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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I need help in understanding what has occurred in my foreclosure.  I have been reading on this site and other ones but I still do not understand.

Here's my situation.  We refinanced our home in 2006 through a mortgage broker.  I felt very uneasy with the process and to this day that feeling remains.  We made 2 or 3 payments to Ohio Savings Bank and got notice that Wells Fargo was our servicer.  (Ohio Savings Bank was purchased in 2007 and the name changed to AmTrust.  In Dec 2009 Amtrust was closed by the FDIC and assets were transferred to NYCB.  NYCB on 4-8-10 changed the name Amtrust back to Ohio Savings Bank.)  MERS is listed as the beneficiary on the Deed of Trust.

Because our construction company went under in 2008 we could no longer make our payments.  We tried loan modification.  Live in WA state which in non-judicial. Our NOD from NW Trustee Srvc, was dated 12-3-08; however, when I checked with the recorders office the assignments were not recorded until 12-29-08.  I was told by someone that they had no legal standing to foreclose because they were not on an assignment nor were they recorded with registers office when they started the foreclosure process.  The assignment of DOT is dated 12-19-08.  Is what this person told me correct?  

The assignments are as follows:  DOT on 3-28-06  GRANTOR:  XXX and GRANTEE:  Pacific NW Title, Arbor MTG Corp;   Assign of DOT on 12-29-08  GRANTOR:  MERS and GRANTEE:  Wells Fargo Bank.  (I was told there is a problem here because MERS cannot be a grantor.  Is this correct?);  Appt of Trustee on 12-29-08  GRANTOR:  WFB and GRANTEE:  NW Trustee Srvc.; Notice of Trustee Sale of 2-19-09 GRANTOR:  NW Trustee and GRANTEE:  MERS and XXX; Amended Notice of Sale on 10-28-09 GRANTOR: NW Trustee and GRANTEE:  XXX; Deed dated 1-19-10 GRANTOR:  XXX and NW Trustee Srvc and GRANTEE:  Fed Ntl Mtg Assoc.

We filed BK on 3-30-09 canceling the first auction date of 5-22-09.  On 6-2-09 WFB filed a Motion For Relief From Stay.  Our BK attorney was a not very helpful to us.  We did not fight anything because he said that we could not afford the home because we were unemployed so what would be the point.  Also my husband had serious health issues and almost died in April 09.  I was an emotional wreck and my blood pressure went up to dangerous levels.  So we had to choose life or death.  The Motion stated that WF was the holder of note endorsed in blank and is entitled to enforce the Note and foreclose on the DOT.  I asked our BK attorney if this meant they had the original note.  He said that WF is an upstanding bank and if they say they have the note they do.

Attached to the Motion was a copy of the DOT, Note, Endorsement Allonge to Note and Allonge to Note.  Here I was told there is a problem.  You can tell that the Note and the Endorsement were probably attached because on the top of the pages are black marks which looks like they were clasped together.  The Allonge to Note does not have the top marks.  It reads as follows:  Loan No. XXXX,   Allonge to Noted dated:  March 22, 2006,   In Favor of: Arbor MTG Corp,   And Executed by:  left blank,    Pay to the order of, without recourse:  left blank,   Dated: 5-15-2009  Ohio Savings Bank and signed by Herman John Kennerty, VP of Loan Documentation.  This same person who is not an attorney told me that the note and deed is split therefore the note is unsecured therefore WF cannot foreclose.  Also the Allonge to Note was fraudulently endorsed to give the appearance of standing.  Notice that the Allonge to Note was dated a few days before the first auction date.  Can anyone tell me if this is legal?  Isn't the Allong to Note suppost to be attached to the Note?

I know that people on this site cannot give legal advice but can someone who has some knowledge on foreclosures please tell me if they feel there is a problem here.  Just found this and other sites and most of the info is way over my head.  Can some please help answer my questions?  Sorry for the long post.  Thanks to all in advance.          

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You refused to accept email.

We tried.

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Texas, not sure what you mean.  I have gotten some emails.

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Herman John Kennerty is a notorious robo signer.  Its too bad you can't sue your attorney for malpractice - "WFB is a fine upstanding bank and if they say they own it, they do..."  Left blank, without recourse, backdated assignments...sounds like fraud at its finest and your idiot attorney didn't even question it.

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William A. Roper, Jr.


Whether a particular mortgage investor is a holder is a matter of commerical law controlled by the Uniform Commercial Code (UCC).  The UCC, almost everywhere, requires indorsement and delivery of the note in order for a valid negotiation to take place.

An allonge is one means of affixing an indorsement to a negotiable instrument.

The law as to when an allonge can be used actually VARIES quite a bit from state to state.

Most people, including most attorneys (who haven't bothered to look up the law in this regard) erroneously ASSUME that the controlling law is the law of the jurisdiction where the property is located.  This is usually INCORRECT.

If one consults the older cases for most jurisdictions, the CORRECT answer seems to be that since a negotiation is completed by the delivery of the instrument the law of the PLACE OF DELIVERY controls matters respecting the negotiation!

However, note that most indorsements are UNDATED and the PLACE OF DELIVERY is not noted anywhere on the instrument.  To determine the PLACE OF DELIVERY, you are going to need to get a look at the delivery receipts or custodial receipts.

The servicer almost never actually HAS these documents.  These documents would be in the custody of the trustee for the mortgage investor and various other intermediate purchasers and holders of the negotiable instrument.

You can also probably infer the place of delivery from the location of the institutional trustee or the institutional custodian.  Very often this is NEW YORK, which has particularly strict law relating to allonges.

The fact that the servicer lacks the delivery receipt is one of the reasons that the servicers ROUTINELY FABRICATE EVIDENCE.  They do not actually POSSESS the evidence that is REQUIRED to prove their case.  And they are too arrogant and too LAZY to get the evidence from the mortgage investor.  Instead, they simply fabricate (forge) an assignment together with a PERJURED affidavit.  These are then presented to the court as "proof".

Similarly, the foreclosure mill attorneys work from a COPY of the note found within the servicer's loan file.  It is often an UNINDORSED COPY.  The REAL promissory note may actually contain a valid indorsement.  Once the foreclosure mill has pled in the unindorsed copy, it is problematic to substitute the indorsed original.  So, consistent with their patterns of criminal fraud and evidence fabrication, they simply fabricate an allonge which purports to be the missing indorsement for the unindorsed COPY of the note. 

Since the corrupt servicers can RELY UPON ignorant attorneys, such as the one you employed, to BELIEVE that large financial institutions are trustworthy, this almost always works UNLESS and UNTIL you get a really sharp attorney who KNOWS THE INDUSTRY and who gets an oral deposition of the plaintiff's witnesses.  When these witnesses are deposed, particularly after effective written discovery, the plaintiff's case totally crumbles.

The simple fact of the matter is that the assignment is forged, the allonge is often a forgery, the affidavit of merit is perjured.  EVERYTHING SUBMITTED TO THE COURT IS POISONED BY THIS FRAUD!


Regretably, there are usually court imposed limits to reopening judgments.  Once the time limit has passed, getting even an erroneous order granted based upon false evidence set aside can be challenging.

It is my impression from your post that the Bankruptcy Court disposed of the motion for relief of stay some time ago.  Is this correct?

Generally, I would encourage you to consult another competent attorney.  However, one consequence of the whole GMAC meltdown is that the best and the brightess of the foreclosure defense bar are now seeing a new crush of business from defendants who are encouraged and emboldened by what is now appearing in the news.

The better attorneys are not going to be able to help EVERYONE who has been victimized.  They are going to have to pick their cases.  Trying to reopen a matter after a final Bankruptcy Court judgment in a non-judicial foreclosure state is a pretty chancy undertaking.

Best of luck to you!

NOTE:  Please understand that I am NOT AN ATTORNEY and THIS IS NOT LEGAL ADVICE!

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UCC Article 3 or the states equivalence governs negotiation of the note.
UCC Article 9 which governs perfection defers to laws of local jurisdiction when real property is involved.

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William A. Roper, Jr.

While it is unquestionably true that the law pertaining to the security for the negotiable instrument is controlled by the place where the real estate is situated, I believe that you will find that the commercial law cases show that as to the law controlling negotiation that it is the place of delivery that matters. 

There IS a distinction.  I am NOT at all suggesting that the place of delivery would control ANY ASPECT of the security instrument, ONLY the law pertaining to the negotiation of the instrument itself.

Bear in mind that most negotiable instruments subject to the terms of Article 3 are NOT promissory notes, but rather they are negotiable checks.  Checks are also indorsed and delivered and there are far more of these clearing the banking system each week than the number of mortgage notes being negotiated (in fact for every mortgage their is typically at least one check tendered in payment every month).

The question as to when a negotiation is completed and the law which applies is really pretty well settled.  I would encourage you to recheck your textbooks!
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If the paper tangible note that the homeowner signed is to to be sold to a subsequent purchaser it must meet the definition of a negotiable "instrument" as defined in Article 3 of the UCC or the states equivalence.

Revised UCC Article 9 allows for negotiation of a tangible promissory note.

A promissory note can be either negotiable or non-negotiable.

Also, an electronic promissory note should be treated as a "Rabid Cow".
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William A. Roper, Jr.


I think that you are muddling several choice of law concepts.

Historically, the place a contract was made controlled the law by which a contract would be interpretted, though this could be displaced by the agreement of the parties to another jurisdiction with an actual interest in the instrument.

So, for example, a promissory note executed in Texas would usually, by default, be interpretted under Texas law, absent some other contrary provisions within the instrument itself.

The mortgage, deed of trust or other mortgage security instrument is another separate instrument which is executed usually concurrently to and in the same place as the promissory note.  But the mortgage, deed of trust or other mortgage security instrument is distinguished in that it usually secures a piece of real property which has a location fixed in a particular jurisdiction.

Now the jurisdiction with law controlling the interpretation of the promissory note might or might not be the same as the jurisdiction giving the law to be used in interpretation of the mortgage, deed of trust or other mortgage security instrument.

Most standard FNMA/FHLMC mortgages, deeds of trust or other mortgage security instruments will include some language to the effect "Governing Law ...  This security instrument shall be governed by federal law and the law of the jurisdiction where the Property is located."  By contrast, most standard FNMA/FHLMC promissory notes LACK a similar choice of law provision.  (Take out your instruments and READ THEM.  I think you will find this to be the case!)

Imagine a scenario where a mortgage loan securing a property located in Texarkana, Texas, was actually closed at a title company with offices situated on the other side of State Line Boulevard in Texarkana, Arkansas.  Under such circumstances, the promissory note might be controlled by Arkansas law (the place of execution), while the deed of trust would be controlled by Texas law (due to the express provision in the instrument).

Even so, this usually hardly matters, as the Uniform Commerical Code IS sufficiently uniform nationally as to both its provisions and the cases interpretting those provisions that no one would tend to raise the issue and, if raised, it would usually NOT alter the outcome of a decision.

What you seem to be missing here is that simply because the law to be used to interpret the promissory note and/or the law to be used to interpret and enforce the mortgage, deed of trust or other mortgage secrity instrument is FIXED at closing, this is NOT the case when an owner of the promissory note negotiates the promissory note to another entity.

The negotiation of the note is a separate commerical transaction.  True, the law of negotiation is also controlled by the UCC.  But since negotition requires both indorsement and delivery, for well over a century courts almost everywhere recognize that it is the delivery of the instrument which completes the negotiation and thus completes the transaction.

For this reason, courts have held that the law of the place of delivery controls the interpretation of the negotiation itself.

This does not alter the fact that the terms of the instrument will ontinue to be controlled by the law of the place made.

This is a good common sense result.  If the instrument is sold to an entity in California and delivered there, then California law determines that transaction.  When subsequently sold to a Minnesota investor, then Minnesota law would control.  Why would Texas law determine the negotiation of an instrument by a California entity to a Minnesota entity?

Although this is how the law is conceived and applied, as a practical matter, almost all large institutional investors use institutional custodians situated in New York State as a repository for the instruments.  So even as a financial institution in California sells the instrument to a Minnesota institution, what really happens is the note is delivered from the New York vault of one institutional custodian to another across the street or even a different subvault of the very same bank! 

Now this anomaly as to choice of law as to the negotiation turns out to be VERY IMPORTANT, because the various states have VERY DIFFERENT RULES relating to the use of allonges!
In New York, an allonge cannot be used unless the space on the instrument itself is already used up and there is no room for an additional indorsement thereon, which is almost NEVER the case with mortgage promissory notes!

The provisions of UCC 9 you cite, while interesting, turn out to be almost totally irrelevant and will not get the mortgage investor or servicer past the simple fact that the place of delivery is going to control the negotiation.  The specification in the security instrument will usually control the interpretation of the security instrument and the place of making will usually control the promissory note itself.

Interestingly, another provision of the UCC which is often cited by mortgage investors to slip out from under the negotiation requirements -- provisions pertaining to the rights of a transferee -- do not help the mortgage plaintiff either.  If the plaintiff is relying upon its role as transferee, it becomes the transferee upon delivery.  Whoops!  New York law would usually apply to this, as well.

I would add that this section of the UCC has been misunderstood and misused by the mortgage industry and was misapplied by the Florida courts in the Taylor case.  Unfortunately, the appellant in Taylor never made the argument that it was New York law that should control the indorsement and delivery.  Oh, well!

Please bear in mind that I am NOT an attorney and this is NOT LEGAL ADVICE!

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Please bear in mind that I am NOT an attorney and this is NOT LEGAL ADVICE!

But I try to talk like an attorney on steroids who was vaccinated with a phonograph needle at a very early age. I don't move around much, so I talk/type a lot, alienating most of the human population unfortunate enough to get exposed to me.

I know everything, YOU know nothing. You will NEVER win an argument with me. I dare you to try.

I am WAR aka "Not an attorney". I know a lot, I just cannot share it without sounding pompous and overbearing. That's OK. You must all fall to your knees and worship my superiority. I am WAR and I intend to take over this forum and drive all but the most masochistic readers and posters away.

In return for your unconditional worship I will someday reveal the secrets of the universe and of life itself. Or I may just bore you to death for my own pleasure.

I am WAR.....Master of my own little universe. But still not a lawyer.
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It is a reality of commerce that virtually all paper documents related to a note and mortgage are converted to electronic files almost immediately after the loan is closed. Individual loans, as electronic data, are compiled into portfolios which are transferred to the secondary market, frequently as mortgage-backed securities. The records of ownership and payment are maintained by a servicing agent in an electronic database.

The reason "many firms file lost note counts as a standard alternative pleading in the complaint" is because the physical document was deliberately eliminated to avoid confusion immediately upon its conversion to an electronic file.

CASE NO.: 09-1460

The paper note was never negotiated....
The perfection of lien rights was never transferred.

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William A. Roper, Jr.
Texas said:
It is a reality of commerce that virtually all paper documents related to a note and mortgage are converted to electronic files almost immediately after the loan is closed. Individual loans, as electronic data, are compiled into portfolios which are transferred to the secondary market, frequently as mortgage-backed securities. The records of ownership and payment are maintained by a servicing agent in an electronic database.

I am well aware that the Florida Bankers Association made this assertion in its presentation to the Florida Supreme Court.  I believe that this averment is UNTRUE.
I would recommend to you the thousands of SEC registration statements and pooling and sales agreements which state otherwise.
But more importantly, if the original instruments were actually destoyed, WHAT IS IT THAT YOU THINK THE INSTITUTIONAL CUSTODIAN IS BEING PAID TO DO??
I believe that it probably IS TRUE that the mortgage originators and mortgage servicers routinely scan ALL of the other loan documents to electroinc form and then destroy the originals.  This would usually include a COPY of the promissory note and a COPY of the mortgage.  The original instruments are delivered to the institutional custodian precisely as described in the pooling and servicing agreements, trust indentures and registration statements.
Which is more credible, upwards of ten thousand documents filed with the Securities and Exchange Commission ALL of which describe what happened to the promissory notes and mortgages, the FNMA Sellers and Serviers Manual, the FHLMC Sellers and Servicers Manual, or this one FALSE STATEMENT to the Court by the Florida Bankers Association?

One thing that almost certainly IS true is that the servicer NEVER has the promissory note EXCEPT when it has been retrieved from the vaults for the purposes of foreclosure (EXCEPT in those instances where the servicer was the originator, but then it gave up custody usually within three to five days of the closing).
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Would admission of one of the Fed Banks help, or would you like more? Only a fool would operate on a single source of verification.
Nobody said what is stated in a PSA is followed.
Your question should be: "Who is the custodian of the authoritative copy?"

Suggest you obtain the new, 21st Century, eMortgage Guides published by FNMA and FHLMC, Fannie Mae /Freddie Mac, those manuals state a difference to what you claim.

We no longer live in a paper world.

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Roper, if you still don't believe.

Congressman Alan Grayson

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kayko, any update?

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