the Golden Rule of Mortgage Foreclosure: the Uniform Commercial Code forbids foreclosure of the mortgage unless the creditor possesses the properly-negotiated original promissory note. If this can’t be done the foreclosure must
stop. — Douglas Whaley, Professor Emeritus, The Ohio State University Moritz College of Law.
“By saying yes, the homeowner admits that the paper is original which it is not, he admits that it is his signature, which it is not, and he admits that the possession of the original note is unquestionable which is completely wrong because the actual original was “lost” many years earlier.” — Neil F Garfield


The problem with the great tidal wave of foreclosures has been that everyone (lawyers, judges and homeowners) have made great leaps of faith in accepting nonexistent facts. And the other problem is that all foreclosures are governed by the UCC which has been adopted in all 50 states as State Law. It is the source of all governing law as to the ability to negotiate the note, enforce the note and to enforce the foreclosure provisions contained in the mortgage.
All law schools provide two semesters of instruction on the Uniform Commercial Code. Most law students, including those who become judges, can barely stay awake during the lectures and barely comprehend the content of the instructional material. I was the exception. I received the American Jurisprudence Book Award for the best performance in that class. Others in my class paid close attention but the majority struggled to stay awake. And nearly everyone forgot practically everything they learned about the UCC immediately after taking the Bar Exam that contained few questions about the UCC. So for most people in American jurisprudence, the UCC is regarded as a quaint irrelevancy.
Those who created the current infrastructure of what is erroneously referred to as securitization understood that nearly all lawyers — on or off the bench — retained practically nothing about the Uniform Commercial Code. They correctly predicted that the Judge would accept whatever the lawyer for the Bank said was in the UCC. The result was a startling array of decisions twisting and undulating in confusion about exactly who should be paid by the “borrower”, who could modify the obligation, who could enforce the note and who could foreclose.
I found study of the UCC to be enjoyable because it follows a certain logic in the real world. In an increasingly complex world it would slow down commerce to a snail’s pace if the note were not negotiable, transferable and deliverable. Otherwise one would need to go back to the maker of the note and get payment, most of the time before it was due. That would stop the new transaction in its tracks. Or one would need to get the signature of the maker (borrower) on anew instrument in order to use the note as the basis for a new transaction of any kind. Something was needed to create “cash equivalency” of paper with or without the knowledge or consent of the maker. Both the maker and the possessor of the note would need certain protections so that no inequities would arise, hopefully.
So the best minds in the judicial world came together and created a uniform code that everyone everywhere in the country would follow. It was originally a “National Code.” Like all new endeavors there were defects in the structure of laws in the first national code which was based upon centuries of common law decisions from trial and appellate courts. So the next generation of brilliant legal minds came together to fix the defects and create certainty in the marketplace for negotiable instruments and ancillary instruments like mortgages.
As a general rule one must physically possess the note in order to negotiate it or enforce it. Possession was determined by thousands of judges and lawyers to be essential to enforcement and thus also negotiation of any note; this was so because if a party claimed rights to enforce a note but admitted that the note did not exist, was in the possession of someone else or even lost, the maker might be liable multiple times. So POSSESSION became the gold standard. As a brief example of how this applies to the many issues we have discussed on this blog, let’s begin with the “closing.”
The “borrower” is required to sign the note before the loan is funded. Hence the loan contract is not commenced or consummated until funding. BUT the signing of the note created a negotiable instrument. After signing the note, the customary practice is for the closing agent to take delivery of the note. The closing agent thus becomes the first possessor, but without any right to enforce the note.
Back when I stared law practice a representative of the lender was frequently present at closing. Once all the papers had been properly signed and money was received by the closing agent to fund the loan, the closing agent would physically deliver the note to the representative of the lender or transmit this valuable document (“cash equivalent”) to the lender or its authorized representative. If the lender was the funding source, the loan contract was complete and the the lender was the possessor of the note with direct rights to enforce — i.e., the lender was named on the note as payee just as one would write out a check.
If the lender sold the loan into the secondary market, the lender would receive a sum of money the amount of which was determined by agreement between the buyer and the lender as seller. The buyer would receive physical possession of the note with an “indorsement” frequently spelled as “endorsement.” The endorsement would generally be made payable to the name of the buyer but it could be endorsed in blank, which would make the loan negotiable or enforceable by anyone who came into possession — even a thief, who could sue but not win once the facts of the theft came out.
The above description is what most people have in mind when they think about loans today. But their thoughts are antiquated.
Today, the “loan closing” starts in the usual way — the “borrower” is required to sign the note thus creating a negotiable instrument before any funding takes place. The party named as lender is never present and thus cannot take possession of the note. The closing agent is the first possessor with no rights to enforce. But theoretically the closing agent, if he or she was dishonest, could bring suit to enforce the note. Like the thief, the closing agent can sue but he cannot win. But I digress.
What happens next depends upon whether the lender is an actual lender who might still be sending a representative to the “closing,” or is an originator who merely sells the loan product to the borrower. 96% of all “loan closings” over the past 15 years were “originator” loans.
In the case of an originator the physical note, best case scenario, is sent to the party who was instructing the funding source, as a conduit. The originator is not generally allowed to touch, much less possess the note nor does it have any right of enforcement — because the originator has already signed an “Assignment and Assumption” Agreement before  the borrower even applied for a loan. Hence the originator lacks both possession and any authority to negotiate the note.
If the originator is still in business (check the Implodometer.com), at some time in the future a representative of the originator is called upon to execute an indorsement of the note. Lacking both physical possession of the note and the right to enforce it such an endorsement is void. Someone else possesses it and as it turns out, a party other than the possessor supposedly has (or claims) the right to enforce the note.
The party with possession could theoretically acquire the right to enforce from the party who claims to have the right to enforce — and in today’s market that is exactly what happens. If the originator is not in business the signature nevertheless appears like magic as an officer of an institution that does not exist — but lacking the date on which it was executed. Or, as is usually the case we learned from the robo-signing, robo-witness, robo-officer scandals, we see some signature of a person who either didn’t exist or was not employed by any of the parties in the false paper trail. Neither the lawyer for the homeowner nor the homeowner is able to prove this because the information is in the hands of third parties who are not even parties to the foreclosure litigation.
The problem with that scenario is that the party who claims the right to enforce it does not have those rights, does not have possession, does not have any receipt or proof that it paid for the note, and is essentially a stranger to the entire transaction — but now nonetheless accepted in court by itself or through an agent or power of attorney as the party in possession with rights to enforce. Such representations are untrue and a fraud upon the borrower, the court and anyone else having an interest in the actual events that transpired at the “loan closing.”
Further eviscerating the position of the eventual party who has conducted foreclosure proceedings is the documented fact (see Study by Catherine Ann Porter) that most and perhaps nearly all of the original notes were immediately and intentionally destroyed. Fabrications of the note were created each time the loan was sold. Such sales were often virtually simultaneous so that the party claiming the right to enforce the note and the right to foreclose received multiple payments on the same loan while at the same time retaining the “servicing rights” so that they could foreclose and report to the unhappy buyers that their investment was worthless.
Hapless homeowners with clueless lawyers were asked at trial if the document before them was the original. The homeowner had no idea that the signature he or she was looking at was forged by high tech mechanical means which today actually employs a ball point pen and created variations in the signature as to pressure, lines and swirls. By saying yes, the homeowner admits that the paper is original which it is not, he admits that it is his signature, which it is not, and he admits that the possession of the original note is unquestionable which is completely wrong because the actual original was “lost” many years earlier.

26 Responses

  1. James of 6/30/16, I too have Freddie Mac claiming to be the “owner” of the “note and mortgage” and am in a foreclosure without them even being mentioned. I tried to bring them in, have pleaded their involvement and the plaintiff lawyers stated they were merely an “investor” but couldn’t explain what that meant when the judge asked.

    Here’s some FMac servicing guidelines I was sent by a special source:

    The Servicer must instruct the foreclosure counsel or trustee to process the foreclosure in the Servicer’s name.
    If an assignment of the Security Instrument to Freddie Mac has been recorded, then the Security Instrument must be assigned back to the Servicer before the foreclosure counsel or trustee files the first legal action. (MY note: This implies that there is an unrecorded assignment from bank to Freddie Mac. This has to be true as Freddie Mac won’t pay the bank until Freddie Mac has assignments/mortgage docs/note, etc., and those are delivered to the Custodian for the sole benefit of Freddie Mac.)

    Refer to Section 66.18 for an explanation of first legal action.
    To have the Security Instrument assigned back to the Servicer, the Servicer must submit a completed assignment with Form 105, Multipurpose Loan Servicing Transmittal, to Freddie Mac (see Directory 9). Freddie Mac will execute the assignment and return it to the Servicer within seven Business Days of receiving the documents.

    If the Servicer is foreclosing on a Mortgage registered with the Mortgage Electronic Registration Systems Inc.(MERS), the Servicer must prepare an assignment of the Security Instrument from MERS to the Servicer and instruct the foreclosure counsel or trustee to foreclose in the Servicer’s name and take title in Freddie Mac’s
    name according to the requirements of Section 66.54. The Servicer must record the prepared assignment where required by State law. State mandated recordings are non-reimbursable by Freddie Mac, are not considered part of the Freddie Mac allowable attorney fees and must not be billed to the Borrower.


    But wait there’s more, the judge approved a substitution of plaintiff in our case but the original plaintiff accidently mailed us the “original” note/deed/servicing docs. We’ve had threatening calls from the lawyers, they called the local police to pay us a visit to get the docs back. Now they’ve put in an “Emergency Verified Application for Temporary Restraining Order & Injunctive Relief Ordering Defendants to Immediately Deposit Collateral File in the court Registry Pursuant to Rules 1-066 and LR1-309”. Suddenly the tables have been turned and they have lost custody of these “special” docs. But they were careless with what is regarded as Thousands of dollars in payables–there was no insurance, no signature required. Violins are playing in the background right now.

  2. Is this the same as possessing the note? It was on a proof of claim in from BONY Mellon, alleged trustee of the passthrough trust my loan entered while in arrears, 4 years after I signed the loan docs.

    “Note holder, directly or through an agent, has possession of the promissory note. The promissory note is either made payable to Note holder or has been duly endorsed.”

    Like, they know they saw it once and they know it’s somewhere. It definitely said something on it, but they’re not sure what. No worries though–they have it. Or someone else does.

  3. in the 5 plus years since my foreclosure I’ve watched and read this site and few if ever has anyone mentioned the mortgages owned by FreddieMac. Wells serviced my loan and said Fredie owned it..YET Wells foreclosed on me NOT FREDDIE.. NO transfer of title was ever recorded by Wells to Freddie… No mention of them ever EXCEPT WHEN I TRIED TO GET THE MODIFICATION.. then Freddie was everywhere as an excuse. How can this be I’ve asked a multitude of lawyers 5 years ago… who all shook their heads? So if Wells didn’t own my mortgage HOW could they foreclose on me? Why would NO lawyer here in AZ want to take that case on if what you say is true about owning the note? this I would surely like to know.

  4. Shadowcat, in regards to your question, Sheesh, ..I can’t Imagine why they would destroy the original note..
    CAN YOU?
    you need to look no further than WHY they destroy them. When they fraudulently put that purported note into a trust, they multi-pledge it, meaning, put it into multiple trusts – securities fraud (CRIME) and what is the proof of that crime, THE SAME DOCUMENT – THE PURPORTED ORIGINAL, which actually NEVER existed for numerous reasons……so they are trying to cover up a crime on one hand and in the other hand recreating documents to create the illusion of “originals” to use against you the homeowner and gain a fraudclosure and take your home……

  5. Reblogged this on UZA – people's courts, forums, & tribunals and commented:
    We are so asleep in Africa, we do not even know what the UCC is 🙂 and, those who do have not bothered to read it; thanks for some background education on it; in peace

  6. (k) In accordance with the terms of this Agreement, the Master Servicer
    (and any successor servicer) shall apply proceeds received in connection with a liquidation of, or
    final recovery of amounts under, any mortgage loan serviced under this Agreement, as well as
    any recovery resulting from a partial collection of insurance proceeds, liquidation proceeds or
    condemnation proceeds in respect of any mortgage loan, to reimburse any previously
    unreimbursed advances with respect to such mortgage loan

    prior to applying such proceeds to the
    payment of interest and principal on such mortgage loan.

  7. would love to see this proof. please email me, you will see am not a bank. djabelanger@hotmail.com

    El Be, on June 28, 2016 at 6:48 pm said:
    Sorry, the summation is correct but the origination is wrong. THE FEDERAL RESERVE FUNDS THE “note” to the “BANK” = borrower and signer of the “NOTE” , BUT THE “FUNDS” go to the “TITLE COMPANY” which then sends it, usually to Wall Street. And I can prove it.

  8. If you can’t beat them, Join them. 😀

    Have a Safe & Blessed Holiday ! 🇺🇸


  9. Unsolicited & Illegal
    Reverse Purchase & Sale

    Can you say Undisclosed? Misrepresented?
    Fraud is such a Harsh word….

  10. The PPM securities holders WHO ARE the Registrations Security Issuers were allowed to construct a New York Indenture holding FRACTIONAL SHARES (not all) of the Estate TRANSFERRED AND CONVEYED IRREVOCABLY INTO TRUST!!!!

    What fractional share of the Estate did you

    PAY THOSE TAXES!!!!!!!!!

  11. Sheesh, ..I can’t Imagine why they would destroy the original note..

    CAN YOU?

  12. The Defendants held a Savvy set of improprieties and unethical procedures that included CREATING TWO WIRES FROM ONE LOAN,
    as well as the Estate using the Stripped Title as a TRANSFER & SALE INTO TRUST, and by SUBSITUTING OUT THE ORORIGINAL AGREEMENTS AND NOTE WITH
    PURCHASER SELLER “Installment Contract Sale,

  13. The original, or your copy, is not the same size of a copy…the only thing anyone could possess once securitized. As with the forensic examination it would be determined from the outset it is a fraudulent copy. They use the same standard which is used in counterfeit dollar bills…the real bills are a specific size and the counterfeit is a completely different size. The government put these forensic rules in place to stop fraud dead in its tracks.

  14. My commonsense says, if a promissory note had been transferred from the original lender to another entity, it must be signed and notarized in sequence from the original lender to the party who currently owns it. Does the UCC state anything on this commonsense requirement. If so, kindly mention the section.

  15. The only time I can truly verify my signature is right after I’ve signed a document.

    After that, I don’t know if it’s a good forgery, copy, electronic pen, color laser printed, ink stamped, or some other technology that replicated it.

    That’s my truth. That’s my fact.

    Trespass Unwanted

  16. Neil said:
    Back when I stared law practice a representative of the lender was frequently present at closing. Once all the papers had been properly signed and money was received by the closing agent to fund the loan, the closing agent would physically deliver the note to the representative of the lender or transmit this valuable document (“cash equivalent”) to the lender or its authorized representative.


    My experience is not ‘once all the papers had been properly signed’, it was after some papers were signed, and the promissory note was signed, creating the funding, that the agent physically took the note out of the room with some excuse about making copies of everything, and the next paper put before me was the DOT to turn around and put what was funded, into the hands of another as beneficiary, and make me a tenant.

    After I had signed the last doc, getting stuck with the authoritarian control of an HOA over everything I do with my property, that agent showed back up, with no copies what so ever, only to take the rest of the papers and then make copies and bond them with plastic ring bonding, into a book.

    They take the note out of the room.


    Like paying for a car with a check, and they take it out of the room, and you turn around and keep signing and end up leasing what you just bought.

    That’s my opinion anyways.

    Knowing that papers have an order to them and that things that are not symbolically there when agreements are made, can make all the difference in the world.
    If I sign a doc, I’m keeping it right there in the stack, no more of this, I give you this doc, you give it back and I give you another doc, mess, if it’s on the table, or in the room, it stays until we are done.

    Someone was holder in due course without full disclosure.
    They were trained to do it a certain way; whether they knew what they were doing; or knew I didn’t know.

    I’m certain there was an attorney in a room close by doing some representative thing without full disclosure too.

    I do not know legal things.

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

  17. EL Be If I own a house and the selling price is $200,000 then I as a seller wants $200,000 and there is no monies to send to Wall Street because the seller from the title company will receive the $200,000 at closing!

    Now the Securities are a different thing.

  18. This is the white paper from Robert Janes.


  19. Sorry, the summation is correct but the origination is wrong. THE FEDERAL RESERVE FUNDS THE “note” to the “BANK” = borrower and signer of the “NOTE” , BUT THE “FUNDS” go to the “TITLE COMPANY” which then sends it, usually to Wall Street. And I can prove it.

  20. Javagold, NOTHING, YOU DO **NOT** HAVE THE BURDEN OF PROOF, you must only speak the truth, and it is true, IT IS NOT AN ORIGINAL BEARING YOUR SIGNATURE ON IT.

  21. This is EXACTLY why about eight years ago, I truthfully denied my signature on what they purport to be “originals”

  22. Great article Neil on “Lending 101” and the explanation of the UCC. Now we just need to get someone who cares about all this, and more importantly, can or will do anything. The USDOJ, CFPB, and states like Colorado are completely turning their backs and offering a “deaf ear” when people reach out for help from these government agencies or any congress people.

    New people like Senator Corey Gardner of Colorado initially reached out to me on my problems with VA Medical Care and the horrendous problems with nasty old Bank of America and all their cronie companies like Shellpoint Mtg., Seterus, Core Logic, Safeguard Properties and MORE- just check the Internet (thank goodness for the magic of the Internet).

    I thanked him for getting the VA off the dime with another worthless and inept government entity VA Choice- check that one out (Health Net Government Services) and you can easily see where this is going!!!

    I thanked him for getting a supposed and true “trial modification program” at 2% on a property that was already in foreclosure by Bank of America and the Janeway Lawfirm (check them out and the nearly $650,000 they were fined back in late 2014 by the then Colorado AG John Suthers for over charging and other questionable practices) Rule 120 in Colorado, which some say is unconstitutional, takes away any and all rights of borrowers and the judge in my case merely took the “word” on the attorney from Janeway on the phone that they had the original note!!! Janeway and the huge firm of Blank and Rome had already sent a copy of very limited documents on this property that included in the first mailing a copy of an apparent forged, fabricated, and phony note endorsed in blank by Michele Sjolander and well known robo signer. The judge never mentioned any of these documents I had faxed to the court for my hearing and he quickly dismissed the case under Rule 120 and mocked me for bringing in an armload of evidence!!!

    Mr. Gardner got in two weeks what I had been trying to obtain for over fifty five (55) months working wtih 20+ different people from supposed office of the ceo and president of B of A-anyone talking with any of these people could quickly determine these people were all phony and making demands over and over again for personal and confidential documents to four different offices (New York, North Caroling, California, and Texas)!!! B of A had to follow up now with the offer, but they were already scheduled for a sale of that property on March 2, 2016!! Great case of “dual tracking”- wrong. They have now postponed the sale 3 times and have it scheduled for July 20m 2016.

    Gardner has completely disappeared from the scene now and his officer has never returned any calls, Emails for faxes which is just like all the may congress people I contacted, even Waters!! Their are many stories out there that most congress people and others have been bought off and I would certainly tend to agree. Very interesting to say the least.

    Just too bad that I am a 71 year old Vietnam Veteran with no money to fight these dirty rotten scoundrels and I have 4 other properties that I will lose based upon phony, fabricated, and forged documents- even late, supposed assignments done in late 2013 and 2014 are executed by known robo signers and executed in blank on one page where there was more than sufficient space for doing a proper and true assignment. That is my story and I am sticking to it.

    Thanks again for ALL you have done and do Neil- it has bee a great help to me and some comfort. Semper Fi, we need to get as many people as possible involved in all this scandal that has reemerged in spite of the National Mortgage Settlement and the epci case with the USDOJ of nearly $17 BILLION with nasty old B of A- where has all this money gone- not to help people like me and so many others:( Also sad that attorneys and their clients like the “Morrows” in the Montana Supreme Court Ruling agreed to a big settlement for a completely private and confidential settlement- guess I can’t blame them, but that is not the way I do things as there are too many fellow Veterans and other property owners who need help and support. Again Semper Fi!!!

  23. The originator of the loan does not have to provide proof of purchase as they did not purchase the loan but originate it. UCC9 tell the non originators that they must provide proof of purchase when petitioning the court, to call the loan due!

    1.3 million Washington Mutual Bank (WaMu) Ginnie Mae pooled loans that Wells Fargo Bank was servicing would all need proof of purchase after Sept 25, 2008 the day WaMu died! There are only two parties that have a financial interest in the loans and that is the lender & borrower who paying or paid principal & interest payments.

    Wonder why the regulators are now requiring the banks to have a “Will”? When WaMu failed it took a $335 billion lost and the 1.3 million loans could not be seized by the Fed Gov because they had not purchase the debt. Fannie & Freddie are finding that they have a problem proving the paid the lenders for these other loans!

  24. Oops I am not an attorney but I would advise hiring an attorney

  25. Watch the show Pawn Shop and do what they do hire an expert

    Not an attorney

  26. No that’s not my signature, your honor. Now what ????

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