Why would anyone allow the forced sale of a home to satisfy a claim for that remedy if the claimant had no right to receive any compensation or restitution from the homeowner?
The only real claim by any claimant in foreclosures today is that they possess the information and have built an infrastructure around it. But none of them own any debt, note or mortgage. Restitution for an unpaid debt has been set aside as an invalid point or irrelevant.
The answer from the courts is that because consumers signed a note, they owe money and their house to the claimant regardless of any entitlement to receive any money. The absence of a lender, successor lender or owner of the debt or note is now irrelevant in most courts.
In a mortgage transaction, the debt is the amount of money that the borrower agrees to pay back to the lender. The note is the legally binding document that outlines the terms and conditions of the loan, including the amount of the debt, the interest rate, the repayment schedule, and any fees or charges associated with the loan.
The debt is the principal amount borrowed, plus any interest and fees that are added to the loan over time. The note specifies the terms of the loan, including the interest rate, the repayment schedule, and any fees or charges associated with the loan.
The note also includes important information about the borrower’s rights and responsibilities, including the right to prepay the loan without penalty, the right to receive notice of any changes to the terms of the loan, and the obligation to make timely payments.
It is important for borrowers to carefully review the terms of the mortgage note before signing, as they are legally bound to the terms and conditions of the loan.
Prior to the structural evolution of syndication and other forms of joint lending to share risk, there was no practical difference between the debt and the note. A scenario in which there was any practical, legal or equitable difference between the debt and note was a very rare bird — usually because of errors in the documents.
Accordingly, most laws were drafted with that in that context — sometimes even defining the note as the debt or including the note within the definition of “debt.” This reminds me of the old expression coming from ancient Judeo-Christian law that “possession is 9/10s of the law.” That is all true, but what about the other 1/10th? And what happens when that last 1/10th is missing?
There is no doubt that the execution of a note creates the possibility of a liability that might be susceptible to enforcement just because the maker signed it. This is especially true in the scenario where a stranger (bona fide purchaser for value) pays for the note with something of value (i.e., legally recognized as value — i.e., money) in good faith and without knowledge of the maker’s defenses. This lifts the right of the purchaser to the status of a holder in due course — which specifically excludes most defenses by the maker, even if they are valid.
My observation back in 2006 was that nobody claimed that the designated claimant was a holder in due course. In reviewing more than 20,000 cases so far, I have not seen one case where there was an allegation backed by an affidavit or testimony or other documents corroborating the notion that the designated claimant was a holder in due course.
So my conclusion that continued for 16 years thus far is that the designated claimant if it exists, could have a status up to and including a holder but never a holder in due course. Thus all possible defenses of the maker apply. So what is a “holder?”
Under Chapter 3 of the UCC, which has been adopted verbatim in all U.S. jurisdictions as state law, a “holder” is one who (a) is in possession of the original note — or who has the right to possession (because they were the payor in a transaction relating to the homeowner or the seller) and (b) had been granted authority to enforce the terms of the note by the owner of the note either directly or indirectly through an authorized agent of the owner.
The two interesting parts are that the notes were customarily destroyed after “closing,” and there is never any evidence about the identity or existence of an owner who could legally grant the authority to enforce. The problem in the legal community is that they’re still thinking back to the time when debt=note. This error
That is not true anymore, and this one mistake has resulted in the loss of homes by millions of homeowners and the gift of trillions of dollars to companies with absolutely no financial interest or investment in the debt nor even possession or right to possession of the note. And they, indeed, never received authority to enforce the note from an owner whose grant of authority was legally enforceable.
Foreclosure is a legal process in which a lender attempts to recover the balance of a loan from a borrower who has defaulted on their mortgage payments. If the borrower is unable to bring their mortgage payments current and the lender is unable to reach a mutually satisfactory resolution, the lender may seek a foreclosure judgment from the court.
If a disinterested party has a valid legal claim to the property, they may be able to intervene in the foreclosure process and seek a foreclosure judgment in their own right. This could occur, for example, if the disinterested party holds a lien on the property or has a contract with the borrower that gives them an ownership interest in the property.
In order to get a foreclosure judgment, the disinterested party would need to file a lawsuit against the borrower and prove their legal claim to the property. If the court determines that the disinterested party has a valid claim and that the borrower has defaulted on their mortgage obligations, the court may issue a foreclosure judgment, which would allow the disinterested party to take possession of the property.
None of these conditions are ever met. Instead, a series of faux law firms with faux clients make unfounded claims based on fabricated, false, forged, and backdated documents of transfer.
If you go to any law professor, they will tell you that foreclosure must be a remedy to satisfy an underlying obligation owed to the party designated as the claimant. If the claimant has no such claim or does not exist, then there is no justiciable issue, and the court lacks jurisdiction.
But if you ask any judge the same question you will get a different answer that is not only erroneous it is a breach of basic constitutional principles, common law principles, and good sense. Why would anyone allow the forced sale of a home to satisfy claim for that remedy if the claimant had no right to receive any compensation or restitution from the homeowner?
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Documents of transfer do not convey any greater rights than existed in the grantor of such documents, but transfer documents (assignments, endorsements, powers of attorney etc.) are now treated as “evidence” of such rights. They are not.
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Under the laws of evidence, such transfer documents have been excluded as hearsay and have never have been evidence of the underlying right or obligation. This doctrinal law, solidified by statutes, existed for centuries and still exists despite the constant error in the courts of assuming the law is otherwise or that the court’s discretion is broad enough to make new law — a fundamental breach of separation f powers codified in our U.S. Constitution.
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