Reality vs Obscurity — How to Change the Tide

Failure to apply the law does not mean that the law should not have been applied.

“I think you are confusing the current reality of multiple erroneous court decisions with the legal reality of what is meant to be followed by statutes and case decision is going back to a time before this country was ever created and then afterwards the universal adoption of a National Code (now the UCC) as statutory law in each of the 50 states.” — Neil F Garfield in email to long-time follower of this blog.

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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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Virtually all the people who “take issue” with what I write here do so by pointing to case decisions that do not follow what I have written. That is because I don’t write the laws. I just write about them.

For example, consider my response to such a reader who is quite convinced I am wrong about some things especially when it comes to Bills and Notes (i.e., negotiable and nonnegotiable isntruments).

1. There is a HUGE difference between what is sufficient for pleading purposes and what is required for proof at trial.
2. These foreclosure cases are first about money not title. The avoidance of this single premise is responsible for nearly all foreclosures being approved by courts who simply do not understand Bills and Notes and who are presented with “cases” by lawyers who do not understand about bills and notes.
3. Going back centuries in statutory and common law the purpose of those laws was to “settle” the issue of when a transaction shall be considered completed so that people in the marketplace could have confidence in what they were buying and trading.
4. There was never an intent by anyone writing those laws or case decisions to untether the paper from the transaction with one potential exception — a holder in due course.
5. There was ONLY the intent to legitimize the paper memorializing the origination or transfer of a debt or delivery of financial instruments, services or goods. And other than an HDC the presumption that the paper is tied to some actual transaction is and always has been fundamental for anyone seeking relief based upon the paper.  The fact that courts for the last 20 years have erroneously treated the holder as a holder in due course does not change what the law requires and what it should require.
6. Notes and other instruments are only as good as the transactions memorialized by those instruments. If there is no transaction, the existence of a document is irrelevant, like a wild deed — unless (potentially) a third party in good faith and without knowledge of the borrower’s defenses (i.e., “that’s not my debt”), purchases the paper with money in an enforceable contract. Ignoring the “for value” wording in Article 3 and Article 9 is popular but it is wrong.
7. The Courts are prematurely shifting the burden of proof and the burden of persuasion to homeowners and other types of borrowers. The opposition presents a claim that at its essence is “because we said so.”
8. There are only two types of authority to enforce. (1) The owner of the debt (original loan) and (2) an agent who has authority from the owner of the debt.
9. The fact that the courts, so far, have largely untethered the debt from the fabricated paper only means that the courts are erroneously ruling on the ownership of the fabricated paper, rather than ownership of the debt arising out of a transaction in the real world.
10. I don’t dispute that, for purposes of filing a lawsuit or even recording a notice of sale, parties can claim whatever they want and if their claims state a cause of action upon which relief can be granted then the burden of pleading falls on the homeowner to deny those claims and raise affirmative defenses. But the burden of proof does not, by law, shift to the party named as “borrower”.
11. First the borrower must have entered into some enforceable actual transaction in the real world which in our current context would be a loan of money.
12. Second, the successors must have paid money for the loan for an assignment or endorsement to be supported by evidence.
13. In the end, appellate decisions will start moving back to legal fundamentals, to wit: that no rights accrue to an intermediary (“Trustee” or “Servicer”) who fabricates paper, commits forgery or robo-signing — all to enforce a debt that does not exist within their chain of players.

At the risk of creating the appearance of pulling rank, I remind you that

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