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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Texas

Can an Allonge be a Forgery?

Visit the Uniform Commercial Article §3-202, actually for this exercise the writer will be using California Commerce Code §3202 & §3202: other states are similar in verbiage.

 

   (a) Negotiation is effective even if obtained (1) from an infant, a corporation exceeding its powers, or a person without capacity, (2) by fraud, duress, or mistake, or (3) in breach of duty or as part of an illegal transaction.
   (b) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.
 
It is possible to determine holder in due course of a negotiated note and it is also possible to discern who claim to be holder is only in possession.
 
What about California Commerce Code §3203:
   (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
   (b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.
   (c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the Indorsement is made.
   (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this division and has only the rights of a partial assignee.
 
From subsection A to C it is clear that an Allonge would be applicable for obtaining Holder in Due Course where an indorsement is missing upon the face of the instrument except when subsection B applies to fraud or illegality affecting the instrument..
 
To substantiate subsection (d) one needs to turn attention to the Security Instrument that was to secure the instrument. In this example we shall use verbiage from a standard Fannie Mae Security Instrument[1]:
 
20.  Sale of Note; Change of Loan Servicer; Notice of Grievance.  The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.
 
“or a partial interest in the Note (together with this Security Instrument)” is substantial in the fact it supports along with the notes standard being” indorsed in blank” the need to create an allonge. In reviewing the securitization process it is evident that we have A as the originating lender and  B, C, D as intervening parties to investor purchase of the intangible certificates. Not that the tangible note arrived via negotiation to the investors collateral pool, in fact the tangible note by legal definition never lawfully left A. Whereas D acts as servicer to conceal the failure of fiduciary duty and applying subsection (b) “Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.} an allonge could not be created to give the illusion the tangible note was negotiated and further applying subsection (d) of California Commerce Code §3203 the investors purchase of an intangible interest in the tangible note reducing the value of the tangible note would not allow the note to be negotiated and therefore no subsequent holder of the tangible note could be a Holder in Due Course. Whereas the Security Instrument hints as the Security Instrument is to follow the intangible obligation, one would need to inquire of such instrument eligible for recordation to secure a tangible note as the Security Instrument does not comport to law. 
 
Who is the Holder in Due Course of a Secured Instrument?
NOBODY…
 
Who is the Holder in Due Course of an Unsecured Instrument?
“ A “


[1] https://www.fanniemae.com/singlefamily/security-instruments

Assignments and allonges go hand in foot for robosigning.

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    The short answer is yes! They usually are forgeries, especially when the assignments of the
mortgage do not match the endorsements on the Allonge to the Note.
    In my experience, what usually happens is that the originator (A) went out of business without
having ever transferred the obligation to any third party. The borrower (B) won the "death gamble"
(mort gage) fair and square and should own the property "free and clear".
    But the servicer (S) "croupier" decides to steal the winning bet off the table and claim the prize,
the house, for itself.
    So (S), using a counterfeit, color, photocopy of the Note, gives itself a "power of Attorney" from
the "dead" originator, to transfer the obligation into a "phony trust" as the plaintiff in the foreclosure
case.
    "S" also gives itself a "phony" POA from the "phony trust" so it can "verify" the Complaint and
commence the foreclosure action.
     During the couse of the foreclosure action, it fabricates a phony endorsement or allonge for the
phony Note, and very often records a phony assignment of the mortgage from the dead lender into
the phony Trust by the use of MERS. Very often, this phony assignment occurs years after the originator (A) was dissolved and no longer exists and could not possibly be a member of MERS.
     Surprisingly, most attorneys and pro ses do not pick up on this "flim flam" and call attention
to it with the Judge. When they do, the case usually gets dismissed.
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Texas

Uniform Commercial Code Article §3

§ 3-201. NEGOTIATION

  • (a) "Negotiation" means a transfer of possession, whether voluntary or involuntary, of an instrument by a person other than the issuer to a person who thereby becomes its holder.(Thief in the night.)

§ 3-203 (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this Article and has only the rights of a partial assignee. (Reference Security Instrument, “interest in&rdquo

  • (b) Except for negotiation by a remitter, if an instrument is payable to an identified person, negotiation requires transfer of possession of the instrument and its indorsement by the holder. If an instrument is payable to bearer, it may be negotiated by transfer of possession alone.

§ 3-202. NEGOTIATION SUBJECT TO RESCISSION

  • (a) Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, or a person without capacity, (ii) by fraud, duress, or mistake, or (iii) in breach of duty or as part of an illegal transaction.

§ 3-202 (b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument. (Reference Security Instrument, “interest in&rdquo

  • (b) To the extent permitted by other law, negotiation may be rescinded or may be subject to other remedies, but those remedies may not be asserted against a subsequent holder in due course or a person paying the instrument in good faith and without knowledge of facts that are a basis for rescission or other remedy.

§ 3-203. TRANSFER OF INSTRUMENT; RIGHTS ACQUIRED BY TRANSFER

  • (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.

(b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.

 (Paradox to § 3-202. (a) Negotiation is effective even if obtained (i) from an infant, a corporation exceeding its powers, or a person without capacity, (ii) by fraud, duress, or mistake, or (iii) in breach of duty or as part of an illegal transaction)

  • (c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made.
  • (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this Article and has only the rights of a partial assignee.

§ 3-204. INDORSEMENT

  • (a) "Indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser's liability on the instrument, but regardless of the intent of the signer, a signature and its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement. 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.
  • (b) "Indorser" means a person who makes an indorsement.
  • (c) For the purpose of determining whether the transferee of an instrument is a holder, an indorsement that transfers a security interest in the instrument is effective as an unqualified indorsement of the instrument.
  • (d) If an instrument is payable to a holder under a name that is not the name of the holder, indorsement may be made by the holder in the name stated in the instrument or in the holder's name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection.

§ 3-301. PERSON ENTITLED TO ENFORCE INSTRUMENT

"Person entitled to enforce" an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument. (Thief in the night.)

Yikes, it looks as all the bases were covered to even allow for a criminal to claim Holder with rights, except § 3-203 (d) provides that not even a thief in the night can become a holder with rights where the full value of the instrument was not transferred or negotiated.

In not applying § 3-203 (d) one would be inclined to believe that just mere mechanical possession of the instrument provides rights of enforcement. However, having mechanical possession without rights and postulating the claim to rights is only a mechanical gesture, it is not supported by statutory law

 In  applying § 3-203 (d) along with what is common Covenant #20 within a Security Instrument to which was to secure to the instrument, we find fraud in conception by claiming the Security Instrument follows the intangible obligation identified within the Security Instrument which following the intangible obligation is totally opposite of statutory and case law. But such fraud has been excluded by the Article(s) to allow enforceability of the instrument by an innocent subsequent purchaser. With fraud present within the Security Instrument, can under statutory law the Security Instrument attach and perfect to the instrument a lawful alternate means of enforcing the instrument?

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I am confused (as always) So does it mean we can't challenge the endorsement  on the Note? UCC 3-202 (a)
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Texas
Indorsement sometimes equal to an allonge containing the Indorsement.
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Pro se
Texas wrote:
Indorsement sometimes equal to an allonge containing the Indorsement.


yes, but it must be firmly attached to the Note, so it becomes part of the Note. The issue is can we challenge the endorsement its self ? Like it was executed without proper authority ? 
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Texas
Read in the reverse, an allonge containing an indorsement sometimes equal an indorsement.

Have never, will never give legal advice. Facts and statutes are what they are, in applying those facts to individual scenarios into the legal arena is left to those who are eligible to practice law before the court.
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FnDoomed

Quote:

The issue is can we challenge the endorsement its self ? Like it was executed without proper authority ?



See UCC 3-308 and official comments.  Authenticity and authority is assumed unless specifically denied in the pleadings.  See relevant case law for your authorities. 

Contract law says that as a non party to the indorsement then you have no standing to challenge a technicality that would merely render the assignment voidable at the election of the assigner.



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FnDoomed wrote:

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The issue is can we challenge the endorsement its self ? Like it was executed without proper authority ?



See UCC 3-308 and official comments.  Authenticity and authority is assumed unless specifically denied in the pleadings.  See relevant case law for your authorities. 

Contract law says that as a non party to the indorsement then you have no standing to challenge a technicality that would merely render the assignment voidable at the election of the assigner.





1. Does anybody know where to get the official comments ? Cornell Law stopped showing.

2. Relevant Florida statue : 673.3081 Proof of signatures and status as holder in due course.
(1) In an action with respect to an instrument, the authenticity of, and authority to make, each signature on the instrument is admitted unless specifically denied in the pleadings. If the validity of a signature is denied in the pleadings, the burden of establishing validity is on the person claiming validity, but the signature is presumed to be authentic and authorized unless the action is to enforce the liability of the purported signer and the signer is dead or incompetent at the time of trial of the issue of validity of the signature. If an action to enforce the instrument is brought against a person as the undisclosed principal of a person who signed the instrument as a party to the instrument, the plaintiff has the burden of establishing that the defendant is liable on the instrument as a represented person under s. 673.4021(1).
(2) If the validity of signatures is admitted or proved and there is compliance with subsection (1), a plaintiff producing the instrument is entitled to payment if the plaintiff proves entitlement to enforce the instrument under s. 673.3011, unless the defendant proves a defense or claim in recoupment. If a defense or claim in recoupment is proved, the right to payment of the plaintiff is subject to the defense or claim, except to the extent the plaintiff proves that the plaintiff has rights of a holder in due course which are not subject to the defense or claim.



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Texas

Ohio

http://law.justia.com/codes/ohio/2006/orc/jd_130336-54dd.html


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This message is directed to the seniors, like 'allmighty" W.A.R. FnDoomed and others:

basically, how do I prove that :"there is a dispute as to the indorsement and delivery of the negotiable instrument"?

I am just learning all this stuff.  I am in NY
Also FnDoomed: How do I collect  / gather  authoritative cases pertinent in NYS?

I am going to the local law library, but I just dont know where to start

I you give me a quick start up give would be great

Mr roper stated that the assinment thing is not as important as the UCC related matters


and you can send an emailto: frangelo93@hotmail.com       Thank in advance



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FnDoomed
The mortgage assignment really is less important than the UCC.  That's not to say it can't be used.  For example in Drouin the assignment was from a company that went out of business years before and the judge shot down the FC.

I have a collection of roper essays and some good cases to whet your appetite in Foreclosure Defense 101 here.   From that document you can get LegalAidPC which is a special purpose web browser that I built to help research cases.  It doesn't do anything that you can't do yourself but it makes things easier.

Go to scholar.google.com - select your states and/or feds and/or BK courts.  I'd start by querying for cases that explicitly quote a relevant statute.  Be sure to wrap your query in quotes " for an exact match.  Here are some examples.  Note that I haven't actually read any of these...

442 BR 10 - Bankr. Court, D. Massachusetts, 2010 - Google Scholar
... "In an action with respect to an instrument, the authenticity of, and authority to make, each
signature on the instrument is admitted unless specifically denied in the pleadings." GL c. 106, §
3-308(a). This is an action with respect to 15 an instrument: in Count I, Wilson seeks a ...

In re Hunter

466 BR 439 - Bankr. Court, ED Tennessee, 2012 - Google Scholar
... concerning proof of signatures: (a) In an action with respect to an instrument, the
authenticity of, and authority to make, each signature on the instrument is admitted
unless specifically denied in the pleadings. If the validity of ...

IN RE HOOPER

Bankr. Appellate Panel, 9th Circuit, 2012 - Google Scholar
... commercial law. Fed. R. Evid. 902(9). The applicable general commercial law of
California provides that: "Each signature on the instrument is admitted unless
specifically denied in the pleadings." Cal. Com. Code § 3308. The ...

IN RE VOGLER

Bankr. Court, MD North Carolina, 2009 - Google Scholar
... Gen. Stat. § 25-3-308 (a), which provides as follows: In an action with respect to an
instrument, the authenticity of, and authority to make, each signature on the instrument
is admitted unless specifically denied in the pleadings. If ...

STATES RESOURCES CORP. v. Harris

Dist. Court, WD Missouri, 2009 - Google Scholar
... Missouri law, which governs this action according to the terms of the promissory note, provides
"[i]n an action with respect to an instrument, the authenticity of, and authority to make, each
signature on the instrument is admitted unless specifically denied in the pleadings." Mo. ...

PAATALO v. JP Morgan Chase Bank, NA

Dist. Court, D. Montana, 2012 - Google Scholar
... 307, which provides in pertinent part: In an action with respect to an instrument, the
authenticity of and authority to make each signature on the instrument is admitted
unless specifically denied in the pleadings. If the validity of a ...

IN RE EDWARDS

Bankr. Court, ED Wisconsin, 2011 - Google Scholar
... and the authority to make them: (1) In an action with respect to an instrument, the
authenticity of, and authority to make, each signature on the instrument is admitted
unless specifically denied in the pleadings. If the validity of a ...

MILLON v. JPMorgan Chase Bank, NA

Dist. Court, WD Missouri, 2012 - Google Scholar
... Because that document was a negotiable instrument, "the authenticity of, and
authority to make, each signature on the instrument is admitted unless specifically
denied in the pleadings." § 400.3-308(a); see also Fed. R. Evid. ...

IN RE VACCARO

Bankr. Court, ED Tennessee, 2012 - Google Scholar
... concerning proof of signatures: (1) In an action with respect to an instrument, the
authenticity of, and authority to make, each signature on the instrument is admitted
unless specifically denied in the pleadings. If the validity of ...

WM CAPITAL PARTNERS I, LLC v. BBJ MORTGAGE SERVICES, INC.

Dist. Court, ED Michigan, 2011 - Google Scholar
... In particular, under UCC § 3-308, "[i]n an action with respect to an instrument, the authenticity
of, and authority to make, each signature on the instrument is admitted unless specifically denied
in the pleadings," and "[i]f the validity of signatures is admitted or proved," a party in ...






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Cabinetmaniac
FnDoomed wrote:


I have a collection of roper essays and some good cases to whet your appetite in Foreclosure Defense 101 here




Thanks Doomed, that's good stuff.
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Texas

Bearer Paper UCC Article 3

§ 3-204. INDORSEMENT

  • (a) "Indorsement" means a signature, other than that of a signer as maker, drawer, or acceptor, that alone or accompanied by other words is made on an instrument for the purpose of (i) negotiating the instrument, (ii) restricting payment of the instrument, or (iii) incurring indorser's liability on the instrument, but regardless of the intent of the signer, a signature and its accompanying words is an indorsement unless the accompanying words, terms of the instrument, place of the signature, or other circumstances unambiguously indicate that the signature was made for a purpose other than indorsement. 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.
  • (b) "Indorser" means a person who makes an indorsement.
  • (c) For the purpose of determining whether the transferee of an instrument is a holder, an indorsement that transfers a security interest in the instrument is effective as an unqualified indorsement of the instrument.
  • (d) If an instrument is payable to a holder under a name that is not the name of the holder, indorsement may be made by the holder in the name stated in the instrument or in the holder's name or both, but signature in both names may be required by a person paying or taking the instrument for value or collection.

§ 3-205. SPECIAL INDORSEMENT; BLANK INDORSEMENT; ANOMALOUS INDORSEMENT

  • (a) If an indorsement is made by the holder of an instrument, whether payable to an identified person or payable to bearer, and the indorsement identifies a person to whom it makes the instrument payable, it is a "special indorsement." When specially indorsed, an instrument becomes payable to the identified person and may be negotiated only by the indorsement of that person. The principles stated in Section 3-110 apply to special indorsements.
  • (b) If an indorsement is made by the holder of an instrument and it is not a special indorsement, it is a "blank indorsement."When indorsed in blank, an instrument becomes payable to bearer and may be negotiated by transfer of possession alone until specially indorsed.
  • (c) The holder may convert a blank indorsement that consists only of a signature into a special indorsement by writing, above the signature of the indorser, words identifying the person to whom the instrument is made payable.
  • (d) "Anomalous indorsement" means an indorsement made by a person who is not the holder of the instrument. An anomalous indorsement does not affect the manner in which the instrument may be negotiated.

§ 3-203. TRANSFER OF INSTRUMENT; RIGHTS ACQUIRED BY TRANSFER

  • (a) An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument.
  • (b) Transfer of an instrument, whether or not the transfer is a negotiation, vests in the transferee any right of the transferor to enforce the instrument, including any right as a holder in due course, but the transferee cannot acquire rights of a holder in due course by a transfer, directly or indirectly, from a holder in due course if the transferee engaged in fraud or illegality affecting the instrument.
  • (c) Unless otherwise agreed, if an instrument is transferred for value and the transferee does not become a holder because of lack of indorsement by the transferor, the transferee has a specifically enforceable right to the unqualified indorsement of the transferor, but negotiation of the instrument does not occur until the indorsement is made.
  • (d) If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this Article and has only the rights of a partial assignee.

Reference:

 

Excerpts of Covenant #16 and #20, FLORIDA--Single Family--Fannie Mae/Freddie Mac UNIFORM INSTRUMENT  Form 3010 [1]:

 

16.  Governing Law; Severability; Rules of Construction.  This Security Instrument shall be governed by federal law and the law of the jurisdiction in which the Property is located.  All rights and obligations contained in this Security Instrument are subject to any requirements and limitations of Applicable Law.  Applicable Law might explicitly or implicitly allow the parties to agree by contract or it might be silent, but such silence shall not be construed as a prohibition against agreement by contract.  In the event that any provision or clause of this Security Instrument or the Note conflicts with Applicable Law, such conflict shall not affect other provisions of this Security Instrument or the Note which can be given effect without the conflicting provision.

 

20.  Sale of Note; Change of Loan Servicer; Notice of Grievance.  The Note or a partial interest in the Note (together with this Security Instrument) can be sold one or more times without prior notice to Borrower.

 

Regardless of Savings Covenant #16, factual evidence provides the Security Instrument was filed of record containing Covenant #20. Facts go further that alleging an Intangible Interest (Intangible Payment Stream) was created; utilizing specialized Secondary Market research tools such as a Bloomberg Terminal, evidence from the specialized tools confirm that intangibles were created and sold to the secondary market under guise of lawful securitizing. This ripping of the payment stream intangible from the tangible Note and in compliance with UCC Article 3 §3-203 (d), made the tangible Note ineligible for negotiation for the tangible Note was not for full value. In further, the placement of the Indorsement by an Indorser also in applying UCC Article 3 §3-203 (d) does not transform the tangible Note not for full value to be “Bearer Paper” for Indorsement is a legal impossibility.

 

Within the scope of UCC Article 9 Secured Transactions, Intangible Obligations can be created and the intangible (payment stream) security attaching and perfecting and transfer of perfection to the intangible obligation would be under the governance of UCC Article 9. Regardless of the fact that most of the 50 states have adopted a version of the UCC, the UCC itself does not pre-empt other state law for the perfection of a Security Instrument to attach and perfect to a Tangible Note or the transfer of such rights.

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