Fla 4th DCA Gets It Right on Article 3 UCC

Finally! A court takes its time and analyzes the chain and discovers what? Insufficient proof of standing and ERROR on the part of the trial judge in preventing even a third party purchaser from introducing evidence that the endorsement of the note was a legal nullity.

This is bad news for the foreclosure mills who receive their instructions from servicers who receive their instructions from attorneys who represent the investment banks. Up until this decision in Florida they have been able to use a series of apparently facially valid documents to create the false appearance that the chain was real and proper.

See Cox v LSF9 Trust, US Bank as Trustee- 4th DCA Florida Holds that everyone in chain must have standing to enforce -DOC031220

Every party in the chain from lender to present claimant must have had standing and rights of a holder in order to have its “indorsement” be legally effective.

Otherwise the endorsement of the note is NOT a blank endorsement but rather an Anomalous endorsement — basically equivalent to a wild deed.

The case does not address other issues in securitization but it is a strong and persuasive case, step by step on Article 3 UCC as applied to enforcement of notes.

My opinion, of course, is that the authority to enforce a note may be evidence of authority to enforce the mortgage and raises presumptions about ownership of the debt. But if the borrower rebuts that presumption then the Plaintiff foreclosure mill must actually prove its case with evidence instead of presumptions starting with the fact that the Plaintiff exists and possesses a legal claim for repayment of an unpaid debt.

Bottom Line: The foreclosure mills can’t prove that anyone has a legal claim for repayment of an unpaid debt. They can prove that the unpaid debt exists but they can’t prove that the claim seeks to achieve repayment because, in securitization cases, the claimant is never the legal owner of the debt — i.e., the party who paid value in exchange for ownership of the debt and therefore the party who is injured by nonpayment.

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BTW there is no law that the style of a case must start with the name of the first Defendant or the name as ordered by the Foreclosure Mill. I suggest changing the paradigm by refusing to refer to the Plaintiff as US Bank and instead referring to LSF9 Trust, U.S. Bank as trustee or LSF9 certificate holders depending upon how the foreclosure mill worded it.
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Don’t say LSF9 certificate holders and then add US Bank as trustee because you are then directly admitting an untrue statement, to wit: that US Bank is a trustee for the certificate holders. It isn’t. US Bank has a relationship with one or more investment banks but absolutely no relationship with the investors or certificate holders who are never beneficiaries under the trust.
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Assuming there is some technical reason that the trust can be arguably said to exist, it does not possess a claim to enforce the debt unless (a) it is the owner of the debt or (b) it possesses the original note endorsed by a holder. Under (b) they can foreclose unless the presumption of ownership of the debt is sufficiently challenged such that the presumption no longer applies.
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Once the presumption does not apply then the claim still exists and judgement can be entered only if it is proven without reference to the presumption — i.e. with relevant evidence consisting of documents and supporting foundation testimony,.
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FORECLOSURE DEFENSE IS NOT SIMPLE. THERE IS NO GUARANTEE OF A FAVORABLE RESULT. IN FACT, STATISTICS SHOW THAT MOST HOMEOWNERS FAIL TO PRESENT THEIR DEFENSE PROPERLY. EVEN THOSE THAT PRESENT THE DEFENSES PROPERLY LOSE, AT LEAST AT THE TRIAL COURT LEVEL, AT LEAST 1/3 OF THE TIME. IN ADDITION IT IS NOT A SHORT PROCESS IF YOU PREVAIL. THE FORECLOSURE MILLS WILL DO EVERYTHING POSSIBLE TO WEAR YOU DOWN AND UNDERMINE YOUR CONFIDENCE. ALL EVIDENCE SHOWS THAT NO MEANINGFUL SETTLEMENT OCCURS UNTIL THE 11TH HOUR OF LITIGATION.
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5 Responses

  1. I’d like to see what you have, Bob G. You still have my email?

  2. ANON…I am concerned about NG’s constantly telling folks that these trusts do not exist. Contact me via PM. I have some things to show you.

  3. We have a live case in fed court in NJ. PMK for bank could not answer straight forward questions about ownership of the note…offering essentially, “I don’t know, you’ll have to check with the noteholder.” He was designated. The MSJ has been on the judge’s desk for nearly 5 months without a ruling. More when we know more.

  4. To add — it is not the borrowers saying “certificate holders” (or trust) and adding the trustee, it is the foreclosure attorneys doing that – even though they do NOT represent the trustee, and cannot represent the trust. But courts are wrongly allowing it. .

  5. Explanation is confusing here for what the case implies — holder with the right to enforce.

    Neil – .you write: “Assuming there is some technical reason that the trust can be arguably said to exist, it does not possess a claim to enforce the debt unless (a) it is the owner of the debt or (b) it possesses the original note endorsed by a holder”

    This reasoning allows foreclosure attorneys to claim a “Trust” can exist and either be the “owner” of the debt or possess the original note. This is against all law – and, it is exactly an issue I am up against and exactly what foreclosure attorneys promote to courts. Who do you claim holds the note for the “trust” — the servicer???

    The trust is the cited case here is not registered anywhere. No one can see a pooling and servicing agreement for the role of the trustee. No where is that discussed in this case.

    In order for a trust to operate, the legal holder is the trustee. But we know they are not really there – not in theory or representation. A trust cannot “hold” anything without a legal holder — UNLESS – they a registered as a corporation – then the members – not certificate holders are “holders.” Without documents we know none of this.

    You also write – “Don’t say LSF9 certificate holders and then add US Bank as trustee because you are then directly admitting an untrue statement, to wit: that US Bank is a trustee for the certificate holders. It isn’t.” That is is not the point. Yes, the trustee is not there — and that is what one should be showing beginning with representation.

    LSF9 is not a registered trust anywhere. It was developed AFTER the crisis. It is not the same.

    . . .

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