Sunday, June 28, 2015
The New York law of Trusts states expressly that transactions in violation of the Trust governing documents are void. Most Courts do not analyze the the trust documents and simply say that the mortgagor is not a party tovthe PSA and therefore cannot enforce the terms of the PSA. Those Courts that do lookvfurther into the issue, eventually say that the beneficiaries can ratify the conduct of the Trustee and therefore the failure to comply with yhe PSA renders the transactions merely voidable. However if one reads the PSA the PSA expressly prohibits the trust from taking any action that would render the trust subject to a tax or invalidate the REMiC. As such yhe beneficiaries can not ratify these acts or transactions. In yhe alternative, shouldn't the Platiff trust be required ro demonstrate thst the beneficiaries actually ratified the act or transaction.