so far, the banks have been exceedingly successful, causing the foreclosure of millions of homes by people who don’t own and never wanted to own the obligation. The out-of-pocket expense of paying the homeowner to execute documents was long ago reimbursed in full by the sale of securities as the other leg of the single transaction doctrine.
There is no loss. Yet there is foreclosure.
The assignment of a mortgage MUST be accompanied by the transfer of ownership of the underlying obligation —- or else it is a legal nullity. This is true in all U.S. jurisdictions.
Some jurisdictions try to work around this requirement by presuming the transfer occurred because they treat the promissory note as a title document for the underlying obligation and the endorsement of the note as a transfer of title to the underlying debt. This is a legal error.
The endorsement of a note is not a legal nullity even though the obligation was neither purchased nor sold at the time of endorsement.
But the endorsement of the note carries the presumption, not a conclusive finding, that the authority to enforce it was intended. But the intention is not the same as an event in the real world. Either it happened or it didn’t. So the banks try to narrow the focus on the transfer of the note.
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If they were to focus on the transfer of the mortgage, it would easier to attack since there was no purchase and sale of the underlying obligation.
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This is why we have seen so many cases back in the early foreclosure crisis we had multiple fabricated forged assignments of mortgage that were abandoned at trial by the foreclosure mill.
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But by keeping the focus on the note, where the transfer does not require a transfer of the obligation, they escape the easy attack.
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By claiming a presumption that the transfer of the underlying obligation has been purchased and sold for value, they appear to at least initially escape the requirements of Article 9 §203 of the Uniform Commerical Code and judicial doctrine that declares a transfer of a mortgage without the underlying obligation is a legal nullity.
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The code and doctrine emanating from the same principle: nobody wants a foreclosure to occur that might result in the claimant receiving a windfall instead of restitution for an unpaid debt.
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And so far, that strategy has been exceedingly successful, causing the foreclosure of millions of homes by people who don’t own and never wanted to own the obligation. The out-of-pocket expense of paying the homeowner to execute documents was long ago reimbursed in full by the sale of securities as the other leg of the single transaction doctrine.
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There is no loss to be claimed because there is no account to be claimed — except for the fabricated payment history that is falsely presented as the business record of a company claiming to be a servicer, but who performs no servicing functions.
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.
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