“Stay in Your Homes – You Are Going To Find They Don’t Have That “Paper” Up There On Wall Street”

One of the outstanding interviews after President Obama announced there would be an investigative task force into the Wall Street banks’ mortgage fraud was aired on The Rachel Maddow Show on Jan. 28, 2012.  It is a MUST WATCH TV interview – click here.

New York Attorney General Eric Super-Schneiderman has been appointed by President Obama as a key leader in the investigation.  Needless to say AG Schneiderman has an inside view of the fraud that occurred during and as a result of the previous housing bubble and now, with Federal resources, there it is more likely that the full securitization fraud story will unfold.

Homeowners and their collateral were the “patsys” in this ‘too good to be true’ mortgage dream scheme. Investors were the “marks” or “pigeons” whose monies were scammed to the detriment of Trillion$ in retirement and pension fund accounts that have been obliterated in the biggest Ponzi scheme of the last two civilized centuries.

Yes, someone is accountable which is what this task force has been charged with determining.

The depth of the damage is yet unknown. The crooks had been planning the heist for several decades (and generations). Laws and statutes have been changed in nearly every state in the nation. And Federal laws have been altered and repealed in a planned effort to pull off the worldwide swindle. Economists do not think this was merely a miscalculated error. There was too much precision in the information gathered thus far. And the links to politicians who benefited from the “dole” and sweet favors have already started to surface. Open the doors and let them bolt – if they need to be found …they cannot hide.


Unknown to the average citizen are the subtle changes that were nurtured by the banks in our states’ Uniform Commercial Codes.  One very interesting UCC statute is § 3-301 that was revised (along with various others) around the 1990s. The banks pushed the revisions under the guise of curtailing check fraud with claims that it was over-burdening the courts.

Nice cover if anyone could ever believe that was all they had in mind; however, the timeline interestingly enough coincides with the creation and foundation of the mortgage scheme that was carried over from the 1970s and 80s and redesigned with “MERS” in the early 1990s… Of course, that’s when most of the revisions were passed.

Hawaii House Representative Mele Carroll has introduced a bill HB 2705 to repeal the outdated HRS § 3-301. Every state in the union faced with fraudulent mortgage assignments and foreclosures should consider doing the same thing.

This is the UCC statute that needs to be repealed: § 3-301.  PERSON ENTITLED TO ENFORCE INSTRUMENT.

“Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d)A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

Yeah, it says even if the bank is in wrongful possession of a promissory note – it can still enforce the note… doesn’t sound like it was just designed for check fraud, does it?

Opinion is that the check fraud claim was just a cover to pass legislation that would create a great deal more money for the banks than the loss of fraudulent checks. In fact, this was the reverse, as § 3-301 allowed the banks to wrongfully possess hypothetical promissory notes and legally get away with it.

Since the 1990s, banks have become much more sophisticated and check writing has been substantially reduced with the use of debit cards as well as software safeguards make it much more difficult to pass a bad check. The uses for UCC § 3-301 have dramatically decreased except for allowing banks to get away with mortgage fraud. The time has come to roll back some of the bank manipulated revisions in legislation.

In the defense for repealing UCC § 3-301 is a very compelling argument in that New York refused to revise their UCC. It certainly doesn’t give the banks the edge and given that Wall Street exists in New York, New York probably knows something the rest of the country is just now learning – the banks are dirty. And if you have to compromise a total repeal here is the New York version:

2010 New York Code / UCC – Uniform Commercial Code
Part 3 – § 3-301 – Rights of a Holder.

Section 3–301. Rights of a Holder.

The holder of an instrument whether or not he is the owner may transfer or negotiate it and, except as otherwise provided in Section 3–603 on payment or satisfaction, discharge it or enforce payment in his own name.

While this one little statute doesn’t appear like it could do a lot of damage, Judges that are bank bought and/or bank friendly can lean on it to overrule a homeowner’s objections to a fraudulent Assignment of Mortgage. There are other defenses, but Judges know that every time they defeat the homeowner, the more costly it becomes for the fight to continue and their bank friends win by default.

This means you need to lean on your legislators to do the right thing.  Repeal § 3-301 – give it a nap. 49 states need to take this action – learn from New York.  If check fraud pops back up then bring it out of mothballs and plop it back in – but it’s doubtful that will happen given the today’s technology.

Remind your state and federal Legislators to beware of bank bribery and nurturing changes in the federal and state laws.  Watch campaign donations and call this to your Legislators’ attention. We all need to be DOERS to effectuate change.

Thank you Cindy for the heads-up on the Maddow video – Awesome!

God Bless you Rep. Carroll for HB 2705.  You are an inspiration.

18 thoughts on ““Stay in Your Homes – You Are Going To Find They Don’t Have That “Paper” Up There On Wall Street”

  1. Thats sooooo crazy I was reading that code just last night at home in CA and had to read it twice because I thought I was seeing things.I said does that say what I think it says?That any one and I do mean any one can make a claim to any other persons note even if you dont have the note as proof.I am going out today and staking my claim in all the home around my home.gimme,gimme,gimme dat house its mine,mine, sounds just like the banks huh.

    • That is exactly what I did in JAN 2008 by becoming Sovereign, and taking control of my name and EVERYTHING on earth with my NAME on it, holding that as a mortgage, based on my promissory note which is my BIRTH CERTIFICATE, which was bonded for $1,000,000.This makes me a “Secured Party Creditor” in charge of that $1,000,000 account in the Us Treasury, that has accumulated interest for 59 years.So how can I possibly owe anyone? I can’t. Too good to be true? Where in the funk do you think the TARP bailouts came from? Taxpayer’s money,remember? Simply put,either you are in charge, or the JEWS that own the Federal Reserve and run the Treasury are.

  2. Nice timing Obama. This should insure your re-election. Now what will you do for the millions of people who have already been foreclosed, uprooted and had their lives destroyed by your complacency and the bank’s fraud?

  3. This is but one example of laws that were changed. Check out NY UCC 3-804. States that have adopted the revised UCC no longer have this section.

    In KY there was a change to recording statutes as well – in 2006. Read subsection 3. Then read the revision, which added subsection 6 in 2006.

    Click to access 360.PDF

  4. In Hawaii please call, write and e mail, and blog, to support Rep. Mele Carrol’s amendment
    HB 2075, we need to hold on to our rights, and make them follow the law.

    I have been fighting this for 3 1/2 years, with Deutsche Bank, One West, Indymac; and MERS


  5. Section 1–201. General Definitions.
    (20) “Holder” means a person who is in possession of a document of
    title or an instrument or an investment certificated security drawn,
    issued or indorsed to him or to his order or to bearer or in blank.

    • Unless the note is actually a security and falls under Article 8 which governs Article 9.

      8-501 Securities account; acquisition of security entitlement from securities intermediary.
      (d) If a securities intermediary holds a financial asset for another person, and the financial asset is registered in the name of, payable to the order of, or specially indorsed to the other person, and has not been indorsed to the securities intermediary or in blank, the other person is treated as holding the financial asset directly rather than as having a security entitlement with respect to the financial asset.

  6. Section 3–603. Payment or Satisfaction.
    (1) The liability of any party is discharged to the extent of his
    payment or satisfaction to the holder even though it is made with
    knowledge of a claim of another person to the instrument unless prior to
    such payment or satisfaction the person making the claim either supplies
    indemnity deemed adequate by the party seeking the discharge or enjoins
    payment or satisfaction by order of a court of competent jurisdiction in
    an action in which the adverse claimant and the holder are parties. This
    subsection does not, however, result in the discharge of the liability
    (a) of a party who in bad faith pays or satisfies a holder who
    acquired the instrument by theft or who (unless having the
    rights of a holder in due course) holds through one who so
    acquired it; or
    (b) of a party (other than an intermediary bank or a payor bank
    which is not a depositary bank) who pays or satisfies the
    holder of an instrument which has been restrictively indorsed
    in a manner not consistent with the terms of such restrictive
    (2) Payment or satisfaction may be made with the consent of the holder
    by any person including a stranger to the instrument. Surrender of the
    instrument to such a person gives him the rights of a transferee
    (Section 3–201)

  7. Section 3–201. Transfer: Right to Indorsement.
    (1) Transfer of an instrument vests in the transferee such rights as
    the transferor has therein, except that a transferee who has himself
    been a party to any fraud or illegality affecting the instrument or who
    as a prior holder had notice of a defense or claim against it cannot
    improve his position by taking from a later holder in due course.
    (2) A transfer of a security interest in an instrument vests the
    foregoing rights in the transferee to the extent of the interest
    (3) Unless otherwise agreed any transfer for value of an instrument
    not then payable to bearer gives the transferee the specifically
    enforceable right to have the unqualified indorsement of the transferor.
    Negotiation takes effect only when the indorsement is made and until
    that time there is no presumption that the transferee is the owner.

  8. Sorry folks, But I disagree with your take on 3-301
    The UCC is a brilliant code, and must be read in conjunction with all the relevant sections. There is also a misquote above pertaining to 3-309 There is no such section.

    My read on this as an attorney, with a real J.D. and having studied the code extensively both in real life and in school, is that the failure of the banks and parties to properly endorse these “negotiable instruments” causes big problems, and your point about 3-301 is complete hogwash. NOWHERE does it say that someone in WRONGFUL POSSESSION of a note can enforce it. Bullshit. There is a difference between a holder and an owner. Wrongful possession means a thief. A holder can have the rights of the person they received it from. Unless they become a holder in due course which has been completely ignored in the litigation, and in this post, then they can have better rights. To be a Holder in due course you must take ” for value, in good faith, without notice of any defect”. There is plenty of notice and defects.. So the Holder in due course has not been raised much that I have seen.

    However, I am enjoying your analysis on the funding issues of the securitization Trusts. It appears to be your field of expertise. It also seems to be the basis of a large conspiracy to avoid SEC regs, and may result in many discharged mortgages for other reasons.. I am not a securities attorney, but it certainly raises that issue.

    You as a finance guy might want to consider the credit default swaps that are being cashed in on the pools, and the defaulted loans. Every time one of these servicers loses a file, and needs it sent in again, perhaps their motivation is to run the clock, get it qualified as a default to authorize a payment from the swap.

    The evil scheme may very well be that the ensuing foreclosure on the reduced depressed housing value is used to offset the gain on the swap. Thus benefiting them in their tax exposure. So it would seem to reason that the worse the values in the housing / real estate market get, the better for the foreclosing “trust pool” because they offset more of their gain on the swap and keep actual cash, while still accumulating wealth.in real property. Perhaps you might examine the swap issue. They are listed in the prospectuses on file, and in the PSAs.

    What I find most disturbing is that AG Holder, and his sidekick Lanny Breuer and others worked at Covington and Burling (the law firm that represented the banks and created MERS). Now they are conveniently avoiding the prosecution of the “robosigners” who are criminally fabricating documents, forging signatures and being notarized by other criminals in a calculated ongoing criminal enterprise. Yet without those fake, forged, and criminally notarized documents the MERS system won’t work. Interesting..

    Perhaps they are trying to protect their old firm from a malpractice suit, or even better criminal indictments.

    But the real issue seems to be their intentional act of omission. There should be a special prosecutor, investigations, and possible indictments of these two. We don’t need government handouts, we need justice and accountability to the rule of law.

    Section 3–301. Rights of a Holder.
    The holder of an instrument whether or not he is the owner may
    transfer or negotiate it and, except as otherwise provided in Section
    3–603 on payment or satisfaction, discharge it or enforce payment in
    his own name.

    The operative word is “negotiate it”.. That means endorsement, for value, which means evidence, and chain of custody, and contract rights. Transfer would speak to a bearer instrument.

    When does the film come out??

    • I don’t know how long you’ve been practicing UCC law but this comment is incorrect: “My read on this as an attorney, with a real J.D. and having studied the code extensively both in real life and in school, is that the failure of the banks and parties to properly endorse these “negotiable instruments” causes big problems, and your point about 3-301 is complete hogwash. NOWHERE does it say that someone in WRONGFUL POSSESSION of a note can enforce it. Bullshit.”




      “Person entitled to enforce” an instrument means (i) the holder of the instrument, (ii) a nonholder in possession of the instrument who has the rights of a holder, or (iii) a person not in possession of the instrument who is entitled to enforce the instrument pursuant to Section 3-309 or 3-418(d). A person may be a person entitled to enforce the instrument even though the person is not the owner of the instrument or is in wrongful possession of the instrument.

      The only state that did not revise the UCC was New York…SC held out until 2008 – that’s when it became obvious that this was meant for mortgages because there was no need to protect for check fraud anymore) maybe that’s where you practice. As for the “309” that was referring and copied right from Hawaii Revised Statutes and it DOES have a 3-309. http://www.capitol.hawaii.gov/hrscurrent/Vol11_Ch0476-0490/HRS0490/HRS_0490-.htm

      With a little more research you’ll learn that the states have modified their own version of the UCC laws so the wording and the may vary. Also, judges have their own discretion to make illogical conclusions and it takes a very high IQ to understand and absorb the securitization process and have total recall on UCC law to mix with the convoluted bankster terminology, which lower level courts (per diem judges) just do not have. But when the man in the robe makes a bad decision – that what appeals were made for – problem is they are all so concerned that there pensions will dry up if the banks go under that they are too self-absorbed to realize the pensions are already gone.

      The judges are getting together to discuss and share ideas to defeat the borrower. Is that competent law – nope. But they think they are saving America… all the foreclosures they want to allow isn’t going to overcome the $600 TRILLION in debt that Wall Street has committed the American public to. Outrage fatigue doesn’t even come close! But yes, idiot judges are using 3-301 – even with ZERO evidence of an actual note. Yeah, in Hawaii you don’t even have to show the note. And if that’s not enough, I heard a judge today say that the homeowner had no right to challenge the assignment – even though he had a certified fraud report with an affidavit (that was not challenged by the opposing counsel) that said the assignment was VOID. So, in Hawaii you can fabricate documents and take over property all day long.

      Any crooks out there want to make a lot of money? Start filing fraudulent assignments of mortgage in the Hawaii Bureau of Conveyances – just pick a property! Because according to this judge, who has only seen a Xerox copy of a note, the assignment of mortgage to a trust that was too late because the trust had closed 5 years earlier was filed “correctly” in the Bureau of Conveyances… a department, that according to a local Senator does not check for accuracy – it is obligated to file everything. Go figure!

      • “There is also a misquote above pertaining to 3-309 There is no such section.”

        Of course there is Section 309 in Article 3. Of course there is!! The only way to miss it is to refuse to look. It is found so very, very easily right here:


        Perhaps the commenter ADR -Raleigh J.D. is a real attorney, with a real JD … but when folks make mistakes this easy to avoid … I’ll let readers draw their own conclusions.

  9. Reblogged this on Deadly Clear and commented:

    Deadly Clear’s New Years’ Resolution for 2015 is to urge our readers to convince state legislatures to repeal their versions of UCC Article 3-301 to make it clear that in a mortgage loan situation that a clear and convincing chain of endorsements is necessary before a foreclosure may proceed. The use of electronic transfer of the homeowners’ documents without the homeowners’ explicit consent has led to an abuse of copying notes and mortgages into a cyber data storage cloud of information readily available to the hundreds of potential thieves and their affiliates – without sufficient hacking protection allowing anyone the opportunity to break in and download documents, as recently noted by the banking industry invaded by hackers.

    The use of UCC Article 3-301 by the banking industry and securitized trusts is a disingenuous manipulation of the intended law.

    • “without sufficient hacking protection”

      I don’t believe such protection exists.

      I’m with you on the repeal of UCC 3-309.

  10. I am just finding this entry on the UCC Article 3 — send this in to a trusted colleague Bob Janes (www.fightingtheforeclosuremachine.com) since he educates and his book by the same name centers a lot on this. I’d like to copy you on his reply – which has a different take we would do well to study and even ask his clarity on. Can I email it to you privately? Or shall I cut and paste his commentary here? Thanks!! Renee Yamagishi

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