This is found in UCC 1-302 Parties Power to chose applicable law.
What you seem to fail to perceive is that the making of the original note is one transaction. Each and every negotiation of the note is another separate transaction.
Mr. Roper has discussed this in another thread and as I recall posted some cases about it.
The note is usually controlled by the law of the place of execution unless it contains a contrary provision. Each negotiation is controlled by the law of the place of negotiation. Mr. Roper discussed this with respect to the validity of allonges in another thread.
Negotiation requires indorsement and delivery. Negotiation is usually completed by delivery so usually the law of the place of delivery controls.
Most mortgages contain an express choice of law provision. The choice of law provision usually specifies that the law of the place where the property is located controls.
The PSA, which is not a negotiable instrument, but rather is either a contract or a trust indenture or both usually also has a separate choice of law provision controlling that contract. Often, the choice of law provision of a PSA specifies New York law.
While the PSA contemplates the sale of mortgages as well as their negotiation, the PSA is usually NOT the instrument of sale itself. To the contrary, very often there is one or more separate document which constitutes the agreement of sale of the mortgages and the process for negotiation is discussed in the PSA, is contemplated by the PSA, but is not usually contemporaneous with the PSA. To the contrary, the PSA typically contemplates a closing at which the mortgage collateral is to be conveyed as of the specified closing date.
You are way out of your depth and seem to have little understanding of that which you seek to discuss. You have a LOT of homework to do and your time would probably be much better served studying the posts of others, especially Mr. Roper, rather than seeking to teach others as to topics about which you have minimal knowledge and understanding!
If you want to teach us anything about PSAs, why don't you first read 500 or 1,000 PSAs start to finish and then get back to us. Most at this site have little interest in the wingnut trash you discovered on your first web search and inquiry into a complex topic.