Defenses Against Claims of Holder in Due Course


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by John Gault

Real Defenses
Real or universal defenses are valid against all holders, including HDCs. Universal defenses include the following:

(1) Forgery,

(2) Fraud in the execution,

(3) Material alteration (complete defense against a holder, partial defense against an HDC),

(4) Discharge in bankruptcy,

(5) Minority,

(6) Illegality (when statute makes it void),

(7) Adjudicated Mental Incapacity, and

(8) Extreme Duress.

Each of these is pretty much self-explanatory except number two, fraud in the execution.

Fraud in the execution occurs when a person is deceived into signing a negotiable instrument believing that he is signing something other than a negotiable instrument. This defense cannot be raised, however if a reasonable inquiry would have revealed the nature and terms of the instrument. Thus, the signer’s age, experience, and intelligence are relevant.

Personal Defenses

Personal defenses are used to avoid payment to an ordinary holder of a negotiable instrument. Personal defenses are:

(1) Breach of contract or breach of warranty,

(2) Lack or failure of consideration,

(3) Fraud in the inducement,

(4) Illegality (when statute makes it voidable),

(5) Unadjudicated mental incapacity,

(6) Other defenses.

Imo, there are two very important things we need to fully understand to defend our homes: the UCC and the laws of evidence. The UCC may provide avenues of discovery, as well as reasonable argument that without that discovery, adjudication just can’t be made.

The laws of evidence will help us get meaningful discovery, and not allow the use of bs declarations / affidavits. To date, none or most of us have availed ourselves of these avenues I would call bright.

There is something about ‘assumed risk’ as an affirmative defense which I can’t find right now, so the ones listed above must not be inclusive and most of them don’t seem to apply, anyway, except maybe nos. 2 and 4 and whatever 6 is under personal defenses.

More of the UCC at

The UCC cited is under article 3 and is relevant to negotiable instruments. But I can’t help remembering those 2 cases I have somewhere wherein the banksters claimed these notes are not negotiable instruments. Fwiw, I’ll link them when I find them.

The UCC imo provides defenses to foreclosure and to my knowledge, no one, including attorneys, is ‘going there’.
If you find a link to better defenses to notes, I would appreciate it since mine are whoknowswhere.

Part of what I’m trying to say is that there are defenses available against a holder v a hidc (I thought there were none available against a hidc, but apparently that’s not true, altho there are many more available against a ‘mere’ holder. In order for a homeowner to properly allege those defenses, one has to know if they’re available and therefore we have a need to know clearance on if the bankster is a holder or a holder in due course. Unfortunately, the UCC has some complicated tenets and one has to keep them all in mind. And btw, I have NO doubt changes to the UCC have been made in recent years which benefit the banksters. No surprise there, right?
Also, it appears to me and I’ve said before that enforcement of a note is either 1) unavailable to one who has paid nothing for it or 2) unavailable except to the extent (dollar amt) one has already paid for it (promise to pay does not cut it for ENFORCEMENT). This is grand, but it’s also a really bum steer if not true, so if anyone knows otherwise, please weigh in. It does seem to conflict with other UCC
rules, so it’s complicated. I’ll bet there’s reconciliation; I just don’t know it. I’m just saying as emphatically as I can it’s past time to quit ignoring what could be fully dispositive issues.

38 Responses

  1. Corruption fraud where HDC status is used to perpetuate the fraud makes all the difference in good faith that is entitled to use legal or equity courts for relief/remedy. Unclean hands used to be an important part of valid law that held some measure of admiration and respect entitled to the honor in which it was held. That intangible principle long ago was dumped in favor of predatory profits as not lucrative enough to remain as a fundamental core of securitization law.

  2. Here is the link to the WA AG amicus brief in Bain. He stops short of calling MERS a racket, altho he describes some racket-acts in a rather low profile manner. He seems to have a particular strategy. I hope. Dinsfla posted this:

    Oral argument is on March 15th. I forget the time. You can find it at WA SC’s website. MIght be 1:30 and it’s consolidated with another case. I found this looking for Vinluan v Fidelity Nat’l Title, which I still haven’t found and really want. Also want more pleadings from Bain. Anyone?
    It looks like we can watch the proceeding live. There is a link somewhere at the SC’s website. Marketh your calendars!

    There are 3 certified questions before the WA SC. One of them is if MERS may be named a ben in WA dots pursuant to a particular WA
    statute mol. I would have made diff arguments against, but they didn’t ask me, and as I said, the AG may have his own strategy.

  3. @katheryn – what I meant was if the bankster after you is a stranger, and thus not connected to the origination of your loan, they can’t owe you a duty of gf and fd – no contract for that to apply. But one can say if they ARE connected as they are swearing they are, they owe you a duty of gf and fd and that has not been demonstrated. If one owes another a duty of gf and fd, what is the ramification when gf and fair dealing are withheld? I think this is something worth looking into, because my experience has shown me that we have to hammer everything we can and not hammering ends up working against us.
    There must be case law on it, but I have never pursued it.

    A dot trustee has a particular duty of gf and fd, if not fiduciary, and btw, I see that since 2008, the banksters have been busy getting
    numerous laws past which 86 the dot trustee’s fiduciary to anyone.
    Recited now as duty of gf and fair dealing to the other parties. (Like that’s happening)
    Saw it in NV in 2009 and somewhere else in 2008. This of course really torks me – should tork everyone. But I think if the dot were dated prior to those bankster-insprired changes to legislation, the dot trutsee may not now rely on them.

  4. Hey Enraged I think I might see what you are trying to say to me .Let me do a little digging and I will try my best to come up something that will be helpful.I’m very slow at typing so please give me a little time ,A day or so thanks.

  5. @ needscaselaw

    Are you registered with PACER? You can find any case there including mine and the charge is very cheap. They bill you quarterly and I only end up paying a few bucks per quarter to monitor my own cases of what is filed or to research. My email: I have never gotten any weird email the few times I have made it public.

  6. johngault and Katheryn – First I appreciate you both. You’re sharing knowledge/insights here that can and do benefit us all. johngault, you mentioned an amicus by the Washington AG. Do you have any more of an id on that? My case is in Washington and would love to see it – and the case.
    Katheryn: johngault mentioned your Complaint – is there anywhere that it can be viewed? For both of you, I have an article on the history of securitized mortgage fraud in the State of Washington. I’ve not posted it here as it’s part of a piece I’m working on publishing. I’ll send you the pertinent chapter (Washington Supreme Court addressing paying the wrong party) if there’s a way to get it to you without publishing your email here.

  7. @ Trespass, WordPress is finicky. Over a couple of links and it will kick it into the dreaded awaiting moderation thing. And Neil doesn’t seem to watch over this site, so as to “unstick” someone’s post.

    If this is what happened to you, simply post links in lesser amounts into more posts.

  8. @ToddHess,

    Wrong. Never used my house as an ATM. My (self-employed) income got slashed by half and, like many others, I no longer could afford my mortgage payment. I went through every single hoop, tried the mod (got rejected three times because I wasn’t behind), liquidated my pension plan while waiting things out, hoping the economy would “turn around”, lost pretty much everything and had to make a decision: keep paying and fall further behind or get legal representation, go on the attack before the bank decided to foreclose and invest my mortgage money into that fight.

    I may very well lose in the end, although it is not the idea, but like everyone here, I’m fighting. The thing is: people on this site care about each other. When we read completely incoherent posts, we know that it is because some of us do become despondent. We’ve lost a few people who were losing it a little more every day and we all worry about them. What I find objectionable is to put out posts implying that you’re about to commit suicide or to send desperate SOS posts and resurface a few days later as though nothing is wrong and everything is peachy. You’re going through tough times, I get it. But when you declare that you “sold” all that fraud and you don’t approach your AG about it, it is wrong. If you’re able to recognize what you did (probably unknowingly and we’re not here to judge you anyway), it means that you know certain things that need to be brought out in the open.

    When we ask you what you mean by having “sold all that fraud” and you ignore our question, it is wrong. What you don’t seem to realize is that, if you can explain to us how you participated in creating that mess affecting everyone, it might help one of us redefine what his/her case is all about.

    So, you sold that fraud, you committed fraud on many people, ok. I get it. What is it you did exactly? How? Who did you work for? There may be names of players we know nothing about but someone here has in his file. You may have information helpful to someone.

    That’s all I had to say.

  9. @Joanne

    Short answer for you back at article “Nancy Drew Digs into Wells Fargo…”

  10. Rapidly changing CA law

    I just read a tentative ruling from NorCal where borrower challenged standing of lender as HIDC and lender’s demurrer for lack of tender was overruled.(see Lona v. Citibank).

    This ties nicely with the recent Calvo v HSBC decision where deeds of trust loans do not have to be recorded in order to invoke power to foreclose. The lenders have been relying solely on RJN of assignments to claim HIDC status. Calvo neatly nullifies that presumption since any number of assignments can exist that are not recorded which could affect chain of HIDC. To this pro se, it seems to mean to me that the lenders now have to go the extra mile to declare under penalty of perjury their HIDC status, and proffer real documents or forever hold their peace.



  12. My comments are being filtered for some reason.
    go to and find the Feb 15th article about Money, Banking, and the Federal Reserve and click Mises
    I downloaded the 41 minute video as mp4 rather than watch it online.
    go to google and search for Ten Things Every American Should Know about the Fed.
    I keep trying to post this info and it’s not posting, it’s not showing it’s held for moderation, but if I try to post it again it says duplicate post.
    Oh well. The world is changing.
    We point to all the low lying dealers when there is the enabler.
    At the top of the program is someone orchestrating this and guiding each layer of the system.
    The people are sovereign. No one group should be provided with unencumbered access to our wealth and then decide whether we can access it, when we can access it, what we can use it for, and at what cost.
    This country abolished slavery, peonage, involuntary servitude via the 13th Amendment and enabled voluntary servitude with the 14th Amendment, but to volunteer would require our Free Will. Undue Influence of the monetary system against the people its supposed to serve is not voluntary servitude. We have no contracts that indicate when we receive our reward or recompense for services provided that we want to be in debt as a result of it by accepting in return for redeeming our recompense; something that doesn’t have value.

    Trespass Unwanted, Corporeal, Life, a Free and Independent State, a People, In Jure Proprio, Jure Divino

  13. @ neidermeyer and needcaselaw

    The insurance part…you are correct, but insurable interest plays over and over for me, unless the policy was assigned to the owner who is in fact a party to the insurance contract, well what do we have? Who paid the premiums, collected proceeds and where did they go?

    The legal proceedings, whew, what a time consuming job. I have been advised by an attorney (real estate) but he is spending quite a lot of time helping me with one part of my case, Fed CT…while another is in process, in another state so, at the end of the day, they are breaking the bank.

  14. @ Joann

    Wouldn’t step one be getting a court ruling on who the “entitled” person is? Wouldn’t you need to unwind the trail to finally get to the answer. What trust; pooling and servicing agreement, etc., in finding the “entitled” person. Again, remember I am a lay person here so go easy on me if this is a stupid question. It would seem that finding the “entitled” person is not such an easy task. That is why I stayed away from that altogether in my complaint.

    “Put another way, if a maker makes a payment to a “person entitled to enforce,” the obligation is satisfied on a dollar for dollar basis, and the maker never has to pay that amount again. Id. See also UCC § 3-602(c).

    “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)”

  15. @jg

    Again, I have no legal experience and I am trying to interpret law and it’s applications and demonstrate why (with support) they are applicable. CGFFD, to me logically, should apply to any contract. The loan origination starts the process and is the basis upon which the contract is constructed and eventually entered into by all parties. So doesn’t contract law play a large part in this whole mess of deceit? Isn’t a court of equity supposed to apply the fairness doctrine? I don’t have my complaint in front of me but I know that I did back up the CGFFD with DE case law that seemed to fit where I was applying it. Again, I don’t speak leaglese well and have had to approach this whole thing through layman’s eyes. Yes, I believe you are correct that for the defense to block discovery or should I say, refuse to cooperate in giving me what I requested, is limiting my right to due process. That is why I used the judicial notice (emphasis added) to let everyone know I am not a lawyer; I can’t be held equal to a lawyer; I may have to make some corrections; and most important, I get equal and fair due process.
    As you mentioned, I hammered that argument in my mtc that in their blocking of discovery they are blocking my due process. I received a letter yesterday telling me they have additional discovery that I may come to their office and look through as well as copy what I want. I guess this is to have a defense to my motion to compel that is set for hearing next week. However, they absolutely won’t answer my interrogatories, so I will see what the judge does with regards to that.
    I know another post here on LL suggesting I get an attorney. It is a great suggestion, but there is no attorney in my state to get so I either go it alone or give up. That is a reason I post here to give others that feel hopeless and that can’t, for whatever reason, get an attorney, they can still try to fight rather than just give up and walk away. Something really needs to be done about this. We have small claims court for pro se folks, but nothing when ordinary people get screwed. Just not right. I compare myself to the old show Columbo. I just sort of bumble along as best I can and pray for the best.

  16. Dunno what jve is going to straighten us out about, but can’t wait! Not being smarmy – I mean it. I appreciate his time, usually! I know that alleging that a secn trustee is the bomb can get one in a corner? Pray tell, good man, what have you for us?

  17. @Katheryn – I swear the covenants of good faith and fair dealing are tenets which arise in contract only. If banksters are strangers, there’s no reliance on gf & fd’s. They won’t likely want to make that distinction, tho, since it might out their non-contractual relationship with you if that is the case. Btw, the law holds the relationship between a svcr and the borrower is not contractual. That’s good for something. Just wish I could remember what!

  18. @katheryn – para 2 of your complaint is most impressive. It’s clear it’s NOT seat of your pants. You obviously have done a great deal of work to back up your complaint. kudos! Your modesty is endearing, but I hope it will not preclude you from further sharing what may be valuable info. I, for instance, could NOT have written that paragraph.
    Does anyone know if such possession as described in k’s complaint is in fact a bailment? (The custodian of a trust holds the note in bailment, imo. Whom if anyone authorizes its alleged release of custody to a bankster, btw?) But then, if it is, since the bankster is likely to deny it, surely discovery is in order. My suggestion to date, which did not encompass a bailment situation but which might be nonetheless outed, has been our need to know clearance as to whether or not we have certain defenses available to us based on whether or not the (alleged) holder is a holder or a hidc since the defenses vary accordingly. The failure to allow us to pursue available defenses imo is a violation of due process.
    In an amicus brief in a Washington action, the WA AG has pointed out the distinction between a ‘mere’ holder and a hidc and made reference to why we need to know. So, for me, this confirms that using this line of reasoning to get discovery is not whacked.

  19. @needcaselaw, I looked at that a couple months ago. I remember I didn’t like it one bit, and as I recall, I thought it exemplified banksters’ lobbyists efforts to and success in mpacting legislation in their favor. Someone with a name you’d recognize, but of course I forget, wrote a scathing review of that draft report.

  20. The opinion in Leyva v. National Default Servicing Corp. 127 Nev. Adv. Op. No. 40 July 7, 2011 in the Supreme Court of the State of Nevada No. 55216 cited Pasillas v. HSBC Bank as Trustee No. 56393, 127 Nev. Advance Opinion 39 which also was decided July 7, 2011. Both decisions reversed the District Court, and both opinions cited to the opinion in Veal v. American Home Mortgage Servicing US Bankruptcy Appellate Panel of the 9th Circuit – June 10, 2011, delineating requirements for production of evidence of chain of title to the note and Deed of Trust in a foreclosure. From re Leyva v. National Default Servicing Corp:

    “The obligor on the note has the right to know the identity of the entity that is “entitled to enforce” the mortgage note under Article 3, see NRS 104.3301, “[o]therwise, the [homeowner] may pay funds to a stranger in the case.” In re Veal, No. 09-14808, 2011 WL 2304200, at *16 (B.A.P. 9th Cir. June 10, 2011) (holding, in a bankruptcy case, that AHMSI did not prove that it was the party entitled to enforce, and receive payments from, a mortgage note because it “presented no evidence as to who possessed the original note. It also presented no evidence showing [e]ndorsement of the note either in its favor or in favor of Wells Fargo, for whom AHMSI allegedly was servicing the [bankrupt party’s] Loan.”). If the homeowner pays funds to a “stranger in the case,” then his or her obligation on the note would not be reduced by the payments made. See id. at *7 (“if a[n obligor on a mortgage note] makes a payment to a ‘person entitled to enforce,’ the obligation is satisfied on a dollar for dollar basis, and the [obligor] never has to pay that amount again”).”

    From Veal v. American Home Mortgage Servicing – US Bankruptcy Appellate Panel of the 9th Circuit – June 10, 2011:

    “A thorough understanding of the concept of a “person entitled to enforce” is key to sorting out the relative rights and obligations of the various parties to a mortgage transaction. In particular, the person obligated on the note – a “maker” in the argot of Article 3 – must pay the obligation represented by the note to the “person entitled to enforce” it. UCC § 3-412.

    Further, if a maker pays a “person entitled to enforce” the note, the maker’s obligations are discharged to the extent of the amount paid. UCC § 3-602(a).

    Put another way, if a maker makes a payment to a “person entitled to enforce,” the obligation is satisfied on a dollar for dollar basis, and the maker never has to pay that amount again. Id. See also UCC § 3-602(c).

    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)”

  21. Hey Enraged,your right I cant spell.So you are safe bagging on me for that.I don’t have good computer skills.your safe there to.I suffer from depression ,so I take quite a few “chill pills” to quote Carie.As far as my sign on,poor computer skills again.Who I am once again Todd Michael Hess.Write it down this time .Todd Michael Hess.Got it?Good lets move on.As far as your time,someone is probably paying you for that or you would use your real name.I don’t drink or use street drugs.I’ve given more than you will ever know to this site.I would be willing to bet you used your house as an ATM now your sad you didn’t read the small print,see once you take a profit YOUR FUCKED.Unlike me who never took a penny.And unlike you I sold the fraud sub prime loan I was in.My wife and I paved the road for you,It’s not our fault if you cant see the signs. Very truly yours Todd Hess. P.S. sorry about the spelllingg.

  22. […] Filed under: bubble, CDO, CORRUPTION, currency, Eviction, foreclosure, GTC | Honor, Investor, Mortgage, securities fraud Tagged: 60 minutes, AHMSI, appraisal fraud, attorney general, auction fraud, Chris Koster, credit bids, DocX Indictment, foreclosure fraud, FORECLOSURE SETTLEMENT, foreclosures, forgery, housing market, housing prices, investors, linda green, LPS, Missouri, mortgage fruad, mortgages, Robo-Signing, settlement, strategic default Livinglies’s Weblog […]


    OMG! mystery allonges created after the fact and never attached to the “original” … not in evidence in AHMSI’s imaging system … AHMSI infering that they “originate” loans (right! ,, they’re just a debt collector …) gets better and better …


  24. I am sorry to see that so many of you are getting off on the wrong tangent, or filing “Complaints” that contain allegations that will come back to bite you. I will try to write a detailed report on what I foresee as flaws and failures in the precedent Posts shortly.

  25. @all ,

    “holder” of note … STANDING et al

    Only skimmed it so far but looks like a keeper …

  26. @Todd Hess,

    A few questions…

    1) What the hell is wrong with you? Where do you come off using people’s emotions to your advantage? If you have such serious insecurities, grow up! We’re in for our lives, ou54r jobs, our houses, whatever really matters to us. What have you contributed so far? No time for brats.

    2) Why do you change your sign-on all the time? Suspicious at best. Stupid on your part, regardless.

    3) Other than suck up all the energy we have and pour into this blog, what do you have to contribute? We all know you drink like a fish and you probably shoot too (based on the different tones of your posts, from very, very angry to whining and begging, back to angry, all of it very poorly worded and quite incoherent. Unstable at best. Where does that make you interesting and when did that give you the right to play on people’s empathy and compassion?

    Grow up or get lost. Never mind. You’re already lost.

  27. chris- being “duped into default” has been noted as a 1. manufactured default 2. parallel foreclosure 3. dual track foreclosure. Actually, there was a push by various pro consumer groups to get the servicers to halt dual tracking, the servicers responded by stating that they had to keep both avenues open in case the homeowner didn’t obtain their ‘modification’. And here we are.

  28. johngault
    thank you
    Kathryn and all thank you
    clarity starts to emerge

    Jim, on February 14, 2012 at 4:33 pm said:

    “In Va the 4th circuit said being holder was sufficient, not necessary to be a holder in due course”

    I think CA has said being a holder is sufficient as well as in Calvo – that Calvo means essentially that also -not sure exactly…..

    I have a copy of a copy of a note with my signature on it and no other. The servicer sent it to me as evidence of my obligation to the named entity on the note. It is the same entity that is on the recorded DOT. Same goes for the DOT. My signature and no other. The original “lender” and “beneficiary” (not mers) is one and the same and they are bankrupt and out of business. The original “lender” is now owed nothing because he is bankrupt and no longer in business and because he sold it and was paid in full years ago – there is no public record of this sale though and the servicer obviously has no record of it either because his copy of the copy shows no endorsement. No one else has signed the note or the DOT (even though there has recently been a transfer ADOT for no value from a servicer who is not a lender or a beneficiary to the trust who cannot by law accept a sale or assignment of this mortgage now). The indentured trustee for the trust obviously has not provided the servicer with a copy of the note showing endorsements from the original lender to the sponsor to the depositor to them and these sales (assignments) were never recorded. There is no evidence this sale actually took place even though there is evidence in the free writing prospectus that a sale of the specific mortgage was intended. There is no mortgage loan purchase agreement or mortgage loan purchase schedule recorded or filed with the SEC. The SEC files say it was “intentionally ommitted”. The servicer copy of the note showing the original “lender” who now has no interest, who has been paid in full years ago is all there is. The NOD says the default is to this original lender but he is paid in full, and bankrupt and out of business. Who is the holder or holder in due course? Three parties – the servicer – the trust and I ( plus the title co and DOT trustee and collectors of various sorts and perhaps someone else who could have taken one from my mailbox or 1000 does) – all have copies of the copy of the original note with my signature and no other and the original “lender” and “beneficiary” has been paid in full. In that regard aren’t we all on equal footing? We all hold a note that has been paid in full or released years ago by a lender who is bankrupt and out of business. Who is the holder or holder in due course? Who is the beneficiary who can direct the trustee to sell the property? Perhaps I can foreclose on myself or direct the trustee to reconvey it to me because I hold both the note and the title and no one else does. DOES A HOLDER HAVE THE SAME RIGHT TO PAYMENT AS A HOLDER IN DUE COURSE? How many people can you owe at once? Perhaps I had the right to be paid or paid the profits and insurance. My signature was used to turn it into a stock. I have equitable title (and legal title in judicial states) and the trustee has only bare legal title in non-judicial. I also had equity (when signed) and there have been tons of improvement and on-going maintenance and payments of taxes and insurance. Who had skin in the game? I was a party to the deal. Where did my payments go? My note was never registered. Where did the profits from this “sale” of a security interest go? To a holder – or a holder in due course? Article 3 plus Article 9 might cover it. What about article 8?

  29. Hey Chris I’m going to take your advice and I will try to play nice. OK? Carie I’m sorry if my rants have flown over your head and I hope you will forgive me for offending you.I hope I haven’t discouraged you from completing your unpleasant task of pealing this nasty onion.You will know when your job is done when you get to GOLDMAN SACHS. Very truly yours Todd Hess P.S. I am truly sorry Carie.for being offensive and I hope this finds you well.

  30. @ ncl

    I tried for a year; no attorney in this state will touch the banks; only represent them.

    What you say is true, however, when you are the Plaintiff the legal standards were raised by Twombly so you better have a pretty darn good prima facie complaint to survive the first sj motion. I filed my complaint in June 2011. We are in the discovery phase now. Trial is set for November 2012. Just my -0- cents worth and thanks for the tip 🙂

  31. Chris and Katherine – It’s a very good idea to have a lawyer if you can afford one. If not, perhaps you can get one to review your complaint before you file it. That would only be a couple hours time and could be most worthwhile. Meanwhile, if you are in a “pleading state” be aware that generally a complaint is to ONLY contain facts and enough legal theory to show that what happened wasn’t koshire – evidence is not to be included except essential exhibits such as legal description of property and perhaps the deed of trust.
    Good luck!

  32. @chris (06:07pm) ,

    The problem as I see it is that these are not standard insurance policies issued by an insurance company… These private contracts (swaps) are totally unregulated… and the companies writing them were plain STUPID in that they assumed good underwriting and no malfeasance on the part of the servicers. Why they insured parties that had no insurable interest is beyond me.

    @Jim (04:33pm) ,

    VA 4th is plain wrong … if you break into my house and steal my little firesafe with my car title in it you are holding my car title in your hand … but you are not a Holder in due course … it’s not your car… you can sign you name to it and pretend I sold it to you for $1 at the DMV office to get a new title but the fraud is there and the car is not yours…

  33. Chris

    Same thing happened to us. I started my complaint with a time line history of events very detailed with who, what, when, where. I then gathered all of my evidence for that time line and used each as an Exhibit to further prove my credibility. I then compiled law suits and OCC Reports, etc., etc., to prove that this is a pattern of operation. I use the word “prove” lightly, because it’s not proof, but again, goes to the credibility of my complaint and each allegation. Once the history was complete, I then constructed the actual allegations and supported it with case law and regulations. Just my -0- cents worth.

  34. I also want to address the “insurance” element of this fraud, once again.

    If the “originator”, not a party of/in interest, of a loan purchases an “insurance policy” betting on defaults and in some cases, never applying your payment, when it was sent, deliberately putting your loan in default, by their behavior, and subsequently filing a claim on the default, collecting 2 1/2 times the face value (30 year aggregate amount) of your loan, how do you proceed with that claim or pursue the theft?

    One “must have” an insurable interest or assignment from the owner of the mortgage to receive proceeds of the insurance. This is a large pot of cash received by some of these originators and no one is checking this. Once again, somewhere out there a company is paying fraudulent claims to these bums. Now, just for the record, I do not like insurers any more than banks. This is about the “pay-off” of many of our loans and the proceeds that have been diverted to the coffers of the originators, wrongfully…they own nothing. The proceeds belong to the investor and our mortgages should be satisfied with that money!

    My $.02

  35. @ jg

    These are a few very simple references I used. I can’t find my research on it as I have 1,000’s of pages of law and research, but this is straight from my complaint:

    Plaintiffs are entitled to debt validation under USC Title 15 Section 1692(g). Plaintiffs loan started as a negotiable instrument governed by specific laws under the Uniform Commercial Code, (UCC). Plaintiffs asked, via written request for a verified statement of account defined under UCC9-210 and to present have been ignored by Defendants and Defendant’s attorney.

    If the holder in due course of the Plaintiffs’ promissory note then pledged or transferred rights and in fact conveyed 100% interest in the Plaintiffs’ property, which was standard practice at the time, to certificate holders (investors) in the mortgage backed bonds that were issued and by contract becomes only the holder as “custodian” for the last transferee, then the holder is no longer a “holder in due course” and the “transferee” is then the “holder in due course” as soon as a demand of delivery of the note, mortgage or other admissable documentation showing his/her/its ownership. Having the note in one’s possession does not necessarily give one the right to enforce it. UCC 1-201(2).

    Defendants have not proven standing or capacity to demand payment of $___________ or to initiate foreclosure proceedings against Plaintiffs. Federal Rules of Civil Procedure clearly states “(a)n action must be prosecuted in the name of the real party in interest.” This rule is incorporated into the rules governing bankruptcy procedure in several ways. F.R. Bankr. P. 7017 is a restatement of F.R. Civ. P. 17. In Hwang, 396 B.R. at 766, the real party in interest in a federal action to enforce a note, whether in bankruptcy court or federal district court, is the owner of a note. In securitization transactions, this would be the trustee for the “certificate holders”. “The party asserting it has standing bears the burden of proof to establish standing. sumers v Earth Island Inst., 555 U.S. 488 (2009), in Re: Veal United States Bankruptcy Appellate Panel of the Ninth Circuit.

    Defendants action in demanding payment in an unverified and challenged debt and for which Defendants have offered no proof that they have legal standing and capacity to make this demand pursuant to Civil Rule 17(a)(1). Refusing to validate the debt violates FDCPA referenced above and is subject to penalty up to $1,000 per violation.

    A party must act reasonably to fulfill the intent of the parties to the agreement. Restatement (second) of Contracts s205 (1981). The Defendants violated the implied covenant of good faith and fair dealings from the date of the refinance loan application of January 25, 2010 to present date and have caused significant harm and damage to Plaintiffs financially, destruction of their good credit rating and emotional harm in defense of actions of the part of the Defendants.

    Obviously, these are just some examples of my “flying by the seat of my pants” complaint, as it is 28 pages and another with 65 Exhibits. I had to keep it as simple as I could so that I’m not in so over my head that I can’t coherently discuss my allegations. If someone here finds something useful, it was worth the time to pass it along.

    P.S. I didn’t proof for typos, too tired.

  36. My question: What do you call it “legally” when you are duped into default? When the fraudster tells you, you must be in arrears 2-4 months, before we can even consider helping you, when in fact you are current at the time and can see a problem is imminent.


  37. Some clarification (what will supposedly become “Comments” on a future UCC publication) are contained in:
    Draft Report of the Permanent Editorial Board on the UCC Rules
    Applicable to the Assignment of Mortgages Notes and to the Ownership
    and Enforcement of Those Notes and the Mortgages Securing Them,
    Permanent Editorial Board for the Uniform Commercial Code,

  38. In Va the 4th circuit said being holder was sufficient, not necessary to be a holder in due course

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