Foreclosure Defense Florida


I have been hammering away especially over the last several weeks about the fact that possession and delivery of the original “blue ink” promissory note is absolutely essential in every foreclosure case. (There is an exception to the general rule that you need the original note, but for general discussion purposes, consider the general rule that requires the original note)

In order for a Plaintiff to state a claim for foreclosure, they must:

1) Be in possession of the promissory note, (with a limited exception) and;

2) they must be legally authorized to enforce the promissory note.

This means that even if a Plaintiff shows up in court with a blank endorsed promissory note, this is only the first step in a two step analysis. The second and the critical step is the Plaintiff seeking to enforce that note they possess must present properly authenticated evidence that they are legally authorized to be in possession of the note and that they have the right to enforce it.

But far too often, all of this is ignored.   Any old Plaintiff filing a foreclosure will in most cases get a judgment because the basic laws of standing and the Uniform Commercial Code are being flat out ignored.   This is entirely inexcusable anymore. You must read this long opinion in its entirety, it is a masterful treatment of the very basic elements of foreclosure that have been blown millions of times all across this country and continue to be blown in courtrooms every single day.

Read the opinion and pay particular attention to the discussion of what it means to be a “Holder” under the UCC.   This more or less destroys the whole servicer fiction.   I hesitate to break out any highlights from this opinion, because every word of it is important, but following are some of the key take aways:

  • The concept of a ” holder” is set out in detail in UCC § 1-201(b)(21)(A), providing that a person is a holder if the person possesses the note and either (i) the note has been made payable to the person who has it in his possession or (ii) the note is payable to the bearer of the note. This determination requires physical examination not only of the face of the note but also of any indorsements.
  • under the common law generally, the transfer of a mortgage without the transfer of the obligation it secures renders the mortgage ineffective and unenforceable in the hands of the transferee. Restatement (Third) of Property (Mortgages) § 5.4 cmt. e (1997) (” in general a mortgage is unenforceable if it is held by one who has no right to enforce the secured obligation”). As stated in a leading real property treatise: When a note is split from a deed of trust ” the note becomes, as a practical matter, unsecured.” Restatement (Third) of Property (Mortgage) § 5.4 cmt. a (1997). Additionally, if the deed of trust was assigned without the note, then the assignee, ” having no interest in the underlying debt or obligation, has a worthless piece of paper.”
  • (” 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.”); Orman v. North Alabama Assets Co., 204 F. 289, 293 (N.D. Ala. 1913); Rockford Trust Co. v. Purtell, 183 Ark. 918 (1931).
  • As a result, to show a colorable claim against the Property, Wells Fargo had to show that it had some interest in the Note, either as a holder, as some other ” person entitled to enforce,” or that it was someone who held some ownership or other interest in the Note. See In re Hwang, 438 B.R. 661, 665 (C.D. Cal. 2010) (finding that holder of note has real party in interest status). None of the exhibits attached to Wells Fargo’s papers, however, establish its status as the holder, as a ” person entitled to enforce,” or as an entity with any ownership or other interest in the Note.
  • AHMSI apparently conceded that Wells Fargo held the economic interest in the Note, as it filed the proof of claim asserting that it was Wells Fargo’s authorized agent. Rule 3001(b) permits such assertions, and such assertions often go unchallenged. But here the Veals did not let it pass; they affirmatively questioned AHMSI’s standing. In spite of this challenge, AHMSI presented no evidence showing any agency or other relationship with Wells Fargo and no evidence showing that either AHMSI or Wells Fargo was a ” person entitled to enforce” the Note. That failure should have been fatal to its position.
  • If, however, the maker pays someone other than a ” person entitled to enforce” ““ even if that person physically possesses the note the maker signed ““ the payment generally has no effect on the obligations under the note. The maker still owes the money to the ” person entitled to enforce,“ Miller & Harrell, supra, ¶ 6.03[6][b][ii], and, at best, has only an action in restitution to recover the mistaken payment. See UCC § 3-418(b).

Read the full opinion below:



  • Bob Hurt says:

    Let us not forget the importance of a digital microscope in examining the front and back of the alleged “original.” LPS and DocX made a bundle selling new “originals” to foreclosure plaintiffs. Malcolm Doney carried the microscope around with him to inspect “originals” for forgery while waiting for docket soundings in the 20th Circuit.

  • Bob Hurt says:

    Furthermore, let us realize that this case should NEVER have made it to the US 9th Circuit Bankruptcy panel. The Superior Court should have thrown out the foreclosure. I don’t know the details, but if the Veals had the money to take the matter to bankruptcy and then to appeal, they must have had the money to challenge the foreclosure with a Quiet Title action in Superior Court. Had they done that, and had the Superior Court dealt with the same standing issues, the Veals would not have had to declare bankruptcy.

    We must wonder what motivates state court judges to do such a shoddy job of demanding proof of standing. In judicial foreclosure states like Florida, the clerk could and should catch most of the foreclosure complaint errors, and inform the judge of them for an immediate dismissal with prejudice and associated sanctions or criminal charges against the plaintiffs and attorney for fraud on the court and perjury.

    • Stuart says:

      SIR: PERHAPS your court is like ours. They do care about the law, they give the bank the house no matter what proof is submitted. No. It’s better to avoid the Superior Courts in some places. In our courts, as many know, 1Marin County, California, “the law” does not overide the banks influence or ownership of our courts As a matter of fact, the law has very little to do with the courts of California. Ask around. Here, whoever has the most money wins. In most people’s lives that is the very banks which gave us the fraudulent, predatory loans designed to foreclose. As the set up “MERS” in the 1990s, so it appears they set up the courts for their self-interest as well.

  • Mike Hansen says:

    I sure agree with Bob. In almost every case I’ve investigated, the Note is a counterfeit, color,
    photocopy, and I didn’t even need my microscope to figure that out. All I had to do is
    feel for ridge marks on the opposite side of the page where the maker was alleged to have signed. It’s as smooth as a baby’s butt! Then with
    an “original yellow magic marker” I test for the
    presence of “blue ink”. Negative!
    It is mind blowing to see all these counterfeit
    Notes being accepted into evidence. Most attorney’s never check the Notes nor raise this issue. This is how I have gotten many dismissals
    for pro se litigants, by pointing this out to them
    and having them raise the issue with the Judge.
    This is not “rocket science”. So why don’t more
    attorney’s do it?

    • Laurrelle says:

      URGENT! I have a court case tomorrow (Jan 11, 2012); the judge ordered the original note to be produced .. opposing counsel showed it to me yesterday but wouldn’t let me hold it; kept it 4 feet away from me and kept the lights down in the room. I felt for the “ridges” you mentioned and didn’t feel them. What is the yellow marker test and how can I use it in the courtroom tomorrow. Or, do you know an expert in Denver who can appear and test it in the courtroom? My whole case and saving my home depends on this!

  • Great case – we need more of these to try to get at the truth – WHO OWNS THE DARN LOAN? WHO HAS THE LEGAL RIGHT TO ENFORCE IT. AND WHY ARE THEY NOT IN COURT?

    Keep up the good work!

    Steve Vondran

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