Emergency: Why the New Article 12 of the Uniform Commercial Code Should Be Rejected

The UCC and Foreclosure Law

The Uniform Commercial Code (UCC) governs nearly all financial transactions in the U.S. and has been adopted by every state. For homeowners, two sections matter most:

• Article 3 – Governs negotiable instruments (like promissory notes).

• Article 9 – Governs secured transactions (like mortgages).

For years, foreclosure defense has relied on these articles when challenging the legitimacy of “servicer” business records.

Enter Article 12: Controllable Electronic Records (CERs)

A new proposal, Article 12, has been adopted in some states (though not yet in Florida). It creates a new category: Controllable Electronic Records (CERs).

• A CER is defined as a record stored electronically that can be “controlled.”

• CERs specifically exclude assets already covered by laws like E-SIGN, the Uniform Electronic Transactions Act, or existing UCC articles.

• Although technology-neutral, the intent is clear: to address blockchain-based digital assets.

At first glance, this seems aimed at cryptocurrency and Web3. But in reality, it’s about foreclosure evidence.

The Real Purpose: Cementing Servicer “Business Records”

The Payment History report—the document most often used to prove a homeowner’s default—is issued under the name of a “servicer.”

The problem?

• Servicers do not process homeowner payments.

• Payments are handled by financial technology companies now reclassified as “servicers” by the CFPB (as of May 2022).

• This means “servicer” reports lack proper foundation and are inadmissible under current rules of evidence.

Article 12 opens the door to reclassify these digital reports as CERs, making them admissible as business records even when they’re not.

Why This Matters for Homeowners

If Article 12 gains traction, it will:

• Supersede centuries of precedent on evidence law.

• Allow fabricated “servicer” records to be accepted without challenge.

• Strengthen the death grip of investment banks over foreclosure courts.

In practice, this amendment legalizes what has long been illegal: foreclosures filed for profit, not restitution of an unpaid debt.

The Constitutional Problem

Under the U.S. Constitution, courts only have jurisdiction over justiciable issues—disputes where:

1. One party has been injured.

2. The other party caused the injury.

In foreclosure, that means proving:

• A real loan account exists.

• The account suffered a loss from a missed payment.

But in securitized loans, the loan account was retired the moment Wall Street bundled it into securities. There is no unpaid account. Without it, there’s no injury—and no justiciable issue.

A Call to Action

For nearly two decades, courts have been admitting fabricated payment histories into evidence. Article 12 is a deliberate attempt to codify this abuse.

👉 Homeowners, lawyers, and citizens must act now.

Write to your state Senators and Representatives immediately. Tell them:

• Article 12 must not be used to legitimize fake foreclosure evidence.

• “Servicer” records are not business records.

• No one should be allowed to enforce an invented debt.

The Bottom Line

Article 12 is not about blockchain or digital innovation—it’s about foreclosures and profits. By creating CERs, investment banks gain a new weapon to take homes without proof of debt.

Do not wait until it’s too late. Stand up, speak out, and demand accountability.

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Tags: foreclosure defense
Posted in evidence, foreclosure defenses, Foreclosure Questions, Uncategorized |