Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
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Can someone help interpret these allonges?  Little history.  Non-judicial state, MERS on DOT, Fannie Mae site has Fannie May as investor and Wells Fargo Banks, NA as servicer.  Got refinanced through a mortgage broker and were to make all payments to ABC Bank.  After about 7 payments to ABC Bank, we then got notice that we were to send payments to Wells Fargo Home Mortgage as they were now our servicer.  Made payments to WFHM.  Both husband and I lost our jobs.  Got a letter from Wells Fargo Home Mortg. stating we were in default and contact their atty, Dont Care Trustee Services.  Got NOD from Dont Care Trustee Services which at the end gave the date and stated Wells Fargo Banks, NA   By Dont Care Trustee Services, its duly authorized agent.  Then lower down on the page it says client: Wells Fargo Home Mortgage.  Confusing.  Others that I have talked to claimed that WF also changed names on them also.    

We filed BK 2 months before the scheduled auction.  In June, 2009, we received copies of the Relief from Stay.  I noticed 2 allonges and did not know what they were and did some research.  I read about how the banks misused allonges to cover up the lack of paperwork, etc.  Can someone, in your own personal opinion, interpret them.  I believe the second one is fraud.  Could I be right?  Here is how they look:

Lender:  Y Mortgage Corp                     
Borrower:  Me and Husband
Property:  gave address
Loan No./Min:   XXXXX              XXXXXXXX
This Allonge to Note is to that certain Note dated  XXXXX, executed by Me and husband in the amount of $XXXXXXX, in favor of Y Mortgage Corp as payee.  This Allonge is affixed and becomes a permanent part of said Note.  (You can tell that it was affixed to the Note because of markings-NO PROBLEM THERE)

Pay to the Order of ABC Bank
Without Recourse.
Lender:  Y Mortgage Corp   (Then it was signed)

Now this second one was included in the paperwork for Relief of Stay by Wells Fargo Bank,NA

Allonge To Note

Allonge to Note dated:   XXXXXXX
In favor of:  Y Mortgage Corp
And Executed by:      left blank
Pay to the order of, without recourse:  left blank

Dated:  XXXXXXX  (I have read that the date could be the day they printed the allonge.)

ABC Bank (This bank was taken over by another bank about the same time
               we were notified WFHM was our servicer.  Then that bank was
               taken over about a year ago by the FDIC)

signed by Herman John Kennerty, Title:  VP of Loan Doc

This allonge was not attached to the note (no markings to show it ever was) and the allonge to me seems to be made up/printed 6 months after the NOD.)

We filed Chapter 7.  Atty said since we cannot afford the house, there would be no need to address the Relief of Stay.  I asked questions and he kept telling me to just let the foreclosure go ahead and move on.  I have for the past year been doing research and have found lots of things that don't look right.   So if anyone can offer their opinion on the allonges, I be very thankful.  I am a big girl so I can take the news good or bad. Thanks.

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This allonge was not attached to the note (no markings to show it ever was) and the allonge to me seems to be made up/printed 6 months after the NOD.)

I have unfortunately become something of an expert regarding the statute and common law regarding allonges.  An unattached allonge is not a valid negotiation and results in Wells Fargo being a transferee under the UCC and not a holder.  That changes their rights.  Sad to say that the right to enforce is the one that remains with them.  Their status as transferee also leaves them open to any of the defenses that you can come up with.

Of course, even attaching an allonge to a note that was printed off a printer or otherwise digitally reproduced is a silly concept.

Get to know article 3 UCC in your state. 

Definitely read about the $20 million dollar staples.  Unless you live in NY, the UCC in play in that case is the last version, but the case law created in the decision is absolutely solid.

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Can you please expand on your statement about "Unless you live in NY"
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The UCC as adopted in NY is the 1950s version.  All other states have adopted the 1990s version. 
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William A. Roper, Jr.


The issue is NOT whether the borrower lives in New York.  Place of residence is almost totally irrelevant to a determination of choice of law as to the instrument itself, EXCEPT where parties to a contract have differing residences and place of execution is ambiguous or unknown.  Place of execution usually controls and it would usually be the place of execution of the acceptance, thogh the parties could alter this by agreement.

Neither is the question as to validity of negotiation whether the alleged promissory note or mortgage, deed of trust or other security instrument was executed in NY State OR whether the subject property secured by the mortgage or deed of trust is situated in New York.

The issue is whether the negotiation of the instrument is subject to New York law.  Negotiation is a separate transaction from the execution of the instrument.

So a promissory note executed in Ohio and subject to Ohio law as to its provisions, might still be subject to New York law in respect of a negotiation that occured in NY!

Negotiation has two elements:  indorsement and delivery.

Since negotiation is completed by delivery, some courts have held that it is the place of delivery that controls the law of negotiation.

An argument can still be made that an indorsement which is INVALID in the palce of making cannot be MADE VALID by its subsequent delivery elsewhere.  I think that this argument probably has merit.

I would argue that an allonge executed in New York state would at least have to be valid under New York law for it to be effective when delivered elsewhere.  I would also argue that an allonge valid elsewhere cannot be effective when delivered into New York state if it fails to satisfy New York law regarding negotiation and allonges.

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Chase is offering Cash for Key $10,000 t0 $20,000.  Will other banks follow ?

Chase offers mortgage holders a way out

By Mark Puente, Times Staff Writer
In Print: Saturday, April 30, 2011

JP Morgan Chase has a deal for some homeowners behind on their payments: If they'll accept a quick sale of their home, the bank will give them $10,000 to $20,000 and forgive what it loses on the mortgage.

Homeowners get the cash after the home is purchased in a short sale, meaning the buyer pays less than what the bank is owed.

Full story at

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William A. Roper, Jr.

See also our prior threads regarding allonges:


"Thinking About Allonges Under the UCC and New York Law"


"MERS & Allonge Help Explain"



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Here is well written brief on allonge attachment issue for whoever needs this. Judge has not ruled on this yet.


 William Roper Jr., I'd love to hear your opinion on this...




COMES NOW Vladislav Khomutov and Michiko Khomutov, (“Debtors”), by and through the law firm of Shelley D. Krohn, Ltd., and files this Opposition to the Brief filed by Prime Asset Fund II, LLC, (“Secured Creditor"), by and through the Cooper Castle Law Firm, (Docket Entry No. 184).


In January of 2007, the Debtors purchased three parcels of real estate and M & I Bank handled the financing of the three loans. The properties were all located in Las Vegas, Nevada with the following mailing addresses: 6033 Shenandoah Avenue, 6255 Mt. McKinley Avenue, and 60l2 Bryce Canyon Avenue. The Debtors made payments on the loans

until late in 2008 when they sought a loan modification from M & I Bank. The loan modification was approved but for whatever reason cannot be finalized until early 2009. The Debtor notices errors on the loan modification documents and seeks clarification. At this point, what had once been an amicable relationship between the Debtors and M & I Bank, begins to deteriorate. The Debtors request information and documents and M & I Bank refuses to produce anything. The Debtors receive notification in December of 2009 that their loans have been transferred. In December of 2009 and again in

February of 2010, demand letters are sent by the Debtor to the new servicing entity for an opportunity to review the note and deed of trust. Ultimately, the Debtor has to hire counsel to request an opportunity to review the notes and deeds of trust. This demand is made in May of 2010 but also goes unanswered. The bottom line is, neither M & I Bank nor the Secured Creditor ever comply with the Debtors’ reasonable request to review the notes, deeds and trusts and assignments.

Finally, on August 12, 2010, the Debtors file for Chapter 13 relief. The automatic stay is imposed as to all of the Debtors’ real property. The Debtors’ requests for proof of the transfer of the notes and deeds of trust from M & I Bank to the Secured Creditor continues. At a hearing before this Court in the Fall of 2010, the Secured Creditor finally produces the original notes and deeds of trust for the Debtors to inspect. However, there were no endorsements or allonges produced at that time. See Declaration of Vladislav Khomutov. The first time that the three (3) separate Endorsements and Allonges to Promissory Note (collectively referred to as “Endorsements”) were produced by the Secured Creditor to the Debtor’s counsel were on February 14, 2011 (one day before the continued Motion to Lift Stay Hearing). These three Endorsements were not attached to the original notes. In fact, they were separately stored in a express mail envelope, as if they had just been over—night mailed to Secured Creditor’s counsel. See Declaration of Shelley D. Krohn.


The issue before this Court is whether the Secured Creditor is the proper party to be seeking relief from the automatic stay. Debtor has argued from the beginning of his case that Secured Creditor did not have standing to terminate the automatic stay. Secured Creditor has now supplied a Brief that states because it has the notes, the deeds of trust and finally the endorsements and allonges, it is, in fact, the proper party to be seeking stay relief. The problem with the Secured Creditor’s position is that the endorsements are invalid under Nevada’s UCC laws and allonges are only permissible if there is

no blank space remaining on the negotiable instrument for endorsement.

A. The Endorsements are Invalid under NRS §104.3204.NRS §lO4.3204(l) states:

“Endorsement" means a signature, other than that of a singer as maker, drawer or acceptor, that alone or accompanied by

other words is made on an instrument for the purpose of negotiating the instrument, . . JC For the purpose of determining whether a signature is made on an instrument, a paper affixed to the instrument is a part of the instrument." (Emphasis added).

In the present situation the Endorsements are neither made on the notes nor are they affixed to the note. See Declarations of Khomutov and Krohn. The Endorsements are even attached as separate Exhibits to Secured Creditor’s Brief (See Exhibits G, H and T.) No attempt is ever made by the Secured Creditor to affix the Endorsements to the respective notes. Thus, under NRS §lO4.3204(l), the endorsements are invalid to transfer the notes from M & I Bank to the Secured Creditor.

Secured Creditor believes it is the holder of the notes. It believes that because it holds the original notes, deeds of trusts

and Endorsements, it now has the appropriate standing to lift the automatic stay. However, the facts in the present case are nearly identical to those in In re Weisband, 427 B.R. 13 (D. Ariz. 2010) and in that case, the creditor was found NOT to have standing. In Weisband, GMAC “. . . attached the Note with Endorsement and DOT as exhibits to the Motion.” Id; at 16. “However, for the Endorsement to constitute part of the note, it must be on ‘on paper affixed to the instrument’." Ig; at 19. Arizona’s UCC is identical to Nevada’s as it also requires an endorsement if not on the original instrument to then be on “a paper affixed to the instrument". See N.R.S. §47—3204 and NRS §104.3204(1). In Weisband, the Court found the evidence did not demonstrate that the Endorsement was attached to the Note. Ig; at 19. The exact same facts are true in this case. At no time were the three Endorsement ever part of the Notes or attached to the Notes. See Declarations of Krohn and Khomutov. There were no staple holes in the Endorsements to indicate that they had ever been attached to any other document. Ig;

The Weisband Court also looked to the Adams v. Madison Realty & Dev., Inc. decision for guidance. The Adams court; stated that:

. . . UCC section 3—202(2) [A.R.S. § 47-3204]: An indorsement must be written by or on behalf of the holder and on the instrument or on a paper so firmly affixed thereto as to become a part thereof. Since the endorsement page . . . was not attached to the note, the court found that the note had not been properly negotiated ....Following this same logic, Weisband found that GMAC did not become the holder of the note due to the improperly affixed Endorsement. Weisband at 19.


Secured Creditor has not introduced any evidence that these three Endorsements meet the requirements of NRS §104.3204. The Endorsements were not made on the actual notes nor were they made on a paper affixed to the notes. Thus, under the plain and unambiguous requirements of Nevada’s UCC and the case law of Weisband and Adams,

the Endorsements fail to properly negotiate the notes from M & I Bank to the Secured Creditor. Consequently, Secured Creditor is not a proper party to be seeking termination of the automatic stay and the motion for relief must be denied.

B. Allonges Are Only Permissible When There is no Blank Space to Permit Endorsement on the Original Note.

The majority view regarding the use of an Allonges provides that the use of an allonge is only permissible when there is no room on the negotiable instrument itself to permit endorsement. Pribus v. Bush, 118 Cal App. 3d 1003, 1011 (1981). In fact, it was this view that was adopted by the California legislature. ld; The general rule is that an instrument could be endorsed only by writing on the instrument itself, but that an exception to the rule allows the use of an attached paper “when the back of the instrument is so covered as to make it necessary." Bishop v. Chase, 56 S.W. 1080 (1900). Thus, the only time an allonge can be used to transfer an negotiable instrument is when the original negotiable instrument contains no blank space to permit any further endorsements. The allonge was created to be a mere exception to the general rule, not an alternative to the general rule.

Clearly the situation in the case presently before the Court demonstrates that the allonge should not be used as an alternative. There is plenty of room on the bottom of the notes for an endorsement such that a separate Allonge was not necessary. See Secured Creditor’s Exhibits G, H and I. There is no credible reason why M & I Bank should not have properly endorsed the notes themselves.

Therefore, the negotiation of the notes is invalid and the Secured Creditor is not the proper party to be seeking relief from the automatic stay.


The Debtors respectfully request that this Court deny the Secured Creditor’s Motion for Relief from the Automatic Stay on all three of the parcels of real estate; to wit: 6033 Shenandoah Avenue, 6255 Mt. McKinley Avenue, and 6012 Bryce Canyon Avenue, and for any other relief this Court deems appropriate.

Dated this 8“ day of March, 2011.


   I OCR'd this in a hurry, please check spelling prior to use.


  I welcome all comments at:


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Bill Kay:

I believe that this is a very creditable brief in opposition. 

I do NOT believe that it is a very sound strategy to critique live pleadings, motions or responses of defendants in a public Forum, particularly when these contain identifying information.

I see a couple of weaknesses and areas for improvement in the brief.  Identifying these at the Forum while the matter remains pending seems unwise.  Some of these might prove helpful at another stage in this case.

You are welcome to contact me directly, explaining your interest in this case, and I am willing to share some other comments privately.  And I am willing to supplement my remarks within this thread when the debtor-defendant's properties are no longer at immediate risk.

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Bill -- I don't think Pribus will help you - the no space test as used in Pribus no longer applies.  Unless of course you can bring it under NY law as William has pointed out previously.

The attachment argument should be a winner for you.

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