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.
In a previous discussion thread, Mike H. called our attention to an argument presented in an ongoing Florida case alleging that the promissory note in that suit wasn't actually a negotiable instrument under the UCC after all.  This is such an interesting topic, that I believe that it deserves its own thread.

Mike's original post can be found within my thread "Alteration of Instruments":

This subject has again arisen within the thread "Who can sign an indorsement?":


The central question is whether unique provisions of a particular promissory note might actually preclude the note from qualifying as a negotiable instrument under UCC §3-104:

Generally, a negotiable instrument is an unconditional promise or order to pay.  Regular bank checks drawn on checking accounts fall under this section of the UCC.

Suppose that I write a check but I ADD A CONDITION, "Subject To the Payee personally appearing at the Maker's Birthday Party and signing 'Happy Birthday'".  Further suppose that I make the check out to Willie Nelson.

While the check might still be an enforceable promise, it seems no longer to be an unconditional promise to pay.  IF Willie appears at my Birthday Party and sings 'Happy Birthday', he has satisfied the condition.  IF Willie simply indorses and deposits the check over to Litton Loan, as payment for his monthly mortgage, Litton ought not to expect payment of the check and its clearance through the banking system EVEN if it sends Marti NOREIGA to sing at my Birthday Party instead of Willie appearing.

There is kind of a common sense aspect to this.  Introduction of conditions takes the  instrument out of the universe of notes which might be readily transferred without respect to the performance of the conditions!

Similarly, a check made out for an unceratin amount is also NOT a negotiable instrument.  For example, IF instead of putting in a specific amount, I put in "amount to be determined by number of hours worked laying bricks times $15 per hour".  The amount cannot be determined with reference only to the instrument.  It isn't for a fixed amount of money.  It might be a contract, but it is probably not a negotiable instrument.

The general idea of negotiable instruments is that these are intended to be rather lean and to NOT impose various conditions on payments and that the amount is to be fixed.

So the idea is to ascertain which features of the promissory note might violate this definition.

I have not researched cases in other jurisdictions.  But for some borrowers, particularly in Florida where there is a little case law, this might be another layer of defense! 
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