Authoritative Copy
Not your everyday "collateral file"
Bringing light to the world? Opening eyes which
cannot see? This
has been previously explained in depth in other fashions. This
explanation is also supported with previous charts and articles along
with sources which support them. It is very important to understand the
difference between an [intangible] Authoritative Copy and a [tangible]
[paper]Promissory Note. One is electronic, One is paper. Simple?
Ever wonder what the "electronic" verbiage in a transferable record looks like?
Facts [Good v. WELLS FARGO BANK, NA, 18 NE 3d 618 - Ind: Court of Appeals 2014]
On March 14, 2008, Good purchased real estate in Elkhart. Good executed an electronic promissory note ("the Note") in favor of Synergy Mortgage Group, Inc., ("Synergy").[1] The Note included the following term: 11. ISSUANCE OF TRANSFERABLE RECORD; IDENTIFICATION OF NOTE HOLDER; CONVERSION FROM ELECTRONIC NOTE TO PAPER-BASED NOTE[[2]]
* * * * *
(B) Except as indicated in Sections 11(D) and (E) below, the identity of the Note Holder and any person to whom this Electronic Note is later transferred will be recorded in a registry maintained by MERS CORP, Inc., a Delaware corporation or in another registry to which the records are later transferred (the "Note Holder Registry"). The authoritative copy of this Electronic Note will be the copy identified by the Note Holder after loan closing but prior to registration in the Note Holder Registry. If this Electronic Note has been registered in the Note Holder Registry, then the authoritative copy will be the copy identified by the Note Holder of record in the Note Holder Registry or the Loan Servicer (as defined in the Security Instrument) acting at the direction of the Note Holder, as the authoritative copy. The current identity of the Note Holder and the location of the authoritative copy, as reflected in the Note Holder Registry, will be available from the Note Holder or Loan Servicer, as applicable. The only copy of this Electric Note that is the authoritative copy is the copy that is within the control of the person identified as the Note Holder in the Note Holder Registry (or that person's designee). No other copy of this Electronic Note may be the authoritative copy....
If you search, you may find a few cases referring to transferable records, but that does not mean more will not follow. When the world figures this out, I suppose it won't matter then, will it?
Notes
Negotiable instruments go way, way back. Look at the history of it to
know more if you want. The point is, then just as now, these were and
are tangible, which means it is something that was or is written upon,
whether paper, lambskin, etc.
A
promissory note[1]
is a document, signed by the person making the document, containing an
unconditional promise to pay a fixed sum of money to a named person, to
the order of a named person, or to the bearer (the person who is in
physical possession) of the document. Loans are typically formalized in
promissory notes, and since they often provide for payments over time,
they function to provide credit to the borrower who is the maker of the
note.
A
letter of credit[2]
is a document provided by a bank or other financial institution as a
guarantee that a specific sum of money will be paid once stated
conditions have been met. Letters of credit are often used in the import
and export business to ensure that payment will be received. Because of
factors such as distance, different laws in each country and difficulty
in knowing each party personally, the use of letters of credit has
become a very important aspect of international trade. (Note:
Relative also to [warehouse lender / originating lender]
electronic [eMortgage][ personal property]
[payment intangible] mortgage loans)
Key legal concepts in negotiable instruments law —
nemo dat and holder in due course[3]
The nemo dat rule is an important general principle of law that states
that only holders of good title (legal owners) can transfer ownership.
However, this rule does not apply to negotiable instruments. This is to
facilitate the free transferability of negotiable instruments, which
aids commerce in general. Because negotiable instruments can be payable
to the order or to the bearer of the instrument, they can be held by
someone who is not connected with the underlying transaction and does
not know of any potential defect in that transaction. If such a holder
holds the instrument in good faith and is not aware of any problems with
the instrument, the holder is a bona-fide purchaser for value or holder
in due course (HDC). This means that the HDC takes good title to the
instrument and can claim payment even if the person from whom he or she
received it did not hold title. The HDC acquires greater rights under a
negotiable instrument than an ordinary transferee of a contractual
right.
IF THE BANKS HAD FOLLOWED THE LAWS
Back in Grand pappy’s day, and according to past
case laws opined during the tangible and usually a 1st Lien
Holder[4]
world of litigation, it was simple enough to “Produce the Note”. It was
simple enough to prove a perfect chain of title in public land records,
wherever the real property may be located. Every bit of this proof that
was provided was due to the Lender, whomever it may have been, followed
the laws that governed the [tangible] paper promissory the borrower
tangibly indentured [signed] and the laws that governed the real
property. It was simple enough and those “laws that govern” are actually
still in place today.
When the mortgage bankers ass o citation
[mba] conjured up this nightmare, I don’t think they imagined it could
be exposed. Leave it t an engineer to get the job done. Nevertheless,
this “New Age Delivery” failed as a strategic business model. That is,
unless it was designed to implode? Read the MBA’s whitepaper back in
1993 by P. K. Slesinger. This person, along with others did a very good
job of pulling the wool over eyes that could not see. Is it wool-pulling
or is it the blind leading the blind? No matter which one is determined,
it was deception to the nth degree.
The first “flag” that was thrown in the whitepaper was;
“But
in the not too distant future, paper mortgage assignments may become as
common as dinosaurs--outside Jurassic Park.”
Boy was she ever so right about that statement.
Between the MBA, its cronies and
Mutilated Every
Recordation
System members, it is pretty
safe to say she got that one right.
The impression that was given to the many in the past about this “New
Age Delivery” system would greatly increase the ability to provide
mortgage loans to potential homeowners while at the same time provide a
valuable service to investors. It could have worked if these purported
“Lenders” have followed the laws for governing the [tangible] real
property mortgage. But, they did not.
The whitepaper claimed in 1993 that Freddie Mac was exploring "New Age
Delivery" claiming that this exploration allegedly represented a
proposal for grounding(?) the mortgage note for the life of the mortgage
loan immediately after origination. However, the term “mortgage note”
was a vague form of terminology when [electronic records] are involved.
Many are now finding this “grounding” was a cause of the short lived
life of a tangible secured real property mortgage.
It also claimed that subsequent transfers of the loan, as well as
transfers of servicing, would be registered in an electronic
clearinghouse which was essentially a computer. It explained that it
would be a book-entry system for transfers of mortgages and servicing
rights sponsored by participating mortgage investors and claiming not
only would Fannie Mae, Freddie Mac and GNMA be participating, but also
conduits, portfolio lenders and any other investors of mortgages.
The MBA made this sales pitch really well as this
is the beast we have today. Although anyone that can read this intention
in just about any electronic mortgage [eMortgage] guidebook, these
tricksters covered their tails, because they probably knew that someone
would eventually question the validity of these electronic mortgages, so
disclaimers that the laws underneath these payment streams must be
followed. The problem as it appears is the “underneath” [underlying
collateral laws]
part was not followed. Only the top UCC
[general intangibles] part is what the banks attempt to use to
foreclose.
Compare the difference between a paper airplane and a real airplane. It
is easy to tell the difference between them. Both are tangible, but one
is a combination of metals, glass, etc., but the other is a product of
pulp from a tree.
The [intangible] eMortgage and the real property [tangible] mortgage,
have similarities [both are mortgages] but the unequal difference seems
to be overlooked. The [intangible] eMortgage should most likely governed
by the Uniform Commercial Code [UCC], if secured, but the real property
[tangible] mortgage is governed by a portion of the UCC, but also laws
of local jurisdiction for the real property. It is easy to confound when
word crafting is at play.
With that rambling out of the way, you should learn to understand
particular terms you thought you knew. Look at the Freddie Mac eMortgage
Guide to see differences in “words” you thought you knew, unless you’ve
already read the words from the “other” side.
Holder
means a
Person described in Section 16(d) of UETA and in Title II, Section
201(d) of E-SIGN who has Control of a Transferable Record and who is
named as the Controller in the MERS® eRegistry. (Also known as Note
Holder, which is a field in the MERS® eRegistry.)
If you understand this term, you realize that
“Holder” is a controller of a transferable record. This does not mean
the “holder” of a [tangible] paper promissory Note. The confusion
probably cause by word crafting “Also
known as Note Holder…” can throw one off since the general consensus
is that the words “holder” once use to mean a [tangible] Note holder.
Hence the trickery.
Hybrid eMortgage
means an
eMortgage in which the promissory Note is an eNote signed by the
Borrower electronically and the Security Instrument is a paper
document signed by the Borrower using a
handwritten signature.
This should be a dead give-away since way
back then, the Courts of old
[5]clearly
opined “The mortgage follows the Note”.
This is also a clear indication of the MBA’s
intentions to commit securities fraud. What is more alarming is that
fact that a GSE, like the others actually wrote this into its
guidelines. How could the [tangible] security instrument attach to an
electronic promissory note that has not U.S. law to support it?
MERS® eRegistry
means the
electronic registry (operated by MERSCORP, Inc.) that serves as the
system of record to identify the current Controller and Location
Organization of the Authoritative Copy of an eNote.
That is all MERS is. MERS system identifies a Controller of an eNote.
MERS® System
means an
electronic registry (operated by MERSCORP, Inc.) that tracks changes in
loan servicing and beneficial ownership rights. Member companies update
the registry via MERS® OnLine (the browser-based interface) or through
batch file interfaces.
That is all MERS does. The MERS system
tracks changes in loan servicing and beneficial ownership rights of
electronic promissory Notes [eNotes]. That is it.
MIN
means Mortgage Identification Number, which is the 18-digit number
composed of a seven-digit organization ID, 10-digit sequence number, and
check digit. The MIN is used to cross-reference eNotes to modifications
and addenda.
To make things appears swell, the MIN was
placed upon the potential homeowners [tangible] security instrument and
[tangible] promissory note. This allowed for an illusion that the MIN
registered in MERS was an actual [tangible] borrower’s obligation to
secure the payment stream to the investor. It is unfortunate that there
is no payment stream or underlying secured indebtedness. Only unsecured.
MISMO®
means Mortgage Industry Standards
Maintenance Organization, which is the body created by the Mortgage
Bankers Association of America (MBA) in October 1999 to develop,
promote, and maintain voluntary electronic commerce standards for the
mortgage industry.
These may be the ones to blame? There are so many involved.
Modification Agreement
means an
agreement that amends a Mortgage or eMortgage. If the Note is an eNote
that is registered in the MERS® eRegistry, the Servicer, as Delegatee,
must initiate a modification flag update in the MERS® eRegistry and
register the Modification Agreement. (The eNote and the Modification
Agreement are crossreferenced on the MERS® eRegistry).
Every note registered in the MERS eRegistry
is an eNote. This provides an illusion to many whom believe a loan
modification is a [tangible] loan modification. This loan modification
mentioned is for an eNote. Most MERS electronic tracking agreements make
it clear that modifications will take place from time to time with the
eNote registered in the MERS eRegistry. Tricked you?
Mortgage File Documents
means all
Mortgage documents from the Mortgage closing (including paper or
Electronic Records), other than the original Note or Authoritative Copy
of the eNote, any Note or eNote addendums, any ARM conversion
instrument, any balloon/reset instrument, any Modification Agreements,
Assumption Agreements and any intervening assignments.
This part can confuse anyone. Since the
[tangible] documents were scanned and saved into a digital format, these
“copies” were attached to the alleged eNotes [eMortgages]. The big
problem is what most appear not to see. Conversion. Hence the following
term.
Process
means a series of actions or steps necessary to perform a particular
task or meet a particular requirement. Except where applicable law or
the context requires otherwise, a Process may be deployed through
electronic means, or involve steps or actions which are non-electronic,
or may involve a combination of both electronic and non-electronic
means, steps or actions.
5.2.10 Conversion of the eNote to Paper
Neither the Servicer nor any other party may convert an eNote owned by
Freddie Mac into a paper-based Note without Freddie Mac’s prior specific
and express written consent. In the event Freddie Mac gives its specific
and express written consent, the Servicer, after converting an eNote to
a paper Note, must update the MERS eRegistry to provide notice of the
conversion of an eNote to a paper Note.
Conversion of eNote to Paper? How do you convert anything into something
from nothing? (explained later)
THE CONFUSION
Record or Electronic Record
means information that is inscribed on a tangible medium or that is
stored in an electronic or other medium and is retrievable in
perceivable form.
When it comes time to try out the mortgage scheme, the banks henchmen
will produce an illusionary tangible medium from the electronic record
by simply pressing the “print key”, then claim it to be the “note”.
Easy? Yes, Lawful? Doubt it.
Servicing Records System
means a Servicer's computer hardware and software system for storing,
tracking and managing electronic Mortgage File Documents and other
Electronic Records related to servicing eMortgages.
System
means a computer system, or any component of such computer system, used
to create, register, sign, transfer, store, maintain, retrieve, and/or
secure an eNote, Custodial Document or other Mortgage File Document.
System Provider
means an entity providing a System, or any component of such System,
used to create, register, sign, transfer, store, maintain, retrieve,
and/or secure eNotes or other Mortgage File Documents.
Transfer of Control
means the transfer of a person’s right, title, and interest in an eNote
to another Person within an eNote registry. If the MERS® eRegistry is
the designated Note Holder Registry in an eNote, it also means a change
in the Controller of the eNote.
By now you are realizing this is not
grandma’s recipe for chicken soup is it? These corrupted minds gathered
the investment world like a trapper in the wild using the purported
potential homeowners [tangible] underlying collateral as the bait.
THE MEAT AND POTATOES
For me, it appears that the lack of
understanding for the layman resides with the intangible side of this
fiasco. This was intentional. Neither you nor the “persons” they sold
this idea to, actually understood it. Most likely they never even read
anything before they approved / enacted laws to support this electronic
mess. However, many learned people did provide the arguments back when
this [eMortgage] [eNote] far-fetched idea came into view and that this
could not lawfully work. But the MBA and its gang ignored this fact
because fame and riches were all they were looking for.
NO COMPARISON
For some reason, peoples are led to believe
the eNote [general intangible] is the same as the [tangible] [paper]
promissory Note. Nothing could be farther from the truth than this
belief. Take a look at some of the [eMortgage] words of confusion.
Authoritative Copy
(AC):
The unique, identifiable and mostly unalterable version of the
eNote that (1) identifies the person asserting control as the person to
which the Transferable Record was issued or most recently transferred,
(2) ensures that “each copy of the authoritative copy and any copy of a
copy is readily identifiable as a copy that is not the authoritative
copy” and (3) any revision of the AC is readily identifiable as
authorized or unauthorized.
So, let me guess? When the banks representative [eShill] makes a claim
to an alleged “note”, is this AC what they are referring to, and not the
[tangible] [paper] promissory note? Hey, after all, it is purportedly
not a copy, right?
Transferable Record
means an Electronic Record as described in Section 16 of UETA and in
Title II, Section 201 of E-SIGN. A Transferable Record is referred to
herein as an eNote.
This term does not even reflect UCC 3, but
ESIGN and UETA? However, ESIGN does mention something about UCC 3 when
attempting to “compare” “similarities” of an eNote and a [tangble] paper
UCCS note.
UCC
means the Uniform Commercial Code, which is a model commercial
transactions statute promulgated by NCCUSL and which has been published
and distributed by members of NCCUSL to the states, territories and
possessions of the United States for enactment. UCC Article 3 governs
negotiable instruments, including paper notes.
Slickery trickery; “UCC
Article 3 governs negotiable instruments, including paper notes”.
This statement is correct, but it can mislead a person to believe the
eNote scam, as the banks intentions were to lead most to believe the
eNote is the equivalent for the [tangible] paper note. It is not the
same.
UETA
means the Uniform Electronic Transactions Act of 1999, which is a model
act promulgated by NCCUSL and which has been published and distributed
by members of NCCUSL to the states, and territories and possessions of
the United States for enactment. UETA and E-SIGN govern eNotes.
Read it an weep Mr. Banker. Shame on those whom enacted this and other
electronic scheme laws before ever reading or evaluating the legality of
them.
DEFENDING THE ENOTE?
It is apparent that this eMortgage [eNote]
stuff is only being read by a few because this would be in the
headlines. Or would it?
I know this is a very confusing issue for
the world because nobody across the globe [global investors] [or others]
realize that for this eMortgage scheme to work, and according to the
GSE’s manuals/requirements, it would be accomplished solely by
electronic means, other than what would be required for the [tangible]
documents requiring a physical closing agent and notary. Speaking of? So
where did all the electronic signatures come from? I am speaking of the
millions of [tangible] paper promissory notes. The [tangible] paper
promissory Note was [tangibly] indentured by a physical person and a
mechanical device called a pen, hopefully filled with blue ink.
3.3.7 Presence at Signing
[Freddie Mac eMortgage Guide]
Each Borrower must be physically in the presence of
the closing agent and/or a notary public coordinating the signing of
the eNote and other Electronic Records; however, all Borrowers do
not have to be in each other's presence at the time of signing.
Did you electronically sign? Did know you “electronically signed”? You
didn’t! This confusion is actually meant for the “Account Debtor”. This
is the same with all electronic [intangible goods] mortgages.
3.3.3 Identify the Electronic Record to Be Signed
The eClosing System must be designed so that the eNote and other
Electronic Records to be signed by the Borrower are clearly identified
for the Borrower and are individually presented to the Borrower for
review and electronic signing. For each Electronic Record that is
required to be signed, the Borrower must take an action that expresses
the Borrower’s intent to sign the Electronic Record being presented. A
single Electronic Signature cannot be applied to multiple Electronic
Records.
3.3.4 Establish the Borrower’s Intent to Use an Electronic Signature
Seller/Servicer must assure that the Borrower is aware of the legal
consequences of the use of an Electronic Signature.
The System and/or Process used for electronically signing eNotes and
other Electronic Records with Electronic Signatures must:
• Provide the Borrower with notice of the effect the Electronic
Signature will have;
• Provide a mechanism or process for the Borrower to confirm that the
Borrower intends to electronically sign the Electronic Record(s)
presented;
• Provide the Borrower with notice that an Electronic Signature will be
attached to, or logically associated with, an eNote and other Electronic
Records, as applicable; and
• Capture the Borrower’s acknowledgment that his or her Electronic
Signature has been attached to, or logically associated with, the eNote
or other Electronic Records, as applicable.
How does a [tangible] paper promissory note become an [intangible]
electronic promissory note? Scan and save.