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§ 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.
See my blog article from yesterday and listen to the show.
Concentrating on PETE goes to the nub of the problem. But Judges are not looking for the letter of the law — especially if it conflicts with what they think is common sense. And frankly the UCC is not very helpful for a situation like this — where the banks institutionalized violating the law. It doesn’t make sense to the Judge. From the beginning of this era of litigation, which I would say was around 2004, it was generally thought that Banks would not risk destruction and diminishing their brands by committing crimes that would or could send bankers to jail. Individuals would but banks would not.
The Judge would believe this crazy story if it was an individual in a tee shirt with tattoos and a Hells Angel jacket but it is completely counter-intuitive to believe that the banks would have committed so many crimes in such an elaborate, complicated and complex scheme of layers and laddering. The banks would not do these things they are accused of doing and the regulators would not have allowed it. And today, it STILL makes no sense to most people and most Judges. The borrowers do not have sufficient education or experience to argue with the popular myth about what the Banks would do, why they would do it and why the borrowers are technically speaking in a far superior legal position when compared to the banks.
So everything presented to the Judge including outright proof of the facts supporting the homeowners’ theory of the case is filtered out by the completely wrong assumption that the bank would never act so irresponsibly and the borrower is merely seizing on hairsplitting notions to escape liability on a deal that went bad for them. The little voice in the Judge’s mind says “Even if you are right, the bank got hurt as well and our laws favor enforcement of negotiable instruments.” And the bank argument that failure to enforce would destroy the financial system and the economy therefore resonates strongly with nearly all judges on both the trial bench and courts of appeal.
The real cause of the trouble comes from the fact that the borrower got money at closing and the notion that assignments, endorsements, powers of attorney were not based upon any actual transaction. To say that there was no money at closing sounds ridiculous to anyone who has not analyzed this from the perspective of an investment banker. There you will easily see that there was no money in the original transaction and there was no money in any “succession” created by false paperwork. And the reason that is important is that in the end the intent of all law is to make a debtor pay his creditor. But who is the creditor?