case No. BK-S-07-16226-LBR (Bankr.Nev. 3/31/2009)(At page 12) MERS website admits at pages 10, 20, 22, 26, 34, 38, 40, 42, 44, 46, 62, 68, 72, 76, 78, 88, 89, 99:
MERS stands in the same shoes as the servicer to the extent that it is not the beneficial owner of the promissory note. An investor, typically a secondary market investor, will be the ultimate owner of the note. (fn)

Foot Note:
Even though the servicer has physical custody of the note, custom in the mortgage industry is that the investor (Fannie Mae, Freddie Mac, Ginnie Mae or a private investor) owns the beneficial rights to the promissory note.
In the consolidated cases of In re Foreclosure Cases, 521 F. Supp. 2D 650, 653 (S.D. Oh. 2007), a standing challenge was made and the Court found that there was no evidence of record that New Century ever assigned to MERS the promissory note or otherwise gave MERS the authority to assign the note. Beginning with this case, courts around the country started to recognize that MERS had no ownership in the notes and could not transfer an interest in a mortgage upon which foreclosure could be based. In LaSalle Bank NA v. Lamy, 824 N.Y.S.2d 769 (N.Y. Supp. 2006), the Court denied a foreclosure action by an assignee of MERS on the grounds that MERS itself had no ownership interest in the underlying note and mortgage. In the case of In re Mitchell, Case No. BK-S-07-16226-LBR (Bankr.Nev., 2009), the Court stated “In order to foreclose, MERS must establish there has been a sufficient transfer of both the note and deed of trust, or that it has authority under state law to act for the note’s holder.” The Court found that MERS has no ownership interest in the promissory note.
The Court found that though MERS attempts to make it appear as though it is a beneficiary of the mortgage, in fact it is not a beneficiary. The Court stated “But it is obvious from the MERS’ “Terms and Conditions” that MERS is not a beneficiary as it has no rights whatsoever to any payments, to any servicing rights, or to any of the properties secured by the loans. To reverse an old adage, if it doesn’t walk like a duck, talk like a duck, and quack like a duck, then it’s not a duck.” (At page 3 of the Deed of Trust) MERS Terms and Conditions say this:
TRANSFER OF RIGHTS IN THE PROPERTY
The beneficiary of this Security Instrument is MERS (solely as nominee for Lender and Lender’s successors and assigns) and the successors and assigns of MERS. This Security Instrument secures to Lender; (i) the repayment of the Loan, and all renewals, extensions and modifications of the Note; and (ti) the performance of Borrower’s covenants and agreements under this Security Instrument and the Note. For this purpose, Borrower irrevocably grants and conveys to Trustee, in trust, with power of sale, the following described property located in the County of ORANGE CA
In the case of In re Vargas, 396 B.R. 511, 520 (Bankr.C.D.Cal., 2008) , the Court stated: MERS is not in the business of holding promissory notes. Mers Inc. is an entity whose sole purpose is to act as mortgagee of record for mortgage loans that are registered on the MERS System. This system is a national electronic registry of mortgage loans, itself owned and operated by MERS, Inc.’s parent company, MERSCORP, Inc.)
In the case of In re Sheridan, Case No. 08-20381-TLM (Bankr.Idaho, 2009) MERS moved for relief from the stay. The Court stated that MERS “Counsel conceded that MERS is not an economic “beneficiary” under the Deed of Trust. It is owed and will collect no money from Debtors under the Note, nor will it realize the value of the Property through foreclosure of the Deed of Trust in the event the Note is not paid.” The Court stated “Further, the Deed of Trust’s designation of MERS as “beneficiary” is coupled with an explanation that “MERS is . . . acting solely as nominee for Lender and Lender’s successors and assigns.” The Court stated “Even if the proposition is accepted that the Deed of Trust provisions give MERS the ability to act as an agent (“nominee”) for another, it acts not on its own account. Its capacity is representative.”
In Landmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009), the Kansas Supreme Court extensively analyzed the position of MERS in relation to the facts in that case and other non-binding court cases and concluded that MERS is only a digital mortgage tracking service. The Court recited that MERS never held the promissory note, did not own the mortgage instrument (though the documents identified it as “mortgagee”), that it did not lend money, did not extend credit, is not owed any money by the mortgage debtors, did not receive any payments from the borrower, suffered no direct, ascertainable monetary loss as a consequence of the litigation and consequently, has no constitutionally protected interest in the mortgage loan.
Christopher L. Peterson, Associate Professor of Law, University of Florida, testified at a hearing before the U.S. Senate Committee on Banking, Housing, and Urban Affairs Subcommittee on Securities, Insurance, and Investment and stated:
MERS is merely a document custodian. . . . The system itself electronically tracks ownership and servicing rights of mortgages. . . . The parties obtain two principal
benefits from attempting to use MERS as a “mortgagee of record in nominee capacity.” First, under state secured credit laws, when a mortgage is assigned, the assignee must record the assignment with the county recording office, or risk losing priority vis-à-vis other creditors, buyers, or lienors. Most counties charge a fee to record the assignment, and use these fees to cover the cost of maintaining the real property records.
Some counties also use recording fees to fund their court systems, legal aid organizations, or schools. In this respect, MERS’ role in acting as a mortgagee of record in nominee capacity is simply a tax evasion tool. By paying MERS a fee, the parties to a securitization lower their operating costs. The second advantage MERS offers its customers comes later when homeowners fall behind on their monthly payments. In addition to its document custodial role, and its tax evasive role, MERS also frequently attempts to bring home foreclosure proceedings in its own name. This eliminates the need for the trust—which may actually own the loan—to foreclose in its own name, or to reassign the loan to a servicer or the originator to bring the foreclosure.
R.K. Arnold, Senior Vice President, General Counsel and Secretary of Mortgage Electronic Registration Systems, Inc., stated:
MERS® will act as mortgagee of record for any mortgage loan registered on the computer system MERS® maintains, called the MERS® System. It will then track servicing rights and beneficial ownership interests in those loans and provide a platform for mortgage servicing rights to be traded electronically among its members without the need to record a mortgage assignment in the public land records each time. . . . Members pay annual fees to belong and transaction fees to execute electronic transactions on the MERS® System. . . . A mortgage note holder can sell a mortgage note to another in what has become a gigantic secondary market. . . . For these servicing companies to perform their duties satisfactorily, the note and mortgage were bifurcated. The investor or its designee held the note and named the servicing company as mortgagee, a structure that became standard. . . . When a mortgage loan is registered on the MERS® System, it receives a mortgage identification number (MIN). The borrower executes a traditional paper mortgage naming the lender as mortgagee, and the lender executes an assignment of the mortgage to MERS®. Both documents are executed according to state law and recorded in the public land records, making MERS® the mortgagee of record. From that point on, no additional mortgage assignments will be recorded because MERS® will remain the mortgagee of record throughout the life of the loan. . . . MERS® keeps track of the new servicer electronically and acts as nominee for the servicing companies and investors. Because MERS® remains the mortgagee of record in the public land records throughout the life of a loan, it eliminates the need to record later assignments in the public land records. Usually, legal title to the property is not affected again until the loan is paid and the mortgage is released. (R.K. Arnold, Yes, There is Life on MERS, Prob.& Prop., Aug. 1997, at p.16; http://www.abanet.org/genpractice/magazine/1998/spring- bos/arnold.html)
Courts around this country are clearly recognizing that MERS is not an owner of the promissory note and that it is also only a mortgagee in name alone and has no beneficial interest in the mortgage instrument. Landmark National Bank v. Kesler, 216 P.3D 158 (Kansas, 2009); Mortgage Electronic Registration System, Inc. v. Southwest Homes of Arkansas, 08-1299 (Ark. 3/19/2009) (Ark., 2009)

III. ARGUMENTS

A. THE PLAINTIFF TRUST HAS NO STANDING TO FORECLOSE BECAUSE
THERE HAS BEEN NO VALID ENFORCEABLE ASSIGNMENT TO THE TRUSTEE
OF THE TRUST

A-1. The Plaintiff Trust Is A New York Common Law Trust Governed By New York
Law Based On Its Trust Agreement. HSBC BANK, USA, National Association, as Trustee, under the Pooling and Servicing Agreement dated August 1, 2006, ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates”), HSBC is not the originator of the mortgage, the servicer, or even a bank.
Instead, this entity is a New York common law trust created by an agreement known as “Pooling and Service Agreement.” Allegedly, the Defendant`s home loan, along with other loans, were pooled into a trust and converted into mortgage-backed securities (“MBS”) that can be bought and sold by investors — a process known as securitization. The underlying promissory notes of each and every mortgage held by the Trust serve as generate a potential income stream for investors. The Trust allegedly holding the Plaintiff’s note was created on or about February 1, 2006, and is identified as “HSBC BANK, USA, National Association, as Trustee, under the Pooling and Servicing Agreement dated August 1, 2006, ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates”. The Trust, by its terms, set a “closing date” of August 25, 2006 The terms of the Trust are contained in the Pooling and Servicing Agreement (“PSA” or the “Trust agreement”), which is an approximately 400-page document that creates the Trust and defines the rights, duties and obligations of the parties to the Trust Agreement. The PSA is filed under oath with the Securities and Exchange Commission and is attached to as an Exhibit 1. The PSA also incorporates by reference a separate document called the Mortgage Loan Purchase Agreement (“MLPA”). These various documents, and hence the acquisition of The Trust, being sued through its trustee, is a New York Corporate Trust formed to act as a “REMIC” trust (defined below) pursuant to the U.S. Internal Revenue Code (“IRC”). Pursuant to the terms of the Trust and the applicable Internal Revenue Service (“IRS”) regulations adopted and incorporated into the terms of the Trust, the “closing date” of the Trust (August 25, 2006) is also the “Startup Day” for the Trust under the REMIC provisions of the IRC. The Startup Day is significant because the IRC ties the limitations upon which a REMIC trust may be receive its assets to this date. The relevant portion of the IRC addressing the definition of a REMIC is: the mortgage assets for the Trust, are governed under the law of the State of New York pursuant to section 11.03 of the PSA .
(a) General rule. For purposes of this title, the terms ‘real estate mortgage
investment conduit’and ‘REMIC’ mean any entity—
(1) to which an election to be treated as a REMIC applies for the taxable year
and all prior taxable years,
(2) all of the interests in which are regular interests or residual interests,
(3) which has 1 (and only 1) class of residual interests (and all distributions, if
any, with respect to such interests are pro rata),
(4) as of the close of the 3rd month beginning after the startup dayand at all
times thereafter, substantially all of the assets of which consist of qualified
mortgages and permitted investments.
26 U.S.C.S. § 860D(emphasis added).
It is settled that the duties and powers of a trustee are defined by the terms of the trust agreement and are tempered only by the fiduciary obligation of loyalty to the beneficiaries (see, United States Trust Co. v First Nat’l City Bank, 57 A.D.2d 285, 295-296, aff’d 45 NY2d 869; Restatement [Second] of Trusts § 186, comments a, d). See In re IBJ Schroder Bank & Trust Co., 271 A.D.2d 322 (N.Y. App. Div. 1st Dep’t 2000)
Work here*********

26 U.S.C. 860G(d)(2) states:
(A) Any contribution to facilitate a clean-up call (as defined in regulations) or a qualified liquidation.
(B) Any payment in the nature of a guarantee.
(C) Any contribution during the 3-month period beginning on the startup day.
(D) Any contribution to a qualified reserve fund by any holder of a residual
interest in the REMIC.
(E) Any other contribution permitted in regulations.
The PSA (primarily in section 9.12) addresses these sections of the IRC by obliging the
parties to the Trust to avoid any action which might jeopardize the tax status of any REMIC
and/or impose any tax upon the Trust for prohibited contributions or prohibited transactions.
These PSA provisions are important to the court’s analysis of the facts in this case because of the
interplay between the New York trust law, the IRC’s REMIC provisions, and the PSA’s incorporation of the IRC REMIC provisions.
A-2. The Trust Instrument/PSA Sets Forth A Specific Time, Method And Manner Of REMIC after the startup day, there is hereby imposed a tax for the taxable year of the REMIC in which the contribution is received equal to 100 percent of the amount of such contribution.” 26 U.S.C. 860G(d)(2) states:
(2) Exceptions. Paragraph (1) shall not apply to any contribution which is made in cash and is described in any of the following subparagraphs:
(A) Any contribution to facilitate a clean-up call (as defined in regulations) or a qualified liquidation.
(B) Any payment in the nature of a guarantee.
(C) Any contribution during the 3-month period beginning on the startup day.
(D) Any contribution to a qualified reserve fund by any holder of a residual interest in the REMIC.
(E) Any other contribution permitted in regulations. The PSA (primarily in section 9.12) addresses these sections of the IRC by obliging the parties to the Trust to avoid any action which might jeopardize the tax status of any REMIC and/or impose any tax upon the Trust for prohibited contributions or prohibited transactions. These PSA provisions are important to the court’s analysis of the facts in this case because of the interplay between the New York trust law, the IRC’s REMIC provisions, and the PSA’s incorporation of the IRC REMIC provisions.
The Trust Instrument/PSA Sets Forth A Specific Time, Method And Manner Of The IRC also provides definitions of prohibited transactions and prohibited contributions which are relevant to this case as well. In the context of this case, the relevant statute is the definition of prohibited contributions which is as follows:
26 U.S.C. 860G(d)(1) states:
Except as provided in section 860G(d)(2), “if any amount is contributed to a Funding The Trust
The Trust seeking to foreclose on the Plaintiff has included in the terms of its Trust agreement (the PSA) a specific time, method and manner of funding the Trust with its assets.
The most critical time is the Trust’s closing date, August 25, 2006. According to the terms of
the PSA, all of the assets of the Trust were to be transferred to the Trust on or before the closing
date. This requirement is to ensure that the Trust will receive REMIC status and thus be
exempt from federal income taxation. Section 2.02(a) of the PSA provides for a window of 90
days after the Trust closing date in which the Trust may complete any missing paperwork or
finalize any documents necessary to complete the transfers of assets from the depositor to the
Trust.

B. THE TRUST AGREEMENT PROVIDES THE ONLY MANNER IN WHICH ASSETS
MAY BE PROPERLY TRANSFERRED TO THE TRUST AND ANY ACT IN
CONTRAVENTION OF THE TRUST AGREEMENT IS VOID

Thus, for an asset to become an asset of the Trust it must have been transferred to the
Trust within the time set forth in the PSA. The additional 90 days in the timeline requirement is
incorporated from the REMIC provisions of the IRC to provide a “clean-up period” for a REMIC
to complete the documents associated with the transfers of assets to a REMIC after the startup
day (which is also the Trust closing date). Therefore, according to the plain terms of the Trust
agreement in this case, the closing date/startup date was August 1 2006 and the last day for
transfer of assets into the Trust was August 25 2006.
B-1. Transfer of Assets to the Trust Pursuant to the Trust Instrument/PSA As a generic matter, there are several methods by which the underlying assets of the Trust, specifically the individual promissory notes, might be transferred or conveyed. A trust’s ability to transact is restricted to the actions authorized by its trust documents. In this case, the Trust documents permit only one specific method of transfer to the Trust. That method is set forth in Section 2.01 of the PSA:
http://www.secinfo.com/d12TC3.v1c4t.d.htm This date is defined in the Trust instrument at page 25 of 397 in exhibit 1. This requirement is found at Section 2.01
Pursuant to the Mortgage Loan Purchase Agreement, each Seller sold, transferred, assigned, set over and otherwise conveyed to the Depositor, without recourse, all the right, title and interest of such Seller in and to the assets sold by it in the Trust Fund…. In connection with such sale, the Depositor has delivered to, and deposited with, the Trustee or the Custodian, as its agent, the following documents or instruments with respect to each Mortgage Loan so assigned: (i) the original Mortgage Note, including any riders thereto, endorsed without recourse (A) in blank or to the order of “HSBC BANK, USA, National Association, as Trustee, under the Pooling and Servicing Agreement dated August 1, 2006, ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates,”or (B) in the case of a loan registered on the MERS system, in blank, and in each case showing an unbroken chain of endorsements from the original payee thereof to the Person endorsing it to the Trustee,

The analysis of this transfer language requires the court to consider each part. In the second
paragraph of the language in the Trust Agreement, the first statement is one of transfer, stating
“the Depositor has delivered to and deposited with the Trustee or the Custodian the following
documents”. The key document is the original mortgage note, which requires mandatory
endorsements found in this language: “the original mortgage note….endorsed without recourse” followed by two alternatives which are phrased in the either/or format. The first labeled “A” states “in blank or to the order of “HSBC BANK, USA, National Association, as Trustee, under the Pooling and Servicing Agreement dated August 1, 2006, ACE Securities Corp., Home Equity Loan Trust, Series 2006-FM1, Asset Backed Pass-Through Certificates.” The second possibility stated in “B” provides as the “or” proposition for transfer the following statement “in the case of a loan registered on the MERS system, in blank…” In each case, the affirmative language of the Trust agreement places a burden on the depositor to make a valid legal transfer in the terms required by the Trust instrument. The key language in the entire paragraph is the final statement trailing the “either/or” language of A & B which reads: “and in each case showing an unbroken chain of endorsements from the original payee thereof to the Person endorsing it to the Trustee”.
Stacked upon the top of this requirement of an unbroken chain of endorsements is the requirement of certification of the final contents of the collateral file for the benefit of the Trust.
This requirement is found at Exhibit 1 to the MLPA (Mortgage Loan Purchase Agreement),
which is an attachment to and incorporated as a part of the PSA in Section 2.01.
With respect to each Mortgage Loan, the Mortgage File shall include each of the
following items, which shall be available for inspection by the Purchaser or its
designee, and which shall be delivered to the Purchaser or its designee pursuant to
the terms of this Agreement.(a) The original Mortgage Note, including any riders thereto, endorsed without recourse to the order of “LaSalle Bank National Association, as Trustee for certificateholders of Bear Stearns Asset Backed Securities I LLC, Asset-Backed Certificates, Series 2006-EC2,”and showing to the extent available to the related Mortgage Loan Seller an unbroken chain of endorsements from the original payee
thereof to the Person endorsing it to the Trustee;

The foregoing requirement demonstrates clearly that while the parties to the securitization made
provisions whereby promissory notes for this Trust might be delivered in blank to the Trustee,
there were two requirements that were mandatory. First, all notes sold to the Trust were required
to have an unbroken chain of endorsements from the original payee to the person endorsing it to
the Trustee. This requirement stems from a particular business concern in securitization, namely
to evidence that there was in fact a “true sale” of the securitized assets and that they are in no
way still property of the originator, sponsor, or depositor, and thus not subject to the claims of
creditors of the originator, sponsor, or depositor.
Second, there was a requirement that ultimately, within 90 days of the Trust closing date,
the actual promissory note must be endorsed over to the trustee for the specific trust to
effectively transfer the asset into the trust and therefore make the Giannakakos promissory note Trust property. This requirement finds support in logic and law and is, in fact, the ancient and settled law of New York on this issue.
B-2. New York Law Governs The Mandatory Requirements To Effectively Transfer an Asset To A Trust It is not contested that securitization trusts, such as the defendant, are subject to the common law of New York. Conveyed to it, that –that the –that they will have the right to establish their ownership as investors in that collateral.
Second, there was a requirement that ultimately, within 90 days of the Trust closing date,
the actual promissory note must be endorsed over to the trustee for the specific trust to
effectively transfer the asset into the trust and therefore make the Giannakakos promissory note Trust property. This requirement finds support in logic and law and is, in fact, the ancient and settled law of New York on this issue.
B-2. New York Law Governs The Mandatory Requirements To Effectively Transfer
An Asset To A Trust It is not contested that securitization trusts, such as the defendant, are subject to the common law of New York. New York’s trust law is ancient and settled. There are
a few principles of New York Trust law that are particularly important to the analysis of
whether any particular asset is an asset of a given trust. Under New York law, the analysis of whether an asset is trust property is determined under the law of gifts. order to have a valid inter vivos gift, there must be a delivery of the gift (either by a In
7 As early as 1935, in Burgoyne v. James, 282 N.Y.S. 18, 21 (1935), the New York Supreme Court recognized that
business trusts, also known as ““Massachusetts trusts”,”are deemed to be common law trusts. See also In re Estate
of Plotkin, 290 N.Y.S.2d 46, 49 (N.Y. Sur. 1968) (characterizing common stock trust funds as ““common law
trust[s]””). Other jurisdictions are in accord. See, e.g., Mayfield v. First ’Nat’l Bank of Chattanooga, 137 F.2d 1013
(6th Cir. 1943) (applying common law trust principles to a pool of mortgage participation certificate holders).
8““In the case of a trust where there is a trustee other than the grantor, transfer will be governed by the existing rules
as to intent and delivery (the elements of a gift)””In re Becker, 2004 N.Y. Slip Op. 51773U, 4 (N.Y. Sur. Ct. 2004).

physical delivery of the subject of the gift) or a constructive or symbolic delivery (such
as by an instrument of gift) sufficient to divest the donor of dominion and control over the property and “what is sufficient to constitute delivery ‘must be tailored to suit the circumstances of the case’”. The delivery rule requires that “‘[the] delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit.’” “Under New York law there are four essential elements of a valid trust of personal property: (1) A designated beneficiary; (2) a designated trustee, who must not be the beneficiary; (3) a fund or other property sufficiently designated or identified to enable title thereto to pass to the trustee; and (4) the actual delivery of the fund or other property, or of a legal assignment thereof to the trustee, with the intention of passing legal title thereto to him as trustee.” There is no trust under the common law until there is a valid delivery of the asset in question to the Trust.
(see, Matter of Szabo, 10 N.Y.2d 94, 98-99, supra; Speelman v Pascal, 10 N.Y.2d 313, 318-320, supra; Beaver v.
Beaver, 117 N.Y. 421, 428-429, supra; Matter of Cohn, 187 App. Div. 392, 395) as cited in Gruen v. Gruen, 68 If the trust fails to acquire the N.Y.2d 48, 56 (N.Y. 1986).
10(Matter of Szabo, supra, at p. 98). 11 (id.; Vincent v Rix, 248 N.Y. 76, 83; Matter of Van Alstyne, supra, at p 309; see, Beaver v. Beaver, supra, at p 428) as cited in Gruen v. Gruen, 68 N.Y.2d 48, 56-57 (N.Y. 1986) . 12 Brown v. Spohr, 180 N.Y. 201, 209-210 (N.Y. 1904).13 Until the delivery to the trustee is performed by the settlor, or until the securities are definitely ascertained by the declaration of the settlor, when he himself is the trustee, no rights of the beneficiary in a trust created without consideration arise (cf. Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586; Matter of Gurlitz [Lynde], 105 Misc 30, aff’d 190 App. Div. 907, supra; Marx v. Marx, 5 Misc 2d 42) as cited in Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App. Div. 2d Dep’t 1978).

and Trusts Law (EPTL) section 7-2.1(c) authorizes investment trusts to acquire real or personal property “in the name of the trust as such name is designated in the instrument creating said trust.” Further, the actual contracts of the parties, which include the custodial agreements, the mortgage loan purchase agreements, and the trust instrument known as the “pooling and servicing agreement,” prescribe a very specific method of transfer of the notes and mortgages to the Trust. Because the method of transfer is set forth in the Trust instrument, it is not subject to any variance or exception.and Trusts Law (EPTL) section 7-2.1(c) authorizes investment trusts to acquire real or personal property “in the name of the trust as such name is designated in the instrument creating said trust.” Further, the actual contracts of the parties, which include the custodial agreements, the mortgage loan purchase agreements, and the trust instrument known as the “pooling and servicing agreement,” prescribe a very specific method of transfer of the notes and mortgages to the Trust. Because the method of transfer is set forth in the Trust instrument, it is not subject to any variance or exception.
14 In an action against the individual defendant as trustee, based on the theory of breach of fiduciary obligation, the The Trust documents require that the promissory notes and mortgages be transferred to the Trustee, which under New York trust law requires valid delivery. The question then arises — “What constitutes valid delivery to the Trustee?” property,then there is no trust over that property which may be enforced.14 An attempt to convey to a trust will fail if there is no designated beneficiary in the conveyance.15 In the context of mortgage-backed securitization, it is clear that registration of the notes and mortgages in the name of the trustee for the trust is necessary for effective transfer to the trust. Within the Statutes of New York governing Trusts, Estates Powers complaint was properly dismissed on the ground that he had acquired no title or separate control of the goods and, hence, there was no actual trust over the property to breach. Kermani v. Liberty Mut. Ins. Co., 4 A.D.2d 603 (N.Y. App. Div. 3d Dep’t 1957). 15 Wells Fargo Bank v. Farmer, 2008 N.Y. Misc Lexis 3248. 16Courts may neither ignore the actual provisions of transaction documents nor create contractual remedies that were omitted from the governing contracts by the contracting parties. See Schmidt v. Magnetic Head Corp., 468 N.Y.S.2d
649, 654 (N.Y. App.Div. 1983) (““It is fundamental that courts enforce contracts and do not rewrite them . . . An obligation undertaken by one of the parties that is intended as a promise . . . should be expressed as such, and not left to mplication.”” (citations omitted)); Morlee Sales Corp. v. Manufacturers Trust Co., 172 N.E.2d 280, 282 (N.Y.1961) (““[T]he courts may not by construction add or excise terms . . . and thereby ‘make a new contract for the parties under the guise of nterpret[ation].’““ (quoting Heller v. Pope, 250 N.E. 881, 882 (N.Y. 1928))

When the requirements of transfer to the trustee are viewed in the context of the corporate or business trust indenture, more information about compliance with these requirements becomes apparent. One must first understand that
“[t]he corporate trustee has very little in common with the ordinary trustee . . . .
The trustee under a corporate indenture . . . has his [or her] rights and duties
defined, not by the fiduciary relationship, but exclusively by the terms of the
agreement. His [or her] status is more that of a
trustee.”
Indeed, “[a]n indenture trustee is unlike the ordinary trustee. In contrast with the latter, some cases have confined the duties of the indenture trustee to those set forth in the indenture.” obligations are defined by the terms of the indenture agreement. Settled that the duties and powers of a trustee are defined by the terms of the trust agreement and are beneficiaries”. Take delivery in strict compliance with the terms of the PSA/Trust document. Further, given that New York Estates Powers and Trusts Law section 7-2.1(c) authorizes a trustee to acquire property “in the name of the trust as such name is designated in the a stakeholder than one of The indenture trustee, it has been said, resembles a stakeholder whose Moreover,“[i]t is tempered only by the fiduciary obligation of loyalty to the clear import of these cases and statutes is that the delivery of an asset to a trustee under the terms of a corporate indenture requires strict compliance with the mandatory transfer terms of the trust indenture. Thus the Trustee in this case can only
17 AG Capital Funding Partners, L.P. v. State St. Bank & Trust Co., 2008 N.Y. Slip Op. 5766, 7 (N.Y. 2008) 18Green v. Title Guarantee & Trust Co., 223 A.D. 12, 227 N.Y.S. 252 (1st Dept.), aff’d, 248 N.Y. 627 (1928); Hazzard v. Chase National Bank, 159 Misc. 57, 287 N.Y.S. 541 (Sup. Ct. 1936), aff’d, 257 A.D. 950, 14 N.Y.S.2d 147 (1st Dept.), aff’d, 282 N.Y. 652, cert. denied, 311 U.S. 708 (1940).19 See Meckel v. Continental Resources, 758 F.2d 811, 816 (2d Cir. 1985) as cited in Ambac Indem. Corp. v.
Bankers Trust Co., 151 Misc. 2d 334, 336 (N.Y. Sup. Ct. 1991).20see, United States Trust Co. v First Nat’l City Bank, 57 A.D.2d 285, 295-296, aff’d 45 NY2d 869; Restatement [Second] of Trusts § 186, comments a, d) as cited in In re IBJ Schroder Bank & Trust Co., 271 A.D.2d 322 (N.Y. App. Div. 1st Dep’t 2000).

Transfer instruments creating said trust property,” there should be little doubt that for transfer to a trustee to be effective, the property must be registered in the name of the trustee for the particular trust. Trust property cannot be, as the Plaintiff argues, held with incomplete endorsements and assignments that do not indicate that the property is held in trust by a trustee for a specific beneficiary trust. In fact, it is clear in the law of New York that an attempt to transfer to a trust which fails to specify both a trustee and a beneficiary is ineffective as a conveyance to the Trust. “The failure to name a beneficiary for the Trustee renders the assignment without merit.”This position is further supported logically in the common law of New York by the following propositions:
(2) The delivery necessary to consummate a gift must be as perfect as the nature of the property and the circumstances and surroundings of the parties will reasonably permit; there must be a change of dominion and ownership; intention or mere words cannot supply the place of an actual surrender of control and authority over the thing intended to be given. It is the consummation of the donor’s intent to give that completes the transaction. Intention alone, no matter how fully established, is of no avail
21 Wells Fargo Bank, N.A. v. Farmer, 2008 NY Slip Op 51133U, 6 (N.Y. Sup. Ct. 2008)
22(cf. Riegel v. Central Hanover Bank & Trust Co., 266 App. Div. 586; Matter of Gurlitz [Lynde], 105 Misc. 30, aff’d 190 App. Div. 907, supra; Marx v. Marx, 5 Misc 2d 42) as cited in Sussman v. Sussman, 61 A.D.2d 838 (N.Y. App. Div. 2d Dep’t 1978).
23Vincent v. Putnam, 248 N.Y. 76, 82-84 (N.Y. 1928).

without the consummated act of delivery. How could one logically argue that delivering a promissory note endorsed in blank (making it bearer paper) into a trustee’s vault is “delivery beyond the authority and control of the donor” when the vault is managed by the agent of the donor? If the donor were to claim that the promissory note “If the donor delivers the property to the third person simply for the purpose of his delivering it to the donee as the agent of the donor, the gift is not complete until the property has actually been delivered to the donee. Such a delivery is not absolute, for the ordinary principle of agency applies, by which the donor can revoke the authority of the agent, and resume possession of the property, at any time before the authority is executed.”” were its property, not the trustee’s, there would be no evidentiary basis for the trustee to claim ownership. Accordingly, New York law expressly requires that for property to be validly delivered to a trust, the property must pass completely out of the control of the donor (and its agents): Another case addressing this issue holds that “In order that delivery to a third person shall be effective, he must be the agent of the donee. Delivery to an agent of the donor is ineffective, as the agency could be terminated before delivery to the intended donee.”Trustees for securitizations often occupy many roles simultaneously and conflictingly both as document custodians and trustees for myriad thousands of securitizations as well as for various parties who are active in the securitization process including originators, servicers, sponsors and depositors. Accordingly, it is inconceivable that anything other than registration into “the name of the trust as such
Phillippsen v. Emigrant Indus.Sav. Bank, N.Y.S.2d 133, 137-138 (N.Y. Sup. Ct. 1948). (Beaver v. Beaver, supra, 117 N.Y. 421, 428, 22 N.E. 940, 941, 6 L.R.A. 403, Am.St.Rep. 531). See, also, Grant Trust & Savings Co. v. Tucker, 49 Ind. App. 345; Furenes v. Eide, 109 Ia. 511; Dickeschied v. Exchange Bank, W. Va. 340; Love v. Francis, Mich. 181; [**428] Merchant v. Building Co. [***15] , Ohio Circuit Ct. 190.) In re Nat’l Commer. Bank & Trust Co., 257 A.D. 868, 869-870 (N.Y. App. Div. 3d Dep’t 1939) citing Vincent v. Rix, supra v. Rix, supra; Bump v. Pratt, Hun, 201.

name is designated in the instrument creating said trust property” could ever qualify as delivery to any particular securitization trust. Absent such registration, there would be nothing that would indicate which of thousands of trusts in the care of a trustee a particular promissory note might belong to or if it were the personal property of the This point was recently slammed home to the public consciousness in a watershed decision out of the State of Massachusetts. On January 7, 2011, the Supreme Judicial Court of Massachusetts—the highest court in that state—rendered a unanimous verdict in a case captioned U.S. Natl. Bank Assn., Trustee, v. Ibanez, For ABFC 20050PT 1 Trust, ABFC Asset Backed Certificates, Series 2005-0PT 1, No. SJC-10694,
(Mass. Jan. 7, 2011).
While that ruling is of course not binding upon this court, it is very much contrary to the mortgage securitization industry’s position in cases involving the foreclosure of mortgage loans which have allegedly been securitized. The facts of the case in Massachusetts and the facts of this instant case are similar. The case was a ruling on two consolidated cases – both cases were filed by banks (as trustees for two separate trusts) to quiet title on properties they had foreclosed and purchased at the foreclosure sale to satisfy the mortgagor’s debt. The Massachusetts Supreme Judicial Court held that neither bank proved that its trust owned the mortgages when they foreclosed on the homes; therefore, neither had title to the foreclosed properties and that
their foreclosures were void. Effectively, this put the borrowers back into the place they were before the foreclosure. The Massachusetts Supreme Judicial Court did not tell the homeowners they are allowed to shirk their obligation to pay their mortgages, which are still outstanding, valid obligations. The Massachusetts Supreme Judicial Court did, however, sharply instruct the banks that they must have the proper documentation which demonstrates a valid right to foreclose before a foreclosure can be carried out. It is well worth noting the conclusion of the Massachusetts Ibanez opinion. The Massachusetts Supreme Judicial Court noted that “The legal principles and requirements we set forth are well established in our case law and our statutes. All that has changed is the [banks’] apparent failure to abide by those principles and requirements in the rush to sell mortgage-backed securities.” Just as the principles and requirements of Massachusetts law are well-founded, so too are those of New York law, and they should be upheld even if adherence to the law is inconvenient for banks rushing to sell mortgage-backed securities.

B-3 THE INTENT TO TRANSFER AN ASSET TO THE TRUST IS NOT A
TRANSFER TO THE TRUST

The contents of these statutes, cases and contracts lead to one inescapable conclusion: the intent of the parties and the requirements of the contracts were that the assets be conveyed to the Trusts by the Trust closing dates. For a transfer to any foreclosure industry has chosen to argue that it is clear that it was the parties’“intent” to transfer these assets and therefore “no court” would ever declare that these assets were not transferred to these trusts. The controlling law is overwhelmingly against the industry in this position. The failure to deliver the notes and mortgages to these trusts as required by the trust instruments is a default under the terms of every agreement that these parties executed, including their agreements for payment guarantees with the monoline bond insurers. The securitization industry chose to create its securitization trusts under New York law precisely because the law was ancient and settled.
Now that the actions of the foreclosure industry contradicts that law, parties such as the defendant trust are left to argue hope against precedent. The well-settled New York trust law
provides that “A mere intention to make a gift which has not been carried into effect, confers no right upon the intended beneficiary. There must be also delivery beyond the power of further control and dominion.” The foreclosure industry has chosen to argue that it is clear that it was the parties’“intent” to transfer these assets and therefore “no court” would ever declare that these assets were not transferred to these trusts. The controlling law is overwhelmingly against the industry in this position. The failure to deliver the notes and mortgages to these trusts as required by the trust instruments is a default under the terms of every agreement that these parties executed, including their agreements for payment guarantees with the monoline bond insurers. The securitization industry chose to create its securitization trusts under New York law precisely because the law was ancient and settled. Now that the actions of the foreclosure industry contradicts that law, parties such as the Plaintiff trust are left to argue hope against precedent. The well-settled New York trust law provides that “A mere intention to make a gift which has not been carried into effect, confers no right upon the intended beneficiary. There must be also delivery beyond the power of further control and dominion.” Equity will not help out an incomplete delivery. If the agent of the donor has failed to make the delivery expected equity will particular trust to be effective, there should have been a registration of the assets into
“the name of the trust as such name is designated in the instrument creating said trust property”—this is the only method by which these assets could have been “divested from the possession and title” of the donors. In response to the lucidity of the controlling law on this issue, the mortgage
(Vincent v. Rix, 248 N.Y. 76, 85 v. Rix, 248 N.Y. 76, 85; Matter of Green, 247 App. Div. 540; McCarthy v. Pieret,
281 N.Y. 407, 409.) as cited by In re FIRST TRUST & DEPOSIT CO., 264 A.D. 940, 941 (N.Y. App. Div. 4th Dep’t 1942)

not declare him a trustee for the donee. “Thus, Thornton on Gifts and Advancements (§140) notes: “In determining whether there has been a valid delivery, the situation of the subject of the gift must be considered. Thus if it is actually present, and capable of delivery without serious effort, it is not too much to say that there must be an actual delivery, although the donor need not in person or by agent hand the article to the donee, if the latter assumes the possession.”
There was absolutely nothing in the physical nature of the papers to be delivered in this case, or in the physical condition or the surroundings of the donor, that made a symbolical delivery necessary.”of the thing given has been very largely relaxed, but a symbolical delivery is sufficient delivery as nearly perfect and complete as the circumstances will allow.some cases have confined the duties of the indenture trustee to those set forth in the indenture. From this context springs the seminal rule of law that effectively causes the parties to the Trust agreement and the Trust to be “gored by their own bull”. New It is true that the old rule requiring an actual delivery only when the conditions are so adverse to actual delivery as to make a symbolical
Further, the failure to convey to a trust per the controlling trust document is not a matter that may be cured by the breaching party. New York law is unflinchingly clear that a trustee has only the authority granted by the instrument under which he holds, either deed or will. This fundamental rule has existed from the beginning and is still law. An indenture trustee is unlike the ordinary trustee. In contrast with the latter,
Vincent v. Putnam, 248 N.Y. 76, 82-84 (N.Y. 1928) In re Van Alstyne, 207 N.Y. 298, 309-310 (N.Y. 1913).31 In re Van Alstyne, 207 N.Y. 298, 309-310 (N.Y. 1913).
Allison & Ver Valen Co. v. McNee, 170 Misc. 144, 146 (N.Y. Sup. Ct. 1939).
Ambac Indem. Corp. v. Bankers Trust Co., 151 Misc. 2d 334, 336 (N.Y. Sup. Ct. 1991).

therefore, the trustees for these trusts may only acquire assets in the manner set forth in the trust
Instrument and may not acquire assets in violation of the trust instrument. To the extent that any
assets were not conveyed to these trusts as required and when required by the trust instrument,
they are not assets of the trusts and the trustee cannot correct this deficiency now since the funding period provided in the Trust instruments passed many years ago. The attempt to acquire
assets by these trusts which violate the terms of the Trust instrument are void. Therefore, late
assignments, improper chains of title, late endorsements, improper chains of title in the endorsements and the attempt to transfer to the trusts by foreclosure deed are just a number of
the many examples of actions which are void if taken by a party to the indenture who is attempting to transfer property to the Trustee for the Trust in violation of the trust instrument.

C. THE TRUST NEVER PROPERLY ACQUIRED THE MORTGAGE NOTE AND
THE TRUST CANNOT CURE ITS FATAL STANDING DEFECT

Therefore, the trustees for these trusts may only acquire assets in the manner set forth in the trust
instrument and may not acquire assets in violation of the trust instrument. To the extent that any
assets were not conveyed to these trusts as required and when required by the trust instrument,
they are not assets of the trusts and the trustee cannot correct this deficiency now since the
funding period provided in the Trust instruments passed many years ago. The attempt to acquire
assets by these trusts which violate the terms of the Trust instrument are void. Therefore, late
assignments, improper chains of title, late endorsements, improper chains of title in the
endorsements and the attempt to transfer to the trusts by foreclosure deed are just a number of
the many examples of actions which are void if taken by a party to the indenture who is
attempting to transfer property to the Trustee for the Trust in violation of the trust instrument. The assignment in herein attached was filed long after the form 15D was filed with the sec by the Plaintiff, the Trust was actually closed on the date that MERS signed the assignment to HSBC Bank NA. needs work here******

C. THE TRUST NEVER PROPERLY ACQUIRED THE MORTGAGE NOTE AND
THE TRUST CANNOT CURE ITS FATAL STANDING DEFECT

York’s law is so well-settled regarding the limitations of a trustee’s power to act that
New York’s Estates Powers and Trust Law Section 7-2.4 states: § 7-2.4 Act of trustee in contravention of trust If the trust is expressed in the instrument creating the estate of the trustee, every sale, conveyance or other act of the trustee in contravention of the trust, except as authorized by this article and by any other provision of law, is void.
Under New York law there is no trust over property that has not been properly transferred to a trust. The Defendant Trust stated to the U.S. Securities and Exchange Commission in filings
under oath that it has assets in excess of $400 million. To acquire assets, the Trust must be funded in accordance with the requirements of the PSA/Trust documents. The pertinent terms of the agreement are found at §2.01 (Conveyance of Trust Fund) of the PSA. This section details how the mortgage notes in the instant case were transferred from Fremont Loan and Investment. (as Originator) to Wells Fargo Bank NA. (and Master Servicer) to Ace Securities Corp Home Equity Loan Trust (the Depositor) to HSBC Bank NA (the Trustee). Ace Securities Corp Home Equity Loan Trust as the Depositor was required to deliver HSBC Bank NA the original mortgage note showing an unbroken chain of endorsements from the original payee to the person endorsing it to the Trustee.
The only assignment of the mortgage was signed by Denise Bailey for MERS nothing has been submitted by the Trust to the Court indicating that MERS ever assigned the mortgage to any other entity. Thus, based on the documents in this case, Fremont Loan and Investment, not HSBC Bank NA, is the mortgage holder.
HSBC does not have the authority to foreclose the mortgage, Deed of trust. And yet, there is no “showing” of an unbroken chain of endorsements in the documents provided to the Plaintiff. “According to the requirements set forth in the Trust Agreement I expected to see a series of endorsements of the promissory note reflective of each party who had an interest in the promissory note reflective of each party who had an ownership interest in the promissory note culminating with a blank endorsement from the depositor at the very minimum.” The Trust never possessed the mortgage note per the terms of the PSA (Pooling and Service Agreement). Further, in the PSA’s exhibits, Exhibit One sets forth the contents of the collateral file for each mortgage loan that is trust property and further includes a final specific endorsement to the Trustee for the specific trust in this case to effect a final transfer to the Trust and to make the Giannakakos promissory note trust property.
Any attempt by HSBC Bank NA, to transfer the promissory note to the Trust at this late date would fail for numerous reasons, not the least of which is that the closing date of August 25, 2006 passed nearly 6 years ago. By the terms of the Trust and the applicable provision of the Internal Revenue Code incorporated into and a part of the Trust agreement, the promissory note cannot be transferred to the Trust,. Work here*****

D. THE TRUST IS NOT ENTITLED TO THE MONEY SECURED BY THE GIANNAKAKOS MORTGAGE AND CANNOT FORECLOSE

Because the fact the fact that MERS transferred the loan and note after the closing date of the trust and the filing of the form 15D as evidence in the case is that the Giannakakos loan has never been conveyed to the Trust and a conveyance to the Trust at this time would be void as violating the terms of the PSA the Court is left with one clear and inescapable proposition: The Trust has never owned the Giannakakos promissory note and the Trust can never own the Giannakakos promissory note. Trust has not provided documentation to show that it was or is entitled to the money secured by the mortgage of Giannakakos property. “The Plaintiff Trust [HSBC] has offered no proof of ownership.

CONCLUSION

Based on the law, the terms of the Pooling and Service Agreement, the failure to show
the proper chain of endorsements, and the arguments contained herein, Defendant moves this Court to permanently deny HSBC from foreclosing on the property because they have failed to make the required showing that they are or ever were or ever could be the holder of the mortgage/Deed of Trust and promissory note.
WHEREFORE, defendant prays that this Court deny the plaintiff’s complaint, or alternatively, that all action by Plaintiff and any hearings by Plaintiff or motions be abated until such time as the Court determines additional facts.

RESPECTFULLY SUBMITTED,

DEMAND FOR JURY TRIAL

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About Here and Now

I rant about issues concerning foreclosure, real estate law and any topic of interest. Normally my day job is Fashion and Costume Design. I like writing and reading interesting subjects.
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One Response to Constitutional Standing under Article III, minimally, will require that a party, must, have suffered some actual or threatened injury as a result of the Defendants` conduct, that the injury be traced to the challenged action, and that it is likely to be redressed by a favorable decision, this Plaintiff cannot satisfy this basic element with lawful success, and the history of the Plaintiff in similar cases across the country also attests to the fact which the Defendant alleges “that the Plaintiff HSBC lacks standing”. Foreclosure agents and servicers must prove they have authority to act for a party that has standing. In re Scott, 376 B.R. 285 290 (Bankr. D. Idaho 2007); Kang Jin Hwang, 396 B.R. at 767; Jacobson, supra at 12.

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