Illinois App. Ct.: Assignment Document Without Assignment of the Debt Conveys Nothing

So here, in black and white, is yet another appellate decision  confirming what I have said for 12 years: The assignment of the mortgage is merely the delivery of a piece of paper. It conveys nothing in terms of an interest in the real property or the right to foreclose the mortgage. BUT if the assignment of the document is accompanied by a sale or assignment of the allegedly underlying debt, then the assignment can be used as evidence of an encumbrance and the contractual right to seek foreclosure.

Just as a promissory note can be used as EVIDENCE of a debt and is not the debt, so too is the mortgage EVIDENCE of an encumbrance and the right to foreclose. Confusion on this issue has led to millions of defective foreclosures.

“ ‘[a]n assignment of the mortgage without an assignment of the debt creates no right in the assignee.’ ” Bristol v. Wells Fargo Bank, National Ass’n, 137 So. 3d 1130, 1133 (Fla. Dist. Ct. App. 2014) (quoting Vance v. Fields, 172 So. 2d 613, 614 (Fla. Dist. Ct. App. 1965); see also Elvin v. Wuchetich, 326 Ill. 285, 288-89 (1927) (assignment of mortgage on truck without transferring note transferred no interest in truck authorizing replevin).

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THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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see Illinois Case Debt MUst Also be Assigned

This is why lawyers are necessary. Beneath each “self-evident” fact there are multiple layers of decisions that attempt to get it just right. Ignorance of those layers leads either to loss in court or a judge issuing an erroneous ruling.

In first year law school the contracts professor pounds into the heads of the students a simple phrase: “The note is not the debt. It is evidence of the debt.” That seemingly simple notion leads to other axioms. The note is indeed evidence of a debt but not necessarily proof of the debt — like a note signed in anticipation of receiving a loan or a car — and no loan or car appears.

The debt arises by operation of law under the legal presumption that when you get something it is not a gift — whether it is money or a car. You are presumed to owe the grantor something (usually money) at a fair rate of exchange or a price agreed by the parties. That debt exists regardless of whether anything is in writing anywhere.

So if I get $100 from you and there is no evidence of a gift, then I owe you $100 with or without anything in writing. That is the debt.

If I sign a note to you saying I owe the $100 to you and stating the terms for repayment, then the note is evidence of the debt and the debt is merged into the note so I don’t owe you $200 — $100 for the note and $100 for the debt. The note is is evidence of that debt and the terms of repayment. Not much can be said in defense other than that the debt was repaid and I have proof of that.

BUT if I sign a note payable to a party other than you then we have a problem. I received the money from you, but I executed a note to someone else at your request. OK, you still have a note that can be enforced. The merger doctrine still applies. (The debt is merged into the note).

NOW change the scenario  such that the third party is actually the party that “originated” or brokered the loan and you are not included in the paperwork even though you made the loan. Add the fact that I don’t know you made the loan. Unless there is a contract linking the third party and you the merger doctrine cannot work. Because the debt is the same in all instances —- when I received the money from you, I owe you $100. That is true even if I don’t know of your existence.

SO the gravamen of the fictitious claims by the banks is that a relationship is “presumed” between the originator and whoever ends up with the last assignment, endorsement (“indorsement”) or both. BUT as this case says, along with hundreds of others, is that if there is no actual exchange of value then there is no transaction, assignment or endorsement. And in that case the assignment is a nullity. It means nothing unless there is evidence of the sale of the underlying debt.

Just like the presumption is that your loan to me was not a gift, the transfer of a six figure debt is presumed to require valuable consideration (i.e., money), which is exactly what is stated in Article 9 of the UCC as adopted by all 50 states. There can be no enforcement of a mortgage without proof of value paid by the named enforcer.

AND there is the rub. Since the payee on the note and mortgage never gave me the $100 and nobody paid you the $100 that you gave me, the debt never moved. Therefore all documents purporting to transfer the note or mortgage are nothing in the eyes of the law (and common sense). Neither the note nor the mortgage can be successfully enforced by anyone, even though the fabricated enforcer can survive a motion to dismiss by alleging the basic elements of an enforcement action in its complaint in judicial states.

Fundamentally mortgage foreclosure is about money. That is why the ownership of the debt is vital to the efficacy of any document fabricated for purposes of foreclosure. The current “enforcers” are sham conduits for the major banks who serve as both underwriters of sham securities offerings and as Master Servicer of a non-existent trust. They are standing in the way of workouts and settlements of mortgages that were created in a chaotic, overheated market created by those same banks.

They have no place in the relationship between you and me. But you don’t even know that I exist because nobody has told you. And I know you are out there but I don’t know who you are. And if we could get together, we could probably work this thing out.

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