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.
Within the message thread "Remedies for a Wrongful Foreclosure", Bob G. called to our attention the necessity of the actual surrender of the alleged promissory note for cancellation by the court as a pre-requisite for judgment:


In particular, Bob G. called our attention to the Florida case:
Johnston v. Hudlett, No. 4D08-4636, COURT OF APPEAL OF FLORIDA, FOURTH DISTRICT, 32 So. 3d 700; 2010 Fla. App. LEXIS 4211; 35 Fla. L. Weekly D 752, March 31, 2010, Decided.
http://www.4dca.org/opinions/Mar%202010/03-31-10/4D08-4636.op.pdf
http://scholar.google.com/scholar_case?case=16286314085740795504
It seems to me that this topic merits its own discussion thread.

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I recently created another thread to discuss alteration of instruments.  See "Alteration of Instruments":


One of the cases mentioned therein was an ancient case of the New Hampshire Supreme Court, Smith v. Mace, 44 N.H. 553 (NH 1863).  That case includes this little tidbit:
"To entitle the vendor, then, to maintain a suit on the original promise, of for money had and received, the note must be produced and cancelled at the trial, or otherwise accounted for . . . "
Those who come across other cases which expressly show authority within various jurisdictions for the proposition that a note must be surrendered at trial for cancellation are encouraged to add to this thread and share the insight given in such decisions!
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William A. Roper, Jr.
The KEY language from the Florida decisions brought to our attention by Bob G. included:

"Because it is negotiable, the promissory note must be surrendered in a foreclosure proceeding so that it does not remain in the stream of commerce. Indeed, if the foreclosing party alleges that the note is lost, destroyed or stolen, the trial court is authorized by statute to take the necessary actions to protect the party required to pay the note against loss that might occur by reason of a claim by another party to enforce the instrument. See section 673.3091(2), Fla. Stat. (2002)."
Perry v. Fairbanks Capital Corp., 888 So. 2d 725 - Fla: Dist. Court of Appeals, 5th Dist. 2004
http://scholar.google.com/scholar_case?case=15769850298440658633&hl=en&as_sdt=2,21

"Moreover, in the case of original mortgages and promissory notes, they are not merely exhibits but instruments which must be surrendered prior to the issuance of a judgment.  The judgment takes the place of the promissory note. Surrendering the note is essential so that it cannot thereafter be negotiated.  See Perry v. Fairbanks Capital Corp., 888 So.2d 725, 726 (Fla. 5th DCA 2004).  The judgment cancels the note.  The clerk cannot return these instruments to the parties."
Johnston v. HUDLETT, 32 So. 3d 700 - Fla: Dist. Court of Appeals, 4th Dist. 2010
http://scholar.google.com/scholar_case?case=16286314085740795504

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Bob G
Can't find anything outside Florida.  Perhaps a search for "the judgment stands for the obligation" might produce something useful?
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William A. Roper, Jr.
Bob G.:

I haven't really begun any sort of concerted search yet.  I will probably initiate a more concerted search sometime when I am at the library with full access to the academic version of Lexis.

But when I went looking for your prior post, it took me a few minutes to find it and I thought the topic worthy of a little more prominence and its own thread.

If others take a singular interest in the law in this area in other jurisdictions, I will probably look a little closer.

I do NOT think that this holding is likely to be unique to Florida.  To the contrary, it would seem to me to be a rather reasonable commercial and judicial practice to assure that notes do NOT remain outstanding after a judgment has been granted as reflected in Smith v. Mace, 44 N.H. 553.  I think that this practice has probably been mostly FORGOTTEN and no one has been enforcing it! 

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William A. Roper, Jr.
Although I have NOT read the full text of the ancient cases shown below, secondary sources seem to indicate that they may include holdings consistent with those enunciated within Smith v. Mace, 44 N.H. 553 (NH 1863):
White v. Hass, [NO NUMBER IN ORIGINAL], SUPREME COURT OF ALABAMA, 32 Ala. 430; 1858 Ala. LEXIS 111, January, 1858, Decided.

Meyer v. Huneke, [NO NUMBER IN ORIGINAL], COURT OF APPEALS OF NEW YORK, 55 N.Y. 412; 1874 N.Y. LEXIS 26, December 9, 1873, Argued , January 20, 1874, Decided.

Booth v. Powers, [NO NUMBER IN ORIGINAL], COURT OF APPEALS OF NEW YORK, 56 N.Y. 22; 1874 N.Y. LEXIS 75, January 29, 1874, Argued , February 10, 1874, Decided.
If another MS Fraud Forum participant with an interest in this topic and the laws of these jurisdictions gets to a law library before I do, he or she might want to check to see if these cases do in fact enunciate a rule that surrender of the note to the court is required.  Admittedly, even if these cases do stand as authority for such a principle, it would be necessary to bring the research forward to the present to verify that such is still the rule.
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Bob G
The NY cases hold that a material or fraudulent alteration of the note or contract by a party thereto, voids the note or contract.

I can't even find the NH or Alabama cases.
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William A. Roper, Jr.
Bob G.:

Have you actually read the NY cases or just abstracts of these decisions?  I KNOW that the more conspicuous of the citations of these cases relate to alteration of instruments.  (Note that I resurrected this topic and created a new thread when I stumbled across mention of the surrender issue while studying alteration cases after you initial introduction of the topic!)

Take a look at these ancient secondary sources:


I think that we are going to have to either go to the printed volumes OR use LEXIS to pull up the full text.

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I thought that the language of these ancient cases might afford us some useful vocabulary to use in other searches and/or some citations to Shepherdize and bring forward.

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William A. Roper, Jr.
Bob G.:

In my original reading of the Lancaster Law Review citation show above, I failed to appreciate that the references were by a party to the suit in the Pennyslvania Superior Court case of Winters v. Mowrer:
Winters v. Mowrer, No. 23, Nov. T., 1895, SUPERIOR COURT OF PENNSYLVANIA, 1 Pa. Super. 47; 1895 Pa. Super. LEXIS 11, November 18, 1895, Argued , December 20, 1895, Decided.

Take a close look at the cases discussed within the decision at page 61 of the Law Review discussion of the case, particularly the discussion of the holding in Brown v. Scott:
In Brown vs. Scott, 51 Pa., 357, Strong, J., says, on page 364: "Undoubtedly there is a large class of cases in which it has been asserted that when a negotiable note has been given for an antecedent debt, though it may not have extinguished that debt, courts will not suffer the creditor to sue and recover on the original contract unless the note has been lost or destroyed, or is produced and cancelled at the trial.  And some of the cases go to the extent that the rigth to sue for original consideration is suspended while the note is outstanding in the hands of an assignee or endorsee for value.  Such is the principle of Small vs. Jones, 8 Watts, 265.  To determine rightly how far the principle is applicable we must regard the reason upon which it is founded.  That reason is that if the creditor might sue on the original cause of action the debtor would be exposed to two suits, one brought by the creditor and one by the holder of the note, which would be a hardship."

The Winters case is more fully cited by Lexis as:
Winters v. Mowrer, No. 23, Nov. T., 1895, SUPERIOR COURT OF PENNSYLVANIA, 1 Pa. Super. 47; 1895 Pa. Super. LEXIS 11, November 18, 1895, Argued , December 20, 1895, Decided.

This is distinguishable from a prior appearance of a related case before the Pennsylvania Supreme Court the prior year:
Winters v. Mowrer, No. 165, Supreme Court of Pennsylvania, 163 Pa. 239; 29 A. 916; 1894 Pa. LEXIS 1172, May 14, 1894, Argued , July 12, 1894.
The full correct LEXIS citation for Brown v. Scott would seem to be:
Brown v. Scott, [NO NUMBER IN ORIGINAL], SUPREME COURT OF PENNSYLVANIA, 51 Pa. 357; 1865 Pa. LEXIS 217, 1865, Decided.

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I think that we are creeping up on some useful case law in this area, but there is clearly much research yet to be done.  Even if these cases are not authoritative, I have sound it sometimes useful to borrow language from such decisions when it persuasively and economically makes the point!

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William A. Roper, Jr.
The full text of the Pennsylvania decision in Brown v. Scott, may be found online at Google Books:
Brown v. Scott, 51 Pa. 357; 1865 Pa. LEXIS 217 (Pa. 1865).
http://books.google.com/books?id=C7UaAAAAYAAJ&dq=%22produced%20and%20cancelled%20at%20the%20trial%22&pg=PA357#v=onepage&q=357&f=false



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Bob G
WAR

I did read the full cases, and cases that cited to them.

I will take a look at the other stuff and report back.
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William A. Roper, Jr.
Bob G.: 

To clarify, I have ONLY read the full cases where a link to the full case is actually SHOWN above.  In other instances, I had identified these cases in respect of a secondary mention, such as that shown within the Lancaster Law Review.  But even there, upon review, the citations purportedly in support of a proposition are those of the attorney for one of the parties rather than by the court.

I will read the full cases at the earliest opportunity, though the urgency is much diminished to the extent that you you have ascertained that several of these cases seem NOT to support the proposition that we are seeking to advance.

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Bob G
WAR

Here's the deal. We have UCC 3-603, collateral source of pmt.  We also have UCC 3-804 (I think), re lost note affidavits. In NY, they have to be accompanied by a bond = to twice the amount of the note. In other jurisdictions, adequate security. If I were not in NY, I would still be pleading the NY requirement, tying it to NY law governing all these securitized deals.

I have two BA cases, where they sold the note to FNMA. But they still claimed they owned the Note and mortgage...until recently, where they admitted that FNMA was "the investor" a term not defined in the UCC.

In a letter to the court, I said that a lost note aff would have to be double bonded or, if the purported original were produced, then it would have to be subjected to forensic analysis.

Guess what? No original, and no lost note aff.  Given what the insurers now know, and given that a good number of them are into receivership as a result of this fraud, there is no way they are going to double bond the note.
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