Meet PETE: Person Entitled to Enforce

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Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

See my blog article from yesterday and listen to the show.

Concentrating on PETE goes to the nub of the problem. But Judges are not looking for the letter of the law — especially if it conflicts with what they think is common sense. And frankly the UCC is not very helpful for a situation like this — where the banks institutionalized violating the law. It doesn’t make sense to the Judge. From the beginning of this era of litigation, which I would say was around 2004, it was generally thought that Banks would not risk destruction and diminishing their brands by committing crimes that would or could send bankers to jail. Individuals would but banks would not.

The Judge would believe this crazy story if it was an individual in a tee shirt with tattoos and a Hells Angel jacket but it is completely counter-intuitive to believe that the banks would have committed so many crimes in such an elaborate, complicated and complex scheme of layers and laddering. The banks would not do these things they are accused of doing and the regulators would not have allowed it. And today, it STILL makes no sense to most people and most Judges. The borrowers  do not have sufficient education or experience to argue with the popular myth about what the Banks would do, why they would do it and why the borrowers are technically speaking in a far superior legal position when compared to the banks.

So everything presented to the Judge including outright proof of the facts supporting the homeowners’ theory of the case is filtered out by the completely wrong assumption that the bank would never act so irresponsibly and the borrower is merely seizing on hairsplitting notions to escape liability on a deal that went bad for them. The little voice in the Judge’s mind says “Even if you are right, the bank got hurt as well and our laws favor enforcement of negotiable instruments.” And the bank argument that failure to enforce would destroy the financial system and the economy therefore resonates strongly with nearly all judges on both the trial bench and courts of appeal.

The real cause of the trouble comes from the fact that the borrower got money at closing and the notion that assignments, endorsements, powers of attorney were not based upon any actual transaction. To say that there was no money at closing sounds ridiculous to anyone who has not analyzed this from the perspective of an investment banker. There you will easily see that there was no money in the original transaction and there was no money in any “succession” created by false paperwork. And the reason that is important is that in the end the intent of all law is to make a debtor pay his creditor. But who is the creditor?

As the old cases put it, the mortgage follows the note and will automatically inure to the benefit of the party to whom the obligation is owed. see
The trick here is that the borrower didn’t know there was a difference at closing between the party who funded the loan and the party to whom he promised to pay money. If he did know, or if he was told shortly after closing, then he would no doubt have reconsidered or rescinded once he saw all the people who were actually making money on the origination and transfers of his loan.
The confusion starts with the novel issue or novel fact pattern in which there is now a difference between PAYMENT and REPAYMENT. PAYMENT means you have an obligation to pay. That is not the deal with a loan. THAT is a promise caused by the sale of goods or services. REPAYMENT means that you made a promise to pay back money you received from the Payee on the note, the mortgagee on the mortgage, the beneficiary under the deed of trust.
It should be about REPAYMENT not PAYMENT. And that is where the essential problem lies. If there was no loan at the base of the chain of transfers, then there is no basis to enforce by ANYONE. I think we ought to argue that if some crooked individual had done these things for himself, the Judge would have no problem in stopping enforcement. The fact that a crooked banker engineered this through dozens of conduits and outright civil and potentially criminal theft should make no difference to the result.
I wonder if a voir dire question should not be addressed to the Judge to ask whether it makes any difference to him whether the acts complained of by the homeowner were allegedly committed by some felon with a criminal record or a banker with a clean record. Admittedly the credibility of witnesses is at stake in that example but the ultimate ANALYSIS of the legal and financial  consequences of these schemes should be examined with lady blind justice in mind. I have asked voir dire questions to judges and found them receptive. It is an ideal time to take control of the narrative.

11 Responses

  1. Does anyone know how I can find out if New Equity Financial out of Kentucky went Bankrupt. I cannot find anything on them. James

  2. Why is it that everybody in America The citizens know the banksters are fraudsters and want them in jail and our politicians and Judges dont know and allow fraud forgery etc…. if you are a banksters


  3. Meet the Laughing stock of the world
    United States of America


  4. I desperately need your assistance. Can someone take a look at this DOT and tell me if its valid. I am currently in a foreclosure with Wells Fargo and trying to fight them myself because I cant afford an attorney. I currently have a complaint in with the CFPB and would like to get an answer as quick as possible so I can present it to them as part of my case. If you look at the DOT it has Mortgage Lenders Network listed on there. Since they went out of business in 2007, does it void this DOT and break the chain of title? Please help. My email is I can email you the DOT. Please help

  5. I agree with you esp. in light of the similarity of rulings across the entire country. I see the same terrible rulings across the board. That means there is a single source of information presented to these judges. WE already know that their pension plans (which include the employees at the state and county levels have investments in MBSs but there was a lawsuit here by the judges pension plan against BoNY Mellon for bad MBS. The outcome was a hedged bet and secret. IMHO that means they all know the investments are bad news and knowing that, they know the borrowers were defrauded. I see lots of people who are both cowards and afraid. This has to come out eventually.

  6. In my opinion most Judges dont believe the Banksters. He/She has no choice in the matter. I do not have proof for the above opinion


  7. I seem to remember a story a while back about how they funded the loan via fax and then rescinded the fax after the borrower signed the note and mortgage at the closing and so a debt was created and no money loaned. Does anyone else recall this?

  8. Let make this simply and that is that the originator does not have to prove they own the debt if acting on the loan, however any other party must present what they are owed and how they come to that conclusion. They cannot say I am owed $1 million dollars and the Note was only $200,000.

    The acting party must state what they are owed and how they are owed this monies, when challenged. So where is the receipt of purchase and the payment recorded! However if you not owned anything you don’t have the evidence that your are owe anything. You may act on the Note but what are you acting on, if you not owed.

    What is a Note? A Note is a contract to agree to pay back the debt, and if there is no debt the Note is no longer a Note as it does not serve the purpose of a debt agreement between two parties!

  9. Here is what I know and that is Ginnie Mae pooled loan where the Notes are not taken as value because there is no monies that exchanged hands.

    In short the person who is holder of the instrument can only demand what is owe to them and if they not purchase the Note with the debt, they are not owed anything.

    This is only about recovering what is due, and is why the entity who is not the originator must present evidence of what owed!

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