Foreclosure Defense FloridaGeneral Information

X Marks The Spot- Our Next Battleground, The Spot Where Millions of Homeowers Lose Their Homes….

banks-steal-homesThe fraudclosure industry has asked our court systems to accept an absurd argument of law which holds that a million dollar home can be taken from a homeowner over a simple squiggle, an “X” or any old stamp, mark, or blotch.

To support this argument, they first needed to convince the courts that mortgage promissory notes are negotiable instruments.   But here’s the thing.   MORTGAGE PROMISSORY NOTES ARE NOT NEGOTIABLE INSTRUMENTS.

Now there are a handful of appellate court cases which make gratuitous statements like, “The note is negotiable”, but there is only one opinion when an appellate court in Florida actually analyzed the operative language in a purported instrument, compared it with the clear language of statute and, guess what?


The case is GMAC v. Honest Air. Now, when the Second DCA gets around to looking at the standard promissory note that is common in the vast majority of foreclosure cases, they are going to really struggle to excuse the notes from the fact that they are not negotiable!

This will be a sea change for all our courts to wrap their collective judicial minds around, but it’s frankly pretty simple stuff. Just print out the statute, highlight each provision of a note that falls within the specific exclusion of the operative statutory language and you’ll see that the note isn’t even close to being a negotiable instrument.   And when the opposing side or the court quote opinions for the proposition that they are, remind them that NONE OF THOSE CASES SPECIFY THE DOCUMENT IN QUESTION AND NONE OF THOSE CASES PROVIDE ANY ANALYSIS.

We need to first brief a trial court on the specific note and the allegations, then we need an appellate court to engage in the same detailed analysis of the statute and note itself.   If the courts do this, they will find that a note is not negotiable.

The fallout from the false argument that notes are negotiable is evident all around.   It is found most especially with foreclosure mills waving around original notes that are “endorsed” with an illegible scribble who scream, “We’ve got an endorsed note your honor, case closed!”. Read Stopa’s post here

But that’s just wrong, a simple squiggle cannot be all that’s necessary to take a homeowner’s home away from them….and it’s not.   The banks never intended these notes to be negotiable…it did not serve their interests.   The banks specifically intended the notes to be transferred under Article 9…..that means they were transferred via Assignment, that carried with it the mortgage and the terms and conditions of the operative Pooling and Servicing Agreements….just read the agreements, it says so in black and white.

So why has this False Flag of Negotiability been planted and why does it wave? Because we have not done our job to challenge it.

But now is the time.   Strap on the boots and Join Me At Max Gardner’s Boot Camp on Negotiability!


  • triumphant says:

    If mortgage notes are negotiable instruments that can be enforced by a lying thief, then TILA and RESPA and a whole host of other mortgage-related consumer protection regulations are GUTTED – and THAT is exactly what the banking and mortgage securitization want.

  • triumphant says:

    doah. That should have been, “and THAT is exactly what the banking and mortgage securitization INDUSTRY wantS.”

  • Attorney Wendy Alison Nora says:

    I beg to disagree with the analysis that UCC Article 9 applies to mortgages. The banks cannot create by contract what the law does not allow. “Intent to transfer” real estate interests via the UCC does not transfer interests in land. We have to stop accepting any portion of the business fraud model as it morphs into more creative frauds when put to the test. Whatever the Pooling and Servicing Agreement say, or the mortgage itself for that matter, such a contract does not create an interest in lands per the Statute of Frauds.
    UCC Article 9 applies to secured personal property. Real estate transactions are governed by the Statute of Frauds. The party taking an interest in real property must be identified in writing. “Blank” cannot own land and squiggle transferring a mortgage note to “Blank” does not create the requisite writing to transfer an interest in real estate to “Blank.” The UCC and real property law are in conflict here because the UCC was never intended to apply to real estate and expressly does not do so. (Read the definitions.)
    The courts bent over backwards in the past to allow for the production of documents to make it appear that the foreclosing entity had the right to foreclose. To a large extent, the unintended consequence of the courts holding the issue of standing open for several attempts to “produce” the requisite documents was the creation of forged endorsements on billions of dollars worth of mortgage notes and the corresponding falsely created mortgage assignments. The Balderama case appears to test the limits of repetitive creation of forged and fabricated documents. Can the banks, through their law firms, get up to three chances to establish the identity of the party claiming an interest in real estate? The cases which hold that the mortgage follows the note were cases in which the parties to the debt obligation were identified. There, the mortgage note created the writing required by the Statute of Frauds. But endorsement in blank, which is usually a forgery, fails to provide the requisite identity of the party entitled to take title to land via foreclosure proceedings, sale, gift, inheritance or any other transaction upon which land may be lawfully transferred. Then, there must be proof of delivery of the writing to the party claiming the interest in the land and the writing must be recorded to create a priority interest in land.
    After one gets through proving that the mortgage note is not a negotiable instrument under the UCC, then one goes to the mortgage assignment. We are now finding that the mortgage assignments are almost always created later than the closing date of the securitized trust to which the assignment is now purported to be made on a mortgage. The standard transaction is that the Lender (owner of the mortgage note) first merely nominated MERS as mortgagee and then traded the mortgage note as commercial paper, separately from the mortgage. The mortgage note is often endorsed to “Blank” via squiggle on a mortgage note via a rubber stamp to the Trustee. The claim that the mortgage loans (mortgage note and lawful assignment of mortgage) belongs to Trustee of the securitized trust is relatively new in my the venues where I practice, because MERS was foreclosing in its own name, having never loaned the homeowner anythings and having no ownership interest in the debt upon which the lands were sought to be foreclosed. For the first several years of the scheme to take US homes used MERS. MERS now admits that it has no ownership interest in the mortgage notes. It was merely the nominee for the note owner on the mortgage security. Again, if MERS had no interest in the debt obligation, how could it claim to assign anything? We must rely on the Statute of Frauds because we are dealing with interests in lands.
    It is my conclusion that the debts upon which homes are being taken is, at most, unsecured, if the debt can even be proved. If, when confronted with the fact that original mortgage note is not in the loan file, the bank’s document mills produce a forgery, that should be the end of the civil case and the beginning of a criminal case.
    In fact, the nomination of MERS for a note owner was never an effective lien on the land once the note was transferred from the original Lender. Many original notes were destroyed and are now appearing on bright, white paper with iridescent blue ink signatures purporting to be the signature of the obligor. In Wisconsin, blue ink was not used in real estate closings. In their effort to forge replacement notes all over the nation, the bank document mills made a critical mistake. Every original mortgage note must be subjected to scientific examination and testing. In most cases, the paper is too new and the signatures of the obligors have been created by photo-shop technology. It is quite easy to extrapolate that billions of dollars of forged mortgage notes are being circulated. The uttering of billions of dollars of forgeries will continue until law enforcement seizes the forgeries and subjects the forgeries to scientific testing. Otherwise, each homeowner must have the purported original note scientifically examined and tested. Few homeowners can afford that expense in an individual case, but some can.
    It is axiomatic that forged documents cannot be used to transfer interests in real estate. This is the type of fraud amazingly contemplated by the ancient (1671 C.E.) Statute of Frauds requirement that transfers interests in land must be in writing executed by the obligor in favor of an IDENTIFIED party.
    When MERS crashed under pressure to expose the real party in interest and revealed the securitization trusts, MERS changed its “rules.” What a private computer data base declares its rules to be is not binding on the courts, but its interesting that MERS thinks that only the note OWNER can transfer a mortgage out of MERS. (MERS Rule 8.) This is evidence of the desperate search for the OWNER of the mortgage note, many of which are in bankruptcy proceedings and cannot transfer assets without an order of the bankruptcy court. My view is that the owner of the note is the party to whom the note was given due its nonnegotiability (other terms of the performance of the obligation are in a separate writing) and the mortgage belongs to the last note owner identified by the mortgage, e.g. the original Lender (often a bankrupt or no longer existing entity.)
    Please don’t give the banks the Veal case argument that UCC 9 applies to real estate. We have to unwind these transactions and not succumb to the displacement of the Statute of Frauds by the inapplicable UCC. All we get then is more Balderama’s in which the banks continue to fabricate more and more documents. When are there too many sets of forged documents and fabricated documents? The answer is that once is sufficient. We find them at least twice (depending on when the documents were created) and I have cases in there are three different sets of documents being produced to the courts in photocopy format.
    In the perfect case from an evidentiary point of view, the homeowner has to get the claimed “original” mortgage notes, mortgages and assignments of mortgages to a document examiner to demonstrate they are forgeries or fabrications in violation of the Statute of Frauds. Under the rules of evidence, the burden of proof of forgery and fabrication of false documents (crimes) too easily shifts to homeowner. Mere legal argument appears to be insufficient without recourse to the applicable law: the Statute of Frauds.
    Here is the Wisconsin Statute of Frauds, for example.
    Wis. Stats. sec. 706.02 provides:
    706.02 Formal requisites. (1) Transactions under s. 706.01 (1) shall not be valid unless evidenced by a conveyance which:
    (a) Identifies the parties; and
    (b) Identifies the land; and
    (c) Identifies the interest conveyed, and any material term, condition, reservation, exception or contingency upon which the interest is to arise, continue or be extinguished, limited or encumbered; and
    (d) Is signed by or on behalf of each of the grantors; and
    (e) Is signed by or on behalf of all parties, if a lease or contract to convey; and
    (f) Is signed, or joined in by separate conveyance, by or on behalf of each spouse, if the conveyance alienates any interest of a married person in a homestead under s. 706.01 (7) except conveyances between spouses, but on a purchase money mortgage pledging that property as security only the purchaser need sign the mortgage; and

    (g) Is delivered. Except under s. 706.09 , a conveyance delivered upon a parol limitation or condition shall be subject thereto only if the issue arises in an action or proceeding commenced within 5 years following the date of such conditional delivery; however, when death or survival of a grantor is made such a limiting or conditioning circumstance, the conveyance shall be subject thereto only if the issue arises in an action or proceeding commenced within such 5-year period and commenced prior to such death.
    (2) A conveyance may satisfy any of the foregoing requirements of this section:
    (a) By specific reference, in a writing signed as required, to extrinsic writings in existence when the conveyance is executed; or
    (b) By physical annexation of several writings to one another, with the mutual consent of the parties; or
    (c) By several writings which show expressly on their faces that they refer to the same transaction, and which the parties have mutually acknowledged by conduct or agreement as evidences of the transaction.

  • Attorney Wendy Alison Nora says:

    “So why has this False Flag of Negotiability been planted and why does it wave? Because we have not done our job to challenge it.”
    We have used case law applying the UCC to real estate transactions when the UCC does not apply to real estate transactions.
    Much of that case law was developed when pro se homeowners were winning cases by attacking the mortgage notes as negotiable instruments. It was always the wrong theory. We erroneously conceded the battleground to the UCC via sporadic case law (as in Veal) and failed to find the answer which always lay in the Statute of Frauds.
    We have taken the false proofs of ownership (forgeries,) holding (perjuries/false swearing) and delivery (by lack of any proof or by perjury/false swearing) from the realm of negotiable instrument law and have not applied the Statute of Frauds.

  • Attorney Wendy Alison Nora says:

    CORRECTION:Whatever the Pooling and Servicing Agreement say, or the mortgage itself for that matter, such a contract does not create an interest in lands per the Statute of Frauds.
    THIS SHOULD HAVE READ: Whatever the Pooling and Servicing Agreement SAYS, or the mortgage NOTE itself for that matter, such a contract does not create an interest in lands per the Statute of Frauds.
    My apologies for leaving out the qualification. The note OWNER has to come forward. BLANK cannot own lands. This is back to Attorney Weidner’s oft repeated point on LEGAL CAPACITY. Ownership of land by BLANK is not recognized in the law. MERS was an attempt to cover the identity of BLANK.

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