WEIDNER: IT'S THE ALLONGE!!!

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The Allonge- Billions of Dollars in Commerce Hangs on A Single Scrap of Paper

EDITOR’S NOTE: If you wrote a check to your next door neighbor, you would expect that he would either cash it or deposit it. But what if your neighbor did business with another neighbor and gave them a copy of your check along with a piece of paper they called an allonge or assignment. So now the third neighbor goes to the bank with a copy of the check and the allonge or assignment from the second neighbor to whom you had written the original check. What luck would the third neighbor have in getting your bank to honor the check. NONE.

What luck would they have in getting you to agree to instruct the bank to pay the third neighbor on that check. NONE. Because you know the real check is still out there and will probably also be presented for payment. OK what if the third neighbor also received the original check, but it it was not  endorsed or if it was, the signature and authority were unverified? NO PAYMENT. The same rules apply to a note.There is no difference between a note and a check. They are both intended to be negotiable instruments subject to obvious rules to prevent fraud.

Weidner is right. An allonge does not cure an unverified signature affixed without authority and contrary to the laws governing negotiable isntruments and contrary to the rules of evidence.

An allonge is only permitted if on the face of the note there is no room to indorse the note. If the room on the note exists to  write out the indorsement, then the allonge is invalid, no matter how good it looks. If an allonge is needed because the space on the face of the note isn’t there (very unlikely since there isn’t much to an endorsement) then it still must conform to the rules and laws concerning endorsements. The signature must be verified and the authority must be verified. Endorsement in blank is permitted by the UCC but not by the PSA (usually). An indorsement of a non-performing loan into a Trust or SPV cannot be accepted by the Trustee. I can deed you property without your knowledge or consent, but if there was no transaction in which you agreed to take the property, and you reject the tender of the deed, title does not change — and if there is Superfund liability because the property was a toxic waste dump, you are not responsible for the clean-up.

What the banks have done and are continuing to push is to create a toxic waste dump out of our title system. The Trustee of the pool does not have the authority to accept an endorsement of a loan that is not performing — that is opposite to the purpose of the pool which was to collect performing loans, spread the risk and if the loans went bad AFTER they were accepted into the pool, THEN the loss falls on the investors.

One of two things is true here. Either the loan never made into the pool because it was not endorsed when it was performing (or because the loan otherwise failed to meet the standards of underwriting set by the PSA) or the loan did make it into the pool in breach of the terms of the PSA, in which case the Trustee of the pool will be sued by the investors for damages. The reasonable man standard provides no aid or comfort tot he banks on this one. No allonge is going to get investors to agree to take non-performing loans into an already distressed pool.

There is no reasonable business explanation for why the investors would accept the non-performing loans or would be required to do so when the clear, express terms of the PSA and other securitization documents specifically provide that the the loans MUST be performing and if they stop performing the investors have recourse against the party who endorsed them — they can either demand money or a substitute loan to replace the non-performing loan.

July 2nd, 2011 · Foreclosure http://www.mattweidnerlaw.com/blog
Forget about The Constitution, forget about The Bill of Rights, a far more important document exists in this country and it’s called….The Allonge!
Those other old and forgotten documents are just, well, old and forgotten. Relics. Memories. Pesky annoyances that get in the way of the real thing of today and that is…The Efficient Flow of Commerce. The allonge is actually an old, old thing…older in fact than those other two old things that we should all stop talking so much about. The allonge sat around in an abandoned neighborhood at the intersection of law and commerce, forgotten and unused, never spoken of by judges and scarcely mentioned in any statute or the Uniform Commercial Code anywhere in the country until some brilliant mind in the Department of Commerce, Division of Securitization decided to drive through the rough section of town, past the whinos and blown out buildings and pick up that cast off old man called Allonge and take him for a ride.

And one hell of a ride it’s been.

The one widely circulated bit of scholarship on the subject Getting Attached Do your legal search and research high and low, all across the country and the above document is about all you’re gonna find. Not many opinions and those that do exist all head back to the same place…Black’s Law Dictionary…and the definition of allonge.

The key part, the essential element of the magical power of the allonge is that it was only ‘sposed to be used when there was no space on the note to make an endorsement….but that has not stopped the Sorcerers of Securitization from just totally ignoring this essential element of the Allonge and conjuring up one page hanging allonges and just dropping them in court files all over this country.

By now we all know what’s going on. At first the Dark Side didn’t even bother with getting the original promissory notes…..any old Affidavit of Lost Note would do….never mind that most of these Affidavits did not comply with the essential factual requirements of an Affidavit of Lost Note…namely personal knowledge that the affiant lost the note…most affidavits merely state, “The note is lost” and then some add for good measure, “Whoopsie!”

Then some pesky attorneys started asking questions about these affidavits and where the notes were and things started changing….First, foreclosures just ground to a halt….all across the country. Maybe part of it has to do with the inexplicable comments made by the Florida Mortgage Banker’s Association when they admitted the industry went about destroying original notes. Huh? You did what? You Destroyed Original Notes? What a Hoot! What a Gas….Read More Here!

On and then there’s all those admissions in cases like Kemp v. Countrywide describing how the Big Shot Banks just ignored all the fundamental law and rules on original notes.

But back to the Allonge. Oh the powerful and mighty Allonge.

But what’s really the point of all this? What do it matter? Does it Really Matter? Well, yeah, it really does.

These ain’t just technicalities that don’t mean ‘nuttin. The purpose behind original notes and chain of custody and endorsements is to protect against fraud and abuse and to ensure that the financial services industry is not cheating….(They couldn’t possibly be cheating or lying…could they?) We can trust Goldman…and BofA….and JPMorgan….can’t we?

The Den of Thieves commonly known as Wall Street would not possibly pledge the same original notes into multiple trusts, thereby increasing the value of each pledge many times over…would they? They wouldn’t do this even if they knew they were totally unregulated and it would be nearly impossible to catch for years and years down the road….would they?

Remember that the Rules of Evidence (used ever so occasionally in the context of foreclosure) and the Uniform Commercial Code are fundamentally intended to protect against fraud and to protect all parties in commercial transactions. “All parties” in the context of such a big part of our entire economy includes not just the homeowner and lender in a foreclosure transaction…no siree…it includes the entire world which should be able to depend on an accurate and trustworthy financial system….do you think we have an accurate and trustworthy financial system?

Finally, consider all of that in the context of a case where these issues are being expertly litigated. Very, very good stuff here….

BalderramaCompelOrder
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/07/BalderramaCompelOrder.pdf

BalderramaComplaint
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/07/BalderramaComplaint.pdf

CanellasSummaryJudgment
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/07/canellasSummaryJudgment.pdf

CanellasOrder
http://mattweidnerlaw.com/blog/wp-content/uploads/2011/07/CanellasOrder.pdf

Tags: bankruptcy, borrower, countrywide, disclosure, foreclosure, foreclosure defense, foreclosure offense, foreclosures, fraud, LOAN MODIFICATION, modification, quiet title, rescission, RESPA, securitization, TILA audit, trustee
Posted in bubble, Corruption, Eviction, securities fraud |