I think you should win this one if you do it right.
The banks fall right through the trap door on this one —- they prove that there was probable cause to believe that they were a valid creditor on the note (UCC3) but not a valid enforcer under the deed of trust (mortgage) (UCC9).
By alleging they are a holder and not a holder in due course they are admitting they didn’t pay for it and/or admitting that they took delivery with knowledge of the defenses of the borrower. That is basic black letter law, in my opinion. And one of the defenses is lack of consideration. either way they either need to show they paid for it — either directly with proof of a wire transfer receipt etc. or by getting a judgment on the note. THEN they can enforce the judgment. Neither way is non-judicial foreclosure permissible or constitutional.
Thus by their own argument and admissions they are an unsecured creditor with no right to enforce the mortgage because there is no question that they never paid value or consideration for the mortgage, which is the most basic requirement under UCC Article 9.

They may be entitled to the presumption that they can enforce the note. And perhaps the burden of proof shifts to the borrower to rebut the presumption. But remember the presumption is that the note is evidence of the debt — it is never that the note IS the debt.

If you have challenged the underlying transaction saying that the note refers to a transaction that never took place and therefore the note and the presumption of validity of the the note is rebutted —  and if you are able to show the absence of an underlying transaction — simply asking for it and never getting it, then the note is not evidence of a debt and/or the assignment is not evidence of ownership of the mortgage (or deed of trust).
The same holds true for the mortgage. There must be an underlying transaction for the assignment to have any legal effect. There must be a SALE of the note just as there must be a LOAN of money if someone wants to use the note as evidence of the debt.

If there had been a sale of the loan, then they would be asserting the rights of a holder in due course. But they are not asserting that which means they are electing their remedies — they are choosing to sue on the note using the presumption of the validity of the note as evidence of the debt.

Allowing them to enforce an interest in land is bootstrapping the presumption available for the note into a prejudgment seizure of an asset to satisfy a judgment that does not exist. All of this circular reasoning exists because the banks refuse to show the money. They refuse to show it because it doesn’t exist.
Wipe the rebuttable presumption away and they have no case. The banks say that there is no reason for them to show consideration. They say that the presumption about the note ends the discussion. That is NOT why the presumption was created. The presumption was created because in most instances the underlying transaction is undeniably present and proof of it is a waste of time because nobody disputes it. That is precisely why it is a rebuttable presumption as opposed to an irrebuttable presumption.

If they want to sue on the note, let them. That is a judicial procedure. But then they must allege some things they cannot allege in good conscience — like anyone in their chain ever made a loan to the borrower or that anyone in their chain paid any money to purchase the loan. Or if that is swept aside, then they can sue as holder without the right of a holder in due course which means that the borrower can raise any defenses that could have been raised against the originator of the loan. And THAT includes lack of consideration.

22 Responses

  1. In New York UCC-3-408 states that “Want or failure of consideration is a defense as against any person not having the rights of a holder in due course (Section 3–305), except that no consideration is necessary for an instrument or obligation thereon given in payment of or as security for an antecedent obligation of any kind. –

    Interesting enough is that there is caselaw in New York that supports this statue. In US BANK NATL. ASSOC. v. Christensen it states that “It is not necessary, however, that the party seeking to foreclose provided the consideration. see US BANK NATL. ASSOC. v. Christensen, 2014 N.Y. Slip Op 32498 (Sup. Ct. 2014).

    The same case also asserts that A mortgage may be valid as long as proper consideration exists for the underlying obligation;

    it also states that “once a party has lawfully obtained both the mortgage and the underlying promissory note, that party has standing to foreclose on the mortgage in the event of the default on the borrower’s obligation” (See Rose v Levine, 107 AD3d 967, 969-970, 969 NYS2d 72 [2d Dept 2013]). Thus, the fact that plaintiff did not loan any money to defendants Christensen or service the loan is not a relevant consideration in determining standing.

    I think what Neil is saying is that if you refute that you received consideration from the transaction from its inception which involve the originator of the loan, the the mortgage and note may not be valid because proper consideration of the loan has not been determined to which the new plaintiff would have to show that they obtained the loan for payment and consideration

    However New York courts are saying that a signed HUD-1 and a payoff letter creates a presumption that the mortgage proceeds plaintiff loaned to a defendant were allocated to satisfy an existing mortgage upon a subject real property. ((See SAND CANYON CORP. v. Marino, 2014 N.Y. Slip Op 31386 (Sup. Ct. 2014).


  3. Need some assistance. I need to find specific laws that state that it is illegal for Servicers and thier attorneys to create fraudulent Allonge’s and Assignments in order to foreclose on a homeowner. Thanks

  4. I am so relieved to find this blog- we are in the 18th judicial in Florida and currently Wells Fargo is trying to foreclose on my deceased mother’s home. She originally had a mortgage with First Union/Wachovia. However the sale was never recorded and in the initial complaint Plaintiff Wells Fargo did not include the transfer of the mortgage from the first owners of our house to my mother. I also want to start a fraud suit as Wells Fargo cannot prove they have the right to enforce their security interest.

  5. Hi Neil.

    Is this information LEGAL IN STATE OF California.

    Please respond.

    Thank you.

    N. Hahn

  6. Elexquisitor
    Kudos and best of luck.

  7. Hi Neal.

    Douse this APLY TO California.

    Thank you.


    Nancy Hahn

  8. If a party is bringing an action about a Contract/Note and they are not a party to that Note, and are not listed on the face of the document that it a action the court cannot address with the non interested party.

    The matters are coming to an end because the obvious is being seen for what it is. Ginnie Mae a larger Federal owned corporation is not now asking to see the titles, if a suspected problem at least has been bought up.

    I believe the VA hospital situation allows a fall guy in Shinseki who the Secretary of VA and the hospital like the VA HAMP was lender wide. So on Shinseki way out the door he gets a double dose on stupid!

  9. @dw – Neil is trying to explain presumption – what happens if facts are missing. Presumptions are applied as a matter of law with respect where you are in the legal action. It’s the chess game in a legal battle.

    In a summary judgment motion the party bringing the motion has the presumption of proof against them, initially. If they can show uncontested facts that support their position in the action, then the presumption switches and the opposer to the motion has to set forth uncontested facts to support their position. This is why summary judgment is a normal part of foreclosure litigation – because it may pull evidence from the defending party that was being held in reserve for trial.

    In issues of agency, the presumption is against the party claiming it, so they have to evidence their claim with documents or affidavits. When requesting production of evidence in CA there is a limit on how many requests you can make, but a set of default requests common to most actions is available, called a form interrogatory. One of the standard questions is to state any agency relationships with any of the parties in the action. A party claiming agency in an appeal would include the request and their answer to that form interrogatory, as is it signed under penalty of perjury and unless objected to, admissable and noticeable to an appellate court. A party like myself, intent on defeating the claim of agency, points out to the appellate court the absence of a form interrogatory response by the party claiming agency (or any other document for that matter), and the presumption against agency should prevail in a lawful court. And if the party opposing the summary judgment is opposing the agency, then there are 2 presumptions a justice bent on contorting he law would have to contend with.

    IANAL (I am not a lawyer). The above is a pile of horse manure. But hey! Every once in a while a pony pops out!

  10. I believe that they were trying to hide the fact of the assignment and is why all the transfers to Ocwen. However I believe that Ginnie Mae back out of this scheme, because they been had at some level and is why they stop the rest of the transfers and is asking to have the servicers show them the title.

    It the only cover Ginnie Mae has got at this time and that is to fully blame it on the banks! Just think how has servicing gotten to be so unprofitable that the bank are shifting all these billions in loans and somehow Ocwen can do all these billion of loan servicing cheaper?

    They cannot, and this play was to be able to destroy the records so that they can get around UCC9!

  11. Ocwen Financial (OCN) Unit Completes ResCap Asset Acquisitions

    February 19, 2013 8:56 AM EST

    On February 15, 2013, Ocwen Loan Servicing, LLC, a Delaware limited liability company and a wholly owned subsidiary of Ocwen Financial Corporation (NYSE: OCN), completed the acquisition of certain Purchased Assets (as described below) pursuant to an asset purchase agreement (the “Asset Purchase Agreement”) with Residential Capital, LLC, Residential Funding Company, LLC, GMAC Mortgage, LLC, Executive Trustee Services, LLC, ETS of Washington, Inc., EPRE LLC and the additional Sellers identified on Schedule A thereto (collectively, the “Sellers”) in connection with the Sellers’ proposed asset sale pursuant to a plan under Chapter 11 of Title 11 of the United States Code (the “Bankruptcy Code”). Each of the Sellers is an indirect subsidiary of Ally Financial Inc.

    Pursuant to the Asset Purchase Agreement, Ocwen purchased approximately $49.6 billion in “private label” mortgage servicing rights (“MSRs”), $19.2 billion in Freddie Mac MSRs, $38.5 billion in Ginnie Mae MSRs, $42.1 billion in master servicing MSRs, $25.9 billion in subservicing contracts, $1.5 billion of related servicing advance receivables, and related elements of the servicing platform for these MSRs and advances (collectively, the “Purchased Assets”), in each case as measured by unpaid principal balances as of December 31, 2012. The aggregate purchase price for Purchased Assets, net of adjustments for assumed liabilities, was approximately $2.1 billion, subject to post-closing adjustments for the unpaid principal balance of the related Purchased Assets as of the date of closing and other customary post-closing adjustments. In addition, until certain consents and court approvals are obtained, Ocwen will subservice approximately $9 billion in “private label” MSRs previously serviced by the Sellers. When such consents and approvals are obtained, Ocwen will purchase those MSRs as well.

    The transactions described in the previous two paragraphs are referred to herein as the “Transaction.”

    Ocwen deployed approximately $840 million of net additional capital, all in the form of additional term debt described in greater detail in item 2.03 below. To finance the acquisition of the servicing advance receivables, Ocwen borrowed approximately $1.25 billion pursuant to three servicing advance facilities with Barclays Bank PLC, JPMorgan Chase Bank, N.A. and Bank of America, N.A.

    The foregoing summary of the Asset Purchase Agreement is qualified in its entirety by reference to the Asset Purchase Agreement, which was filed with the Registrant’s November 8, 2012 Current Report on Form 8-K as Exhibit 2.1 and incorporated herein by reference

  12. And if the record is incomplete how can justice be done

    Not an attorney not legal advice just common sense.

  13. elexquisitor
    How on earth can you complete the record – it’s unavoidably incomplete because discovery was blocked by the sounds.

  14. I feel like we are back peddling only to go full circle again.
    Needless to say each case has taken its path and honestly I think it might take a long time to put them behind bars but the nazis eventually were tried and convicted for their crimes against humanity – nice gift fior out grand kids but not so much theirs.

  15. Well Charles
    Erica Johsen Seck ( well known Robo signer acts in various capacities to have ” personal knowledge for deutsche, HSBC, one west indymac and so on – god knows when that women sleeps or how) she should follow Linda Green because it’s same thing exact- assigned as ” attorney in fact” for ” HSBC” recorded several years after trust closed plus my loan was unqualified ( past cut off date under New York trust Law) and after indymac went into receivership – technically how she got laid, whoops I mean paid, working for a defunct company ?? Guess she missed that. Anyone got that deposition from her???

  16. In my CA case I had to request a statement of decision from the trial judge to make my point that there were no common business records produced as a result of discovery requests to substantiate any negotiation occurred among the identified parties. My request was ignored, so it will be interesting to see what contortions the Appellate court will go through to ‘justify’ the absence of any facts that substantiate FNMA’s and JPM’s claims.

  17. javagold they uses robo as a catch all phase because in Wells’s release, it said the personnel approved legal document without proper review. The robo signing caught the name after 60 Minute reported on the masses robo signing DocX as one employee explained that he signed 4,000 phony assignment with Linda Green name on them!

    Yes there were document that notaries were simply signing but these were secondary documents and not assignment in most cases!

  18. Neil:
    that was an excellent article. The distinction between the holder and holder-in-due-course is exactly where we have been pointing. You do have a way of illuminating the obvious. Their own pleadings work as an admission as to the character of the debt…Article 9! The next step is for them to bring the wire transfer or proof of payment (check) to court…should be easy enough…right? Well written.

    Best, Jim

  19. Assignments Were robo signed and post dated ( and incorrect date order, as the morons couldn’t even do it correct after the fact!!!) ….it was of course bought to courts attention HOWEVER, the house was still stolen at fraudclosed sheriff sale. ….

  20. 2yrs ago did I not talk about UCC3 & UCC9 and in fact I got this turned in to the SEC as a Whistleblower claim? Did you see that Wells Fargo settled a Robo claim on Friday for $67 billion from shareholder complaint!

    What they are doing is trying to not have this as a securities situation when in fact these loans are in securities, an with the 4% foreclosure rate of FHA & VA loan and Wells Fargo handling 1.3 million of Washington Mutual loan that 104,000 loan for 2009-2010 that were illegally foreclosed with Forgeries!

  21. Do the settlement terms establish there needs to be a valid transaction as well?

    p 100/A-6 of Consent_Judgmen_Chase-4-11-12.pdf

    Under C. Documentation of Note, Holder Status and Chain of Assignment.

    6. Servicer shall ensure that mortgage assignments executed by or on
    behalf of Servicer are executed with appropriate legal authority,
    accurately reflective of the completed transaction and properly

    It seems lawyers, officials etc aren’t bothering to read the settlement terms.

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