Illinois App. Ct.: Assignment Document Without Assignment of the Debt Conveys Nothing

So here, in black and white, is yet another appellate decision  confirming what I have said for 12 years: The assignment of the mortgage is merely the delivery of a piece of paper. It conveys nothing in terms of an interest in the real property or the right to foreclose the mortgage. BUT if the assignment of the document is accompanied by a sale or assignment of the allegedly underlying debt, then the assignment can be used as evidence of an encumbrance and the contractual right to seek foreclosure.

Just as a promissory note can be used as EVIDENCE of a debt and is not the debt, so too is the mortgage EVIDENCE of an encumbrance and the right to foreclose. Confusion on this issue has led to millions of defective foreclosures.

“ ‘[a]n assignment of the mortgage without an assignment of the debt creates no right in the assignee.’ ” Bristol v. Wells Fargo Bank, National Ass’n, 137 So. 3d 1130, 1133 (Fla. Dist. Ct. App. 2014) (quoting Vance v. Fields, 172 So. 2d 613, 614 (Fla. Dist. Ct. App. 1965); see also Elvin v. Wuchetich, 326 Ill. 285, 288-89 (1927) (assignment of mortgage on truck without transferring note transferred no interest in truck authorizing replevin).

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see Illinois Case Debt MUst Also be Assigned

This is why lawyers are necessary. Beneath each “self-evident” fact there are multiple layers of decisions that attempt to get it just right. Ignorance of those layers leads either to loss in court or a judge issuing an erroneous ruling.

In first year law school the contracts professor pounds into the heads of the students a simple phrase: “The note is not the debt. It is evidence of the debt.” That seemingly simple notion leads to other axioms. The note is indeed evidence of a debt but not necessarily proof of the debt — like a note signed in anticipation of receiving a loan or a car — and no loan or car appears.

The debt arises by operation of law under the legal presumption that when you get something it is not a gift — whether it is money or a car. You are presumed to owe the grantor something (usually money) at a fair rate of exchange or a price agreed by the parties. That debt exists regardless of whether anything is in writing anywhere.

So if I get $100 from you and there is no evidence of a gift, then I owe you $100 with or without anything in writing. That is the debt.

If I sign a note to you saying I owe the $100 to you and stating the terms for repayment, then the note is evidence of the debt and the debt is merged into the note so I don’t owe you $200 — $100 for the note and $100 for the debt. The note is is evidence of that debt and the terms of repayment. Not much can be said in defense other than that the debt was repaid and I have proof of that.

BUT if I sign a note payable to a party other than you then we have a problem. I received the money from you, but I executed a note to someone else at your request. OK, you still have a note that can be enforced. The merger doctrine still applies. (The debt is merged into the note).

NOW change the scenario  such that the third party is actually the party that “originated” or brokered the loan and you are not included in the paperwork even though you made the loan. Add the fact that I don’t know you made the loan. Unless there is a contract linking the third party and you the merger doctrine cannot work. Because the debt is the same in all instances —- when I received the money from you, I owe you $100. That is true even if I don’t know of your existence.

SO the gravamen of the fictitious claims by the banks is that a relationship is “presumed” between the originator and whoever ends up with the last assignment, endorsement (“indorsement”) or both. BUT as this case says, along with hundreds of others, is that if there is no actual exchange of value then there is no transaction, assignment or endorsement. And in that case the assignment is a nullity. It means nothing unless there is evidence of the sale of the underlying debt.

Just like the presumption is that your loan to me was not a gift, the transfer of a six figure debt is presumed to require valuable consideration (i.e., money), which is exactly what is stated in Article 9 of the UCC as adopted by all 50 states. There can be no enforcement of a mortgage without proof of value paid by the named enforcer.

AND there is the rub. Since the payee on the note and mortgage never gave me the $100 and nobody paid you the $100 that you gave me, the debt never moved. Therefore all documents purporting to transfer the note or mortgage are nothing in the eyes of the law (and common sense). Neither the note nor the mortgage can be successfully enforced by anyone, even though the fabricated enforcer can survive a motion to dismiss by alleging the basic elements of an enforcement action in its complaint in judicial states.

Fundamentally mortgage foreclosure is about money. That is why the ownership of the debt is vital to the efficacy of any document fabricated for purposes of foreclosure. The current “enforcers” are sham conduits for the major banks who serve as both underwriters of sham securities offerings and as Master Servicer of a non-existent trust. They are standing in the way of workouts and settlements of mortgages that were created in a chaotic, overheated market created by those same banks.

They have no place in the relationship between you and me. But you don’t even know that I exist because nobody has told you. And I know you are out there but I don’t know who you are. And if we could get together, we could probably work this thing out.


11 Responses

  1. Here is my personal “cheat-sheet” on definitions… not legal advice – just what I use to keep things straight in my head…

    Originator = the party creating or arranging the agreements between a Lender/Creditor and Borrower. Often the Originator acts simply as a “broker” yet names itself as Lender on the documents, but does not actually fund the Loan or risk any of its funds, thereby being Lender in name only.

    Lender = (true Lender) the party who actually or allegedly provides its funds to a Borrower or in borrower’s name for the purpose of a loan with the intent of being paid back the principal, often with additional interest.

    Creditor = the party (initially the true Lender) who has put funds at risk to or in the name of the Borrower or has paid a previous Lender or Creditor for the Debt, and having the right to enforce collection from the Borrower of the Debt, or to foreclose on the Mortgage if in default.

    Owner = the party(ies) holding legal title to a certain real property. The Owner must sign the Mortgage pledging that the Lender/Creditor has a lien interest in the property.

    Borrower = usually the Owner but may be another party or multiple parties with consent of the Owner. The Borrower must sign the Note.

    Loan = The act of providing funds to or for the Borrower to a third party(ies), with the mutual agreement that it be repaid under specific terms (not a gift), which creates the Debt.

    Debt = the actual funds loaned by the true Lender either to the Borrower or in the Borrowers name.

    Note = a promise or pledge by the Borrower to pay a sum certain to the Lender named on the Note, or to successor Creditors, and a promise by the Lender to provide the stated amount of funds to or in the name of the Borrower to a third party(ies).

    Mortgage = a pledge by the legal Owner of a property creating a lien interest in the property in favor of the true Lender/Creditor, to allow the taking of the property by a bona fide original or successor Creditor (the party with ownership/control of the Debt) if the Borrower defaults on the payment of the Debt.

  2. I’m not letting Wells Fargo off the hook USEDKARGUY. I told the idiot bank on the first mod to do it right. I thought they made a mistake in 2010. Oh gawd was I naive. I learned all their tricks and became wise to the game you spelled out. Yes they threaten to take the house and keep up the fraud mods to rack up in my case $39,000 in fees and interest ythat excess HAMP 2 percent. The goal is to get a foreclosuresale or short sale so the can collect all their inflated costs in an FDIC insurance claim. It’s the sto loss agreement they contrived in the TARP bailout

  3. my opinion to the georgia supreme court lets forget foreclosure and talk social security number and mers. if you seperate note using mers how can my put anything on my credit report. MERCORP rules state that mers is nothing without min number. It also states that non members cannot use a members id number which is the the first seven digits of the min. number. the government backs mers mortgages and their data base and calls equifax on the carpet about their hacked data. mers does not post their data base but their members do. some of their members are title companies.

  4. I relate to all these comments below! Wells Fargo are criminal! One staff tried to fix my foreclosure! Melisa King! She kept telling we made mistake I made the priest talk to her on Frid arranged to continue on Mon., she was terminated! I retained lawyer he was anither criminal! I wish if that cancer Wells Fargo to be imbeached they betrayed me to BSI & auctioned gone if u want me to go w group to congress I’m willing to join any program please

  5. Anything Wells Fargo does in a foreclosure is usually a sham.
    RSCOTT, I thought I was the only one doing this for 9 years.
    Good for you. One thing: modification is only used to get you to sign new documents making the modifier the lender. Poo poo on that.
    I had two mods and Wells breached them both. They want the house and the default credit-enhancement proceeds, that’s all.

  6. Reblogged this on and commented:
    From GG: Homeowners need all the help they can get. This a rare case where a homeowner sought and obtained some relief from foreclosure

  7. Wells Fargo is the sham enforcer in my foreclosure case. They mislead
    Me into an “in-house” predatory modification as a “solution” to avoid foreclosure. We are still in foreclosure court after nine years of Wells Fargo generating illegal fees and high interest by simply refusing to comply with HAMP. Just entered a motion to enforce Rule 114 which in Illinois requires banks to comply with any loss mitigation that applies to a loan, up to and including HAMP. Good to see a ruling against this bank.

  8. Are you referring to NEW appellate law?
    Ive argued this for years and Bassman is used to quash it.

  9. “But you don’t even know that I exist because nobody has told you. And I know you are out there but I don’t know who you are. And if we could get together, we could probably work this thing out.”

    Could this be reverse engineered if anyone who ever found out who lent them the money were to contribute the basic facts of the loan to a database? If we just had a partial skeleton we ought to be able to re-create the beast. They could say who brokered it, what parties are named on their note and deed of trust, what other parties entered the stage later on, and the dates for all those events. Of course, the robo-signers and various trustees should be included. Then someone who has all those players in their paperwork at about the same times would have a good guess regarding their real creditor.

  10. Is the best time to actually fight nonjudicial closure is in the open position to the FED?

  11. I have long thought that my issue could have been worked out if Wells Fargo was not an intermediary servicer trying to profit for themselves. Instead WF destroyed my life in pursuit of their illegal profit

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