Mortgage Servicing Fraud
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William A. Roper, Jr.
For some time, I have been meaning to inaugurate a thread on the topic of incomplete instruments and, more particularly, assignments in blank.

I have introduced this topic before in a couple of other threads, including:

Distinguishing Indorsement In Blank and Assignment In Blank


Alteration of Instruments

Most will view this topic as somewhat arcane and will little see the practical value in this discussion and exposition.  Please be patient and indulge me.  In the course of coming months, the relevance and significance of this topic will begin to emerge!

To a certain extent, this post will merely be a crosslinking stub for future elaboration.

But in my leisurely reading of Blackstone's Commentaries on the Laws of England (1766) tonight, I came across some interesting three century old text which can inform our inquiry into the legal efficacy and status of assignments in blank and other incomplete instruments, in the discussion within Book II, Chapter 20 about teh requisites of deeds.

Here is what Blackstone had to say about some of the essential elements:
"We are in the next place to consider the requisites of a deed.  The first of which is, that there be persons able to contract and be contracted with the purposes intended by the deed: and also a thing, or subject-matter, to be contracted for; all which must be expressed by sufficient names. (f)  So as in every grant, there must be a grantor, a grantee, and a thing granted; in every lease a lessor, a lessee, and a thing demised.  [emphasis added]"
Footnote (f) identifies the authority for this assertion Stat. 13 Eliz. c. 5 (Statutes 13th Year of the Reign of Queen Elizabeth, Chapter 5).

Based upon this definition, we might well imagine that if you leave the name of the grantee OFF of an instrument, this might leave you with an incomplete instrument.  Sir William Blackstone understood this rather clearly almost two hundred fifty years ago.  It is taught to first year law students.  But an assignments in blank were good enough for $3 trillion in securitized mortgages, even though such an assignment would be legally ineffective.
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William A. Roper, Jr.

"The law is well settled that a deed without the name of a grantee is invalid.  It is said there must be in every grant a grantor, a grantee, and a thing granted; and a deed wanting in either essential will be void."
Richey v. Sinclair, 167 Ill. 184, 47 N.E. 364 (Ill. 1897).


We now turn briefly to three other arguments raised by the plaintiffs on appeal. First, the plaintiffs initially contended that the assignments in blank executed by Option One, identifying the assignor but not the assignee, not only "evidence[ ] and confirm[ ] the assignments that occurred by virtue of the securitization agreements," but "are effective assignments in their own right."  But in their reply briefs they conceded that the assignments in blank did not constitute a lawful assignment of the mortgages.  Their concession is appropriate.  We have long held that a conveyance of real property, such as a mortgage, that does not name the assignee conveys nothing and is void; we do not regard an assignment of land in blank as giving legal title in land to the bearer of the assignment.  See Flavin v. Morrissey, 327 Mass. 217, 219 (1951); Macurda v. Fuller, 225 Mass. 341, 344 (1916). See also G.L. c. 183, § 3.
U.S. Bank, N.A. v. Ibanez, 458 Mass. 637, 941 N.E.2d 40, 2011 Mass. LEXIS 5 (Mass. 2011).

New York

"If we take into consideration only what is written, the paper is wholly without meaning. A transfer to a person not named, or in any way described or designated, is, unconnected with anything else, a mere nullity." 24 N.Y. 330 at 332

"The paper called a mortgage was not, in fact, in any sense, a deed. It was entirely incomplete. Upon its face it was an imperfect instrument. No mortgagee or obligee was named in it, and no right to maintain an action thereon or to enforce the same, was given therein to the plaintiff or any other person. It was, per se, of no more legal force than a simple piece of blank paper."
24 N.Y. 330 at 335

Chauncey v. Arnold, 24 N.Y. 330 (N.Y. 1862).
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Mr. Roper,
Do you have any case law on this subject coming out of Texas courts?  I have looked, truly trying to do my own due diligence but I haven't found anything or if I did, I didn't recognize it.  I would appreciate your help so that I can forward this to my attorney.

Thanks so much for all your hard work!

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William A. Roper, Jr.
NotAProSe said:
Mr. Roper,
Do you have any case law on this subject coming out of Texas courts? I have looked, truly trying to do my own due diligence but I haven't found anything or if I did, I didn't recognize it. I would appreciate your help so that I can forward this to my attorney.

Thanks so much for all your hard work!

I have NOT made any thorough study of Texas law in this area.  Doing a very quick and cursory search using online readily available online law, I found several cases which give some insight into Texas jurisprudence in respect of incomplete instruments.  But it is essential to bear in mind that these cases should be viewed as an introduction to the vocabulary, cases and decisions, as well as a finding aid to other cases which might give a clearer and more authoritative picture.

First, here is a case that discusses alteration of instruments and mentions incomplete instruments in passing:
We first consider whether there was an alteration and if so, whether it was material.  A simple alteration is a change of a writing from one form to another in a manner that does not destroy its identity, nor affect the validity of the writing.  3 Tex.Jur.3d, Alteration of Instruments, sec. 2 (1980).  An alteration is material which changes the contract of any party, including the completion of an incomplete instrument otherwise than as authorized, or by changing the writing as signed, by adding to it or by removing any part of it.  Tex. Bus. & Com.Code Ann. sec. 3.407(a).  The test of materiality is one of law.  People's Finance Co. of Dallas v. Sabanovich, 26 S.W.2d 187, 189 (Tex.Comm'n App.1930).  A materially altered instrument is rendered void where the liability of the parties has been affected by the change, causing it to fail to reflect the true intention of the parties.  Bowser v. Cole, 74 Tex. 222, 11 S.W. 1131, 1133 (1889); Laughlin v. Stephenson, 525 S.W.2d 308 (Tex.Civ.App.— Houston [1st Dist.] 1975, no writ); Associated Sawmills, Inc. v. Peterson, 366 S.W.2d 844, 848 (Tex.Civ.App.—Dallas 1963, no writ); Lowe v. Henson, 190 S.W.2d 423 (Tex.Civ.App.—Amarillo 1945, no writ).
Caldwell Nat. Bank v. O'Neil, No. 08-88-00254-CV, 785 S.W.2d 840 (Tex. App. -- El Paso, 1990)
These other cases are more directly on point:

The contracts as prepared and signed, and containing no description of the land involved were not so wholly void that they were not thereafter operative and effective by the insertion, if authorized by the seller, of a correct description of the land intended to be sold.  Reserve Petroleum Co. v. Hodge, 147 Tex. 115, 213 S.W.2d 456, 7 A.L.R.2d 288; Glasscock v. Farmers Royalty Holding Co., 5 Cir., 152 F.2d 537.
Foster v. Lessing, No. 3818, 346 S.W.2d 939 (Tex. Civ. App. -- Waco, 1961)

No authority is cited holding such an instrument under such facts conveys any property. If it had contained an adequate description when signed and properly acknowledged, it would have conveyed the "tract above identified".  Houston Oil Company of Texas v. Moss, 155 Tex. 157, 284 S.W.2d 131 (1955). Since it described no land, it conveyed no land.  Since Richards was not authorized to insert the description he inserted after the Stetsons signed, there was no question of fact to submit to a jury.

In Reserve Petroleum Co. v. Hodge, 147 Tex. 115, 213 S.W.2d 456, 7 A.L.R.2d 288 (1948), it was necessary to get a jury finding that a deed on printed form, when executed, contained no description of the land before it could be held void.  As it is undisputed that there was no description of the land in the 1954 blank instrument, there is no question of fact to be determined by a jury.  Also, it is undisputed that Richards was not verbally authorized by the Stetsons thereafter to insert a description, if indeed he could have been validly authorized so to do. So, the holding in Reserve Petroleum Co. v. Hodge, supra, applicable here is: "Because they contained no description of the land the two mineral deeds when delivered, were inoperative, * * *."  There being no ratification of this 1954 blank instrument by the Stetsons, and the Stetsons not having abandoned their homestead, the other holdings in Reserve Petroleum Co. v. Hodge, supra, are not applicable.
Republic National Bank of Dallas v. Stetson, No. 6589, 382 S.W.2d 775, 781-2 (Tex. Civ. App. -- Beaumont, 1964)
NOTE:  See also the discussion therein of alteration of instrument from the ancient case Miller v. Alexander, 13 Tex. 497 (1855).

See also:
Glasscock v. Farmers Royalty Holding Co., No. 11300, 152 F.2d 537 (5th Cir., 1945)

But compare the discussion of Texas law in this recent U.S. District Court decision from Michigan:
LIVONIA PROP. HOLDINGS v. FARMINGTON RD. HOLDINGS, Civil No. 10-11589, 717 F.Supp.2d 724 (U.S. Dist. E.D. Mich. 2010)

I hope this helps!


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William A. Roper, Jr.

This text is from a decision of the Idaho Supreme Court in 1978, quoting from an earlier 1949 decision of the same court:
"The mere fact that the description inserted in a blank deed after delivery is the description of the property which the grantors had in mind at the time the deed was signed, is not sufficient to validate a deed in fact signed in blank.

"Where a deed contains a blank as to, or in, the description of the property, and such blank is not filled in before delivery, the deed is void." 26 C.J.S., Deeds, § 30, p. 222.

"A deed is inoperative to convey any property where it is delivered in blank as to the land intended to be conveyed and no authority is given to the grantee to fill in descriptive data.  Moreover, it has been said that such authority cannot be given by parole and that a deed with a description filled in in pursuance of oral authority is void by reason of the statute of frauds."  16 Am.Jur. 584-5.

In the case of Jones v. Coulter, 75 Cal. App. 540, 243 P. 487, the grantor signed two blank deeds and orally authorized the filling in of the name of the grantee and the descriptions of the properties. In holding such deeds void, 243 P. on page 490, the court said: "Though the decisions of other jurisdictions are not in entire harmony upon the question, it has been definitely decided in this state that under our statute of frauds the name of the grantor or grantee or a description of the property cannot be inserted by an agent for the grantor, in the absence of the latter, unless the agent's authority be in writing.  If the authority of the agent be not in writing, his insertion of the name of grantor or grantee or description of the property does not pass the title. Upton v. Archer, 41 Cal. 85, 10 Am.Rep. 266; Vaca Valley & C.R.R. v. Mansfield, supra (84 Cal. 560, 566, 24 P. 145, 147); Harris v. Barlow, 180 Cal. 142, 179 P. 682.  See, also Lund v. Thackery, 18 S.D. 113, 99 N.W. 856."

See also, Barth v. Barth, 19 Wash.2d 543, 143 P.2d 542; Utah State Building & Loan Ass'n v. Perkins, 53 Utah 474, 173 P. 950; Glasscock v. Farmers Royalty Holding Co., 5 Cir., 152 F.2d 537." 

[citing Dahlberg v. Johnson's Estate, 70 Idaho 51, 211 P.2d 764, 768 (1949)]
Argyle v. Slemaker, No. 12641, 99 Idaho 544, 585 P. 2d 954 (Id. 1978)

I would expressly call the attention of all to the mention of 26 C.J.S., Deeds, § 30.  This topic (and the adjacent sections) seems likely to show additional case authority in other states.

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William A. Roper, Jr.
The Corpus Juris Secundum citation shown above immediately leads us to another Texas case online at Google Scholar:
This description is insufficient to divest title out of J. C. Eiring.  "Where a deed contains a blank as to, or in, the description of the property, and such blank is not filled in before delivery, the deed is void."  26 Corpus Juris Secundum, Deeds, § 30j., page 222; Farmers Royalty Holding Co. v. Jeffus, Tex.Civ.App., 94 S.W.2d 255; Tarrant County v. McLemore, Tex.Sup., 8 S.W. 94; Reserve Petroleum Co. v. Hodge, 147 Tex. 115, 213 S.W.2d 456, 7 A.L.R.2d 288; Francis v. Thomas, 129 Tex. 579, 106 S.W.2d 257; Sullivan v. Fant, Tex.Civ.App., 160 S.W. 612, page 621; Blankenship v. Mott, Tex.Civ.App., 104 S.W.2d 607.
Republic Nat. Bank of Dallas v. Eiring, No. 6156, 240 S.W.2d 414 (Tex. Civ. App. -- Amarillo, 1951)

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William A. Roper, Jr.

One of the cases cited within the Ibanez case in Massachusetts, which shows the invalidity of incomplete instruments, is the case Macurda v. Fuller, 225 Mass. 341, 114 N.E. 366 (Mass. 1916).  That volume of the Northeastern Reporter is available in Google Books at:

The Macurda case is very concise and is a nice little read.  It also cites some earlier Massachusetts cases which are also conclusive as to the law in that state as to incomplete deeds.
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I hope this helps!

Yes!!  Thanks again!!
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