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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William A. Roper, Jr.
I ran across some very old guidance in authoritative cases on alteration of instruments which might merit some further investigation.  This note is less to fully discuss this topic than to initiate a thread for further exploration, discussion, analysis and exposition.

The text I ran across was the topic "97 - Alteration of a Written Instrument" within the book Cases on the American law of contract,  edited by Reuben Moore Benjamin, A. J. Messing (Indianapolis, IN: The Bobbs-Merrill Company, 1911):

Cases discussed include Smith v. Mace, 44 N.H. 553 (NH 1863); Hayes v. Wagner, 220 Ill. 256, 77 N.E. 211 (Ill 1906); Fisher v. King, 153 Pa. St. 3, 25 A. 1029 (Pa. 1893); Cushing v. Field, 70 Me. 50 (Me. 1879), Wood v. Steele, 6 Wal. 80 (U.S. 1867).


There are no doubt a variety of more recent cases in various jurisdictions showing various boundaries and contours of the law in this area.  But I thought that these cases might prove to be thought provoking to some who are facing questionable evidence and particularly alteration of the instruments themselves (as with the forgery of an allonge, which is not expressly discussed).


The comments of others about these cases and others you find elaborating these ideas are solicited and appreciated!

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William A. Roper, Jr.
Is the addition of a witness signature by a person not present at execution a material alteration voiding an instrument?

Those who have read depositions of various robo-forgers and robo-perjurers might take an interest in the ancient cases of:

Homer v. Wallis, [NO NUMBER IN ORIGINAL], SUPREME COURT OF MASSACHUSETTS, HAMPSHIRE, 11 Mass. 309; 1814 Mass. LEXIS 86; 11 Tyng 309, September, 1814, Decided

Brackett v. Mountfort, [NO NUMBER IN ORIGINAL], SUPREME JUDICIAL COURT OF MAINE, COUNTY OF CUMBERLAND, 11 Me. 115; 1834 Me. LEXIS 1, April, 1834, Decided
These cases may show that the false addition of a purported witness after the execution might be a material alteration which VOIDS the instrument!


Some courts might distinguish as to whether the alteration occurred after delivery.  But an interesting rub for the careless robo-forgers is that the criminal enterprise orchestrating the forgeries is usually the grantee and/or a contract forger employed by the grantee, with the primary signatory purporting to act as an officer of the grantor.  But to the extent that the persons whose names are falsely added as subscribing witnesses AFTER the execution of the forgery are employees of the grantee or a contractor and agent of the grantee, isn't presentation of the instrument to the false witness a delivery of the instrument to the grantee?

Of course, a forgery is a nullity which would be void in any case.  But proving the fact of forgery might be more difficult than merely proving alteration after execution, where witnesses generally concede under oath that the signatures of subscribing witnesses were falsely added to the instrument AFTER its execution by persons who do not actually witness such execution.

At a minimum, this seems to be an additional prism through which to view and consider facts relating to post execution alteration of the instrument.  Check the law and cases of your jurisdiction!

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William A. Roper, Jr.
I kind of like this language from the ancient Pennsylvania case Fisher v. King, 153 Pa. St. 3, 25 A. 1029 (Pa. 1893), though the alteration was found in that case not to be a willful alteration:
"As to the averment, that there was a material alteration of the instrument after delivery, the evidence shows only the parties to it were present when it was sealed and delivered by King to Fisher.  Fisher then left the house with the bill, and called upon Robert T. Kind, brother of the defendant, who wrote his name in the place where should appear the name of a witness.  If this was willfully done, with the knowledge and consent of Fisher, even though no additional liability was imposed on the obligor, it avoided the instrument.  The application of this rule does not, in case of a willful alteration, depend upon the injury done in the particular case; but it is said in Neff v. Horner, 63 Pa. St. 330, its true ground is public policy, to insure the protection of instruments against fraud and substitution.  And it has been held to be a material alteration to cause the name of a person to be placed on a note as witness who was in no respect a witness to any part of the transaction.  Home v. Wallis, 11 Mass. 312.  If there be a material alteration by the payee after delivery, willfully, however innocent the intention, or however slight the prejudice to the maker, the instrument is avoided."


In this particular case, the instrument was NOT voided when it appeared from the testimony that what had been sought was NOT a false witnessing of the instrument, but rather the signature of an additional person as indorser and surety, but that this person, brother of the maker, had simply signed in the wrong place (in the blank as witness rather than on the back as indorser).

Does robo-signing the forged instruments with addition or witness names or an authentication by a person NOT present VOID the instrument in your jurisdiction?  It might be interesting to check the cases!

NOTE:  I haven't run this down to see whether the law in Pennsylvania has since been altered by statute or another more recent authoritative holding.  This case is intended to stimulate inquiry and discussion rather than as use as authority, absent thorough and complete research!
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William A. Roper, Jr.
Full text of the ancient Maine case of Brackett v. Mountfort is available online through Google Books:

It is perhaps noteworthy that in many jurisdictions an assignment might be valid under the statute of frauds even without a witness.  But one or more witness or the authentication of a notary would very often be necessary under a jurisdiction's recording acts to render the instrument eligible for recording.

It occurs to me that an assignment otherwise complete and delivered into the hands of an employee or agent of the grantee, which person not having been present at execution alters the instrument by the addition of a witnessing signature OR an authentication, is VOIDING the instrument through such alteration.

Comments, other related cases and discussion are solicited and appreciated!

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William A. Roper, Jr.
Other ancient Massachusetts and Maine cases relating to alteration of an instrument by belatedly affixing the signature of a false witness include:
Smith v. Dunham, [NO NUMBER IN ORIGINAL], SUPREME COURT OF MASSACHUSETTS, SUFFOLK AND NANTUCKET, 25 Mass. 246; 1829 Mass. LEXIS 54; 8 Pick. 246, March, 1829, Decided

Thornton v. Appleton, [NO NUMBER IN ORIGINAL], SUPREME JUDICIAL COURT OF MAINE, COUNTY OF YORK, 29 Me. 298; 1849 Me. LEXIS 9, April, 1849, Argued , 1849, Decided

But the Wisconsin Supreme Court seems to have reached a different result when it appeared that the addition of the signatures to a note failed to be a material alteration under that state's laws:
Fuller v. Green, [NO NUMBER IN ORIGINAL], SUPREME COURT OF WISCONSIN, 64 Wis. 159; 24 N.W. 907; 1885 Wisc. LEXIS 28, September 22, 1885, Argued , October 13, 1885, Decided

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William A. Roper, Jr.
In previous posts within this message thread, I had sought an exposition on the topic of alteration of instrument by reference to several ancient cases.  While there are still a number of such ancient cases to explore, I wanted to resurrect this topic and call the Forum's attention to some much more recent cases.

First, I would suggest a reading of the case In Re Kurak:
In Re Debra A. Kurak, Bankruptcy No. 08-13724-JNF. Adversary No. 08-1404, United States Bankruptcy Court, D. Massachusetts, 409 B.R. 259, 2009 Bankr. LEXIS 2969 (Bankr. Mass. 2009).

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William A. Roper, Jr.
Here are a couple of nice little tidbits from an old California appellate case relating to alteration of instrument (or incomplete instrument):
"Plaintiff contends that the deed was void for the reason that when executed by the grantor it was silent as to the names of the parties thereto, date of execution and description of property to be conveyed. As a general rule a deed so executed is void.  If the deficiencies are subsequently supplied and filled in by an agent of the grantor, his authority so to do can only be given by an instrument in writing.  (Harris v. Barlow, 180 Cal. 142 [179 P. 682].)  An exception to this rule exists where the changes in or additions to the instrument are inserted by the agent in the immediate presence of the principal. (Videau v. Griffin, 21 Cal. 389.)

. . .  Proof that the instrument at the time of the execution lacked the data necessary to constitute it a deed raises the presumption that the authority of the one later inserting the data was not in writing, "If such authority in fact existed, it should have been produced. In the absence of its production the presumption is that it did not exist.  Whatever authority, therefore, the attorney possessed upon the subject, we must regard as having been conferred by parol."  (Videau v. Griffin, supra.)  Similarly, where in the absence of written authorization it is claimed that the changes and additions are made in the immediate presence of the principal, the party who relies upon it has the burden of affirmatively establishing the fact."

Alton v. Haywood, No. 5028, 28 P. 2d 385, 136 Cal. App. 191, 193-4, 136 Cal. 191 (Cal. App. 3rd 1934).

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Federal Rules of Bankruptcy Procedure

Published by the Legal Information Institute, Cornell Law School, Dec. 2009, incorporating the revisions that took effect Dec. 1, 2009. For decisions interpreting the rules plus additional bankruptcy materials, visit the LII Bankruptcy page:

Rule 3001. Proof of Claim
(a) Form and content.
A proof of claim is a written statement setting forth a creditor's claim. A proof of claim shall conform substantially to the appropriate Official Form.
(b) Who may execute.
A proof of claim shall be executed by the creditor or the creditor's authorized agent except as provided in Rules 3004 and 3005.
(c) Claim based on a writing.
When a claim, or an interest in property of the debtor securing the claim, is based on a writing, the original or a duplicate shall be filed with the proof of claim. If the writing has been lost or destroyed, a statement of the circumstances of the loss or destruction shall be filed with the claim.

(d) Evidence of perfection of security interest.
If a security interest in property of the debtor is claimed, the proof of claim shall be accompanied by evidence that the security interest has been perfected.

Was a false assignment of the mortgage a proper transfer of a perfected lien?

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     Here's a new one on me. The definition of a "negotiable instrument" does
not include variable interest Notes which provide for late fees.
     What this means is that when you have a Count II for reestablishment of
a lost Note under the UCC negotiable instrument clause, if the Note being
reestablished has an adjustable interest rate and late charges, it is not a
"negotiable instrument" and therefore can not be reestablished!
     I thank Matt Weidner in Florida for pointing this out in Suntrust Mortgage
vs. Roberts case # 09-CI-019041Pasco County, Florida. He posted the case
     I have seen this very thing done many times and almost never see anyone challenge it. It is a point well taken, at least in Florida.
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William A. Roper, Jr.
Mike H:

The topic you raise is an interesting and novel one, though on balance I do not think it correctly belongs in this particular thread.

I was unfamiliar with this argument prior to your post, but find it an interesting argument worthy of further exploration.

The case you cite in support of the proposition, SunTrust v. Roberts, No. 09-CI-019041, Pasco County Circuit Court, Florida, is an ongoing case, rather than a decided case.  The Docket may be viewed using Uniform Case No. "522009CA019041XXCICI" and accessing the Pasco County records from the Clerk's site:

What seems to be linked from Matt WEIDNER's Blog is an answer he filed on behalf of Ms. Polly ROBERTS containing the argument you relate, NOT an order which finds the particular argument to be legally correct or valid:

This doesn't make the argument less interesting.  But while the answer might afford a template for making the argument, the case you cite doesn't afford authority in support of the argument.

The authority IS given in the Roberts Answer and the critical case citation is:
GMAC v. Honest Air Conditioning & Heating, No. 2D05-3583, 933 So. 2d 34 (Fl. App. 2nd Dist. 2006)
While I am unpersuaded that this case means what Mr. WEIDNER suggests it means, I think that the argument is at a minimum a reasonable extension of existing statute and case law and is probably far from frivolous in Florida appropriate cases.

Thanks for bringing the argument to our attention!

NOTE:  If this topic is something that others want to discuss and comment upon at any length, I would suggest reposting the information in a new dedicated thread NOT so much because it distracts from this thread, but rather for ease of finding by someone for whom this argument might be useful.

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William A. Roper, Jr.
Within the answer, Mr. WEIDNER also cites this case within the Circuit (trial) court:
Wells Fargo Bank, NA v. Christopher J. Chesney, et al., Case No. 51-2009-CA-6509-WS/G (6th Jud. Cir. Pasco. Cty. 02/22/2010 Stanley R. Mills, Judge).
While I do not doubt Mr. WEIDNER's veracity as to this case being supportive of his argument, I would want to actually READ the decision before citing it.

I do NOT find this case amongst the docket entries for Pasco County.  I think this is probably because the case has been determined and taken offline.

(I DO find two other foreclosures ongoing in which Mr. Christoopher CHESNEY is a party.)

I would think that IF this case is a strong decision showing judicial support for Mr. WEIDNER's argument, someone ought to obtain the order or decision and post it on Scribd for the benefit of all.  Reference to an unpublished case for which the decision is not readily available seems to me to be pretty thin authority.

I would be very interested in learning of instances where this argument has not merely been pled, but which has been the basis of a decision favorable to a defendant.
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Mr. Roper,

Here is a link to Wells Fargo v. Chesney:

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With regard to the Wells Fargo v. Chesney case, it is a lower court case.  I have not followed this case and do not know if the Plaintiff amended its complaint or appealed the lower court's decision.  
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I agree with Mike H. that the General Motors v. Honest Air case is a good case to use in Florida.  This case calls for a strict interpretation of UCC 3 with respect to the negotiability of an instrument.  

I have rarely seen it challenged.  I used the case myself.
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North Carolina Appellate Decision Raises New Chain of Title Issue
Today, May 09, 2011, 8 hours ago | Yves Smith
A potentially important North Carolina appeals court case, In re
Gilbert, has not gotten the attention it warrants.

In very short form, the borrowers, who were unable to obtain a loan
, tried to halt a foreclosure by arguing that the lenders
had failed to make required disclosures under the Truth in Lending Act
(which they hoped would allow for recission of the loan, and that the
party seeking to foreclose had not proved that it was the holder of
the Note with the right to foreclose under the instrument. The judges
nixed the TILA argument, affirming lower court decisions, but reversed
the superior court on the question of the standing of the petitioner.

In Re Gilbert May 3, 2011 North Carolina Appeals Court Decision

What is interesting is the logic of the decision, which blows a hole
in one of the pet arguments of the American Securitization Forum, that
possession of a note will suffice. We have argued that the contracts
that govern the securitization, the pooling and servicing agreement,
sets the requirements for conveyance as is contemplated in the Uniform
Commercial Code (its Article 1 allows for parties to make their own
arrangements as long as certain conditions are met). But if the
parties to a case do not argue that the PSA trumps the UCC (and many
do not), most judges will reason from the UCC, and securitization
attorneys have blithely assumed this will get them out of trouble.
This is the position asserted in the ASF’s white paper last fall:

Under the UCC, the transfer of a mortgage note that is a negotiable
is most commonly effected by (a) indorsing the note, which
may be a blank indorsement that does not identify a person to whom the
mortgage note is payable or a special indorsement that specifically
identifies a person to whom the mortgage note is payable, and (b)
delivering the note to the transferee (or an agent acting on behalf of
the transferee). As residential mortgage notes in common usage
typically are “negotiable instruments,” this is the most common method
to transfer the mortgage note. In addition, even without indorsement,
the transfer can be effected by transferring possession under the UCC.
Moreover, the sale of any mortgage note also effects the transfer of
the mortgage under Article 9. Securitization agreements often provide
both for (a) the indorsement and transfer of possession to the trustee
or the custodian for the trustee, which would constitute a negotiation
of the mortgage note under Article 3 of the UCC and (b) an outright
sale and assignment of the mortgage note. Thus, regardless of whether
the mortgage notes in a securitization trust are deemed “negotiable”
or “non-negotiable,” the securitization process generally includes a
valid transfer of the mortgage notes to the trustee in accordance with
the explicit requirements of the UCC.

The North Carolina judges blew a hole in that theory. This particular
foreclosure had some of the irregularities that are all too common,
but the borrowers were deemed to have abandoned the related arguments.
However, the judge focused on a specific failure in this deal which is
pervasive in securitizations: the final endorsement was to the
trustee, not the particular trust. The judges in the case goes through
multiple deficiencies in the transfer process: some transfers were
made by parties that did not have clear authority to do so, the
affidavits were unreliable (as in they were in some cases non-factual
and separately made inappropriate conclusions of law), and there was
no evidence provided that the securitization trust was the owner and
holder of the note (as in the not exactly compelling endorsements
ending with a trustee and not a particular trust were inadequate). The
most important part was this statement:

…the Allonge in the record contains no indorsement to Deutsche Bank
Trust Company Americas as Trustee for Residential Accredit Loans, Inc.
Series 2006-QA6

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