What to Do When the "Original" Note is Proferred

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There are two issues when the other side presents original documents. First is that they say these are originals and they do not accompany it with an affidavit from someone with actual personal knowledge of the transactions or the high bar for business records exceptions to hearsay. My experience is that 50-50, the documents are original or fabricated by use of Photoshop and a laser printer or dot matrix printer. So what you need to do is to go down to the clerk’s office and see what they filed. It would not be unusual for them to file a copy saying it was the original. Second, on that same point, the original can be examined. When the signatures are heavy there should be indentations on the back. Also a notary stamp tends to bleed through the paper to the back.

The second major point is the issue of holder v owner. The owner of the debt is entitled to the ultimate relief, not the note-holder unless the other side fails to object. So along with the proffering of the “originals” they must tell the story, using competent foundation testimony, how they came into possession of the note. In discovery this is done by asking to see proof of payment and proof of loss. Which is to say that you want to see the canceled check or wire transfer receipt that paid for the “transaction” in which the possessor of the note became a holder under UCC and is entitled to a rebuttable presumption that they are the owner. If there is no transaction for value, then the note was not negotiated under the terms of the UCC.

Since they possess the note there is a hairline allowance that they may sue for the collection on a note in which they have no financial sake but there is no ability to win if the borrower denies they received the money or that the possessor of the note obtained the note for purposes of litigation and is not the creditor — i.e., the party who could properly submit a credit bid at auction by a creditor as defined by Florida statutes, nor are they able to execute a satisfaction of mortgage because even upon the receipt of the money they have no loss, and under the terms of the note itself the overpayment is due back to the borrower.

And just as importantly, they cannot modify the mortgage so any submission to them for modification is futile without them showing proof of payment, proof of loss and/or authority to speak for and represent the interests of an identified creditor.

An identified creditor is not merely a name but is a report of the name of the owner of the debt, the contact person and their contact information. Then you can contact the owner and ask for the balance and how it was computed. So the failure to identify the actual owner is interference with the borrower’s right to seek HAMP or HARP modifications — potentially a cause of action for intentional interference in the contractual relations of another (asserting that the note and mortgage incorporated existing law) or violation of statutory duties since the Dodd-Frank act includes all participants in the securitization scheme as servicers.The key is the money trail because that is the actual transaction where money exchanged hands and it must be shown that the money trail leads from A to B to C etc. The documents would then be examined to see if they are in fact relating to the transaction or a particular leg of the chain.

If the documents don’t conform to the actual monetary transaction, then the documents are refuted as evidence of the debt or any right to enforce the debt. What we know is that in nearly all cases the documents at origination do NOT reflect the actual monetary transaction which means they (a) do not show the actual owner of the debt but rather a straw-man nominee for an undisclosed lender contrary to several provisions of the Truth in Lending Act. The same holds true for the false securitization” chain in which documents are fabricated to refer to transactions that never occurred — where there was a transfer of the debt on paper that was worthless because no transaction took place.One last thing on this is the issue of blank endorsements. There is widespread confusion between the requirements of the UCC and the requirements of the Pooling and Servicing Agreement. It is absolutely true that a blank endorsement on a negotiable instrument is valid and that the holder possesses all rights of a holder including the presumption (rebuttable) of ownership.

But hundreds of Judges have erred in stopping their inquiry there. Because the UCC says that the agreement of the parties is paramount to any provision of the act. So if the PSA says the endorsement and assignment must be in a particular form (recordable) made out to the trust and that no blank endorsements will be accepted, then the indorsement is an offer which cannot be accepted by the asset pool or the trustee for the asset pool because it would violate an express prohibition in the PSA.And that leads to the last point which is that a document calling itself an assignment is not irrefutable evidence of an actual transfer of the loan. If the assignee does not agree to take it, then the transaction is void.  None of the assignments I have seen have any joinder and acceptance by the trustee or anyone on behalf of the pool because nobody on the trustee level is willing to risk jail, even though Eric Holder now says he won’t prosecute those crimes. If you take the deposition of the trustee and ask for information concerning the trust account, they will get all squirrelly because there is no trust account on which the trustee is a signatory.

If you ask them whether they accepted the assignment of a defaulted loan and if so, what was the basis for them doing so they will get even more nervous. And if you ask them specifically if they accepted the assignment which you attach to the interrogatory or which you show them at deposition, they will have to say that they did not execute any document accepting that assignment, and then they will be required to agree, when you point out the PSA provisions that no such assignment or endorsement would be valid.

Tags: assignment, bankruptcy, endorsement, evidence, holder owner, indorsement, mortgage litigation, original note, presumptions, transfer of debt, trustee
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