Tag Archives: security instrument


The author of this post is not giving legal advice, just reporting what’s out there.  You should consult a competent foreclosure defense attorney regarding such matters, as the contents in this post appear to reflect the court’s intolerance for homeowners who file bankruptcy to stop a foreclosure. 

OP-ED — 

Folks who are in trouble with their mortgages in Florida really need to strategize before taking the plunge into the abyss known as the Florida legal system, where state judges clearly have “agendas”, the Florida Legislature has “agendas” and the federal courts have “agendas” … all aimed at taking of property when you can’t make the payments on it.  It’s not often that the author of this post steers away from chain of title issues, but there appears to be widespread ignorance (or in the alternative, intolerance) on the part of the Sunshine State’s legal system, which makes things “not so shiny” anymore, given the recent spate of legislation and court actions.


All one needs to do is examine court dockets to see how fast, over time, that Florida circuit judges have blindly assumed that the financial institutions coming before them actually own the promissory note they’re trying to enforce.  It would seem that judges simply rely on the blatant attack on the property owner as just because otherwise, why would this particular bank show up in court?   Because they can!  And they do!  And judges give them so much leeway that Florida homeowners are stymied for options.  This is why the State of Florida has so many zombie homes (despite what the politicians, economists and the media would have you believe) and shadow inventory that sits empty because of title issues.  In very few cases I’ve examined have I seen evidence within a transcript that allowed for a forensic examination of the note, to make sure it’s “original”, like the bank’s attorney says it is.  To show you that the inequity between state court systems is similar in nature, I’m consulting a case in New Jersey where the bank’s law firm sent a “cover lawyer” into court with what appeared to be a “faxed copy” of the note, claiming it to be the “original”.  I think most judges, even in light of the foreclosure defense attorney’s objections, could tell the difference, but nope … this judge said that the word of the law firm and the faxed copy of what it self-authenticated is good enough!  Can you believe that shit?

Another part of the equation is the existence of foreclosure defense lawyers who have seen fit to turn the foreclosure debacle into a cash cow by using delay tactics to keep property owners in their homes, despite the probable outcome that only about 1 in 25 cases brought into court makes it past the 810-day mark in a Florida foreclosure cycle.  Knowing that the odds are never “in their favor” (attributing the quotation to The Hunger Games), frustrated mortgagors then contemplate using bankruptcy court to dodge the “sale bullet”. However, things in Florida are about to change.


Effective July 1, 2017, Florida homeowners who run to the bankruptcy court and get their promissory note discharged are going to find themselves without other options to fight the foreclosure.  See House Bill 471 here if you don’t believe me: fl-hb-471  It’s only two pages long and I’m sure you can read (if you’re reading this)!

Simply put, any documentation that is filed in Bankruptcy Court which would indicate surrender of the property (commonly seen in Chapter 7 cases) makes it legally okay for the bank’s attorney to submit that document that was filed in the Bankruptcy Court under penalty of perjury to a Florida circuit judge to get a Final Judgment of Foreclosure.  I see this as a definite negative if you’re trying to fight a foreclosure.  But then again, most homeowners are like electricity.  They want to take the path of least resistance; and declaring bankruptcy is certainly a hell of a lot cheaper than fighting a foreclosure through Florida’s appellate system.

It appears that folks don’t understand the difference between an in rem and an in personam action.  Enforcement of a security instrument, which in Florida’s case is a mortgage, can only happen when the party claiming to have an interest in the property can prove ownership.  An attack on the property through the recorded security instrument is an in rem action (like quiet title actions).  This is why I wrote the book The Quiet Title War Manual (with the professional help of California attorney Al West).  The book explains the difference between the note and the mortgage.  Folks who don’t get it should get this book and read it, because when Al West and I taught quiet title workshops, we hammered these basic principles into the heads of the attendees.  In personam actions are actions involving debt, which in this case is the promissory note, NOT the mortgage!   How convenient it is that the Florida legislature has come up with this House Bill in the wake of the recent court conflicts within the federal system!


Let’s look at the case of In re Hookerin-re-hooker   Once you get past the first three paragraphs, you’ll understand why the Florida legislature did what it did to help the banks fight continuous counterattacks in state court.  Again, how convenient, to avoid further confusion in the courts.  Let’s just legislate this away, shall we?

Now we come to the slam dunk that affects the way the 11th Circuit Court of Appeals (which covers Florida), has ruled that Chapter 7 debtors who file a bankruptcy action and put forth a statement of intention to surrender the real property cannot later contest a foreclosure in the state court. in-re-failla   If you read the first paragraph of this PUBLISHED OPINION, and then read the background on the case, it appears that the homeowners wanted to “have their cake and eat it too”.  The Failla case simply states: “Debtors who surrender property must get out of the creditor’s way.”   The Florida Legislature (I believe) made sure that a bill was passed that shut off the trough at the source of the feed (so to speak).

No more hogs at the trough.  There have been so many different points of view, it’s understandable that the Florida legislature would pass a bill that state courts could point a finger at and say, “SEE?”   So for those of you thinking that running into bankruptcy court (in any state for that matter) and declaring your intent to surrender the property (God forbid, why would you do that?) under penalty of perjury is so confusing to some when their state court cases get shut down.


It has also become relatively apparent that any homeowner that has placed themselves in the foregoing position and continue to litigate their foreclosure in the state courts of Florida are likely to get sanctioned!   Vexatious litigants are likely to wind up in jail on contempt charges!  I say this because of what happened to foreclosure defense attorney Stuart Golant, 70,  in the Palm Beach County courtroom of Senior Judge Howard Harrison for simply making a motion!

Florida homeowners have had the deck stacked against them by the courts and the legislature in favor of the banks when it comes to promissory note enforcement.  Once a mortgage has been recorded in the land records where the subject property is situated, all it takes is a missed payment and the door to “foreclosure hell” opens to swallow the homeowners whole.   I can’t help but wonder what kind of counseling homeowners have received, given the phone calls and emails I get regarding strategizing an in personam case against them.


In a judicial foreclosure state like Florida, a lender comes to court and waves the promissory note around and claims it has the right to enforce the terms of the note!  It should be required to prove that the note is genuine, forensically.  Have the actual paper tested.  Have the ink tested.  Check for pixelation by blowing the note up on a computer screen to examine evidence the note was photoshopped.  Object to the note being entered as the original.  I believe a majority of securitized notes are copies of what was downloaded into the MERS® System and later shredded, as I’ve covered in previous posts.

Once the lender gets the note in front of the court and gets it admitted into evidence and gets the court to agree that U.C.C. Article 3 (Negotiable Instruments) exists and that the alleged lender has the right to enforce the note, THEN the Lender gets to enforce the Security Instrument, the in rem part of the equation.  The security instrument (Mortgage) is then “ripe for the picking”.  Believe it or not, most homeowners think that the lender is foreclosing on the mortgage.  That couldn’t be further from the truth!  The Lender is foreclosing on the Note.  Proving it has the right to enforce the Note means the Lender gets the right to enforce the Security Instrument, not until!

Bankruptcy Courts are designed to handle in personam scenarios.  In personam relates to debt.  Promissory notes are evidence of debt!   Recorded mortgages are evidence of security interests, not debt!   If you’re going to use the bankruptcy court to alleviate your personal obligation to the note, and liquidate it in a Chapter 7 bankruptcy proceeding, be prepared to move out of your home!

Thinking twice about running into Chapter 7 bankruptcy court to stop the sale?   The “system” is ready for you!   (Hint: This is why we have Chapters 11 and 13!)  No matter, if you live in any state where you think the “deck is stacked” against you, plan your “end game” BEFORE you go into default, not after!

And this is why I don’t talk about in personam issues much.  Homeowners really should get a financial education before they sit down at the closing table.

Tune into kdwradio.com every Friday night at 6:00 p.m. EST for my radio show, City Spotlight: Special Edition!   Order any of the author’s books by visiting Clouded Titles!

For those of you waiting for the new FDCPA book, it’s almost ready!   Pre-order your copy today!  (FDCPA actions are for dealing with debt collectors!)


Filed under Financial Education, Op-Ed Piece



(Tallahassee, Florida) — Florida homeowners have been politely told to “stick it” by their state’s Supreme Court when it comes to statutes of limitations issues involving mortgage loans.  Frankly, given the joke that was the Beauvais decision in the Third DCA, I can’t much say that the arguments in Bartram were posited any better because any time you bring up a jurisdictional argument, the courts are going to jump all over it in favor of the banks.  When you have a Republican administration running things, it should be common knowledge to everyone that it’s “status quo” in favor of the banks.  So then, why do business with them?  The way things are all screwed up in the land records all over Florida, how do you even know WHO owns your loan with the right to enforce it?   By claiming a party is barred due to statute of limitations (according to Bob Janes, J.D.’s past teachings) issues, you are signaling to the Court hearing your case that the other party has a right to dispute those allegations.  So why plead them?  Because someone thought they should have a free house, they let the banks have another “bite at the apple”.  This is bad case law for Florida homeowners who think they should rely on this strategy ad infinitum, ad nauseum.  So what if I’m not an attorney, I can read the pleadings below, just like you can.  You read them.  Then you be the judge.

See the Florida Supreme Court ruling here: bartram-v-us-bank-na-et-al-fl-sup-ct-no-sc-14-1265-nov-3-2016

This case does NOTHING for standing however!  By showing the other side doesn’t have standing to be in the courtroom, you don’t need to rely on statute of limitations issues in the first place!   That works in every state of the union the last time I checked!

All one has to do is look at the case in chief on Page 3 (of the 35-page ruling) to see that Bertram didn’t dispute that he stopped making his mortgage payments and why, or if he even stopped making them.  Also notice that the Court “rephrased” the question brought before it … just because it was a “matter of good public policy”.   The bottom line is … YOU DON’T GET A FREE HOUSE, no matter how badly you think the bank screwed you over, or for whatever reasoning you may believe it was okay to stop making mortgage payments.  Given this “policy decision”, wouldn’t it be a novel idea if every homeowner in Florida just stopped paying their mortgage just to see what would happen and then challenge everything BUT statute of limitations?  I believe over half of them would win … and a move like that would effectively SHUT DOWN the entire court system in Florida!  With “policy” like this, the banks can just keep coming in over and over and getting more than just one bite at the apple.

Let this also signal to those of you contemplating a purchase of real estate in Florida, especially you foreign investors who have been told that the Sunshine State is “ripe for the picking”:  You’ll get screwed by Florida Courts as much as people who live here full time are!  If you don’t have the money to fight a protracted court battle, the first sign of financial trouble you have while living here or renting your property here, don’t be surprised if some bank doesn’t just pop it’s head out of nowhere and announce it’s foreclosing on your property!  That’s the way things are here in Florida I guess, because most homeowners I’ve talked to about their real estate dilemmas in Florida that have been to the Circuit Courts of this State felt abused by the courts.  After all, Florida judges have to pay for their homes too, with those retirement pensions vested in the very RMBS securities that caused the financial collapse in 2008 … so why shouldn’t you lose your home too?   All semblance of logic in the judge’s brain generally goes out the window when the banks’ attorneys say, “They just want a free house, your honor!”  This is why you have to be prepared to appeal.

Read the first paragraph on Page 4 of this ruling … where it says “dismissal of the foreclosure action against the mortgagor (that would be YOU, the Borrower) has the effect of returning the parties to their pre-foreclosure complaint status.  That means that the lender, without further adieu, can come in and keep repeatedly foreclosing, unless you can get a dismissal based on fraud on the Court, dismissed with prejudice, with sanctions in the form of the house (see U.S. Bank v Harpster for example).  In this case, the David J. Stern law firm secretary, Cheryl Samons, a law firm robosigner, affixed her signature to a document as Assistant Secretary of MERS and caused it to be backdated to before the notary’s commission was valid, thus, negating the assignment based on fraud.  Then-Pasco County Judge Lynn Tepper was not amused by the revelation of facts in that instance.

When securitization is involved, STANDING … and NOT statute of limitations … wins cases!  None of the indorsements on the banks’ notes are dated so there’s no effective proof of WHEN the transfer actually occurred.  Even if you do get your attorney’s fees back from the bank, this case just gives the banks (whether you argue statute of limitations issues or not) the opportunity to come right back in and attempt the same foreclosure all over again.

Let’s take another look at your security instrument, shall we?

The entire security instrument (in Florida, that would be your mortgage paperwork) should be recorded in the public record in the county where the subject Property is situated in.  The security instrument has all the terms and conditions contained in it.  It’s a contract between you and the bank that leaves you with little to NO ROOM at all if you can’t make your payments, from losing your property.

Most homeowners didn’t even read the mortgage before they signed it.  They just wanted the fricking keys to the house and then worry about making the payments later.  There is no deception here folks.  No one held a gun to your head.  Now we have “rephrased” case law that says the lenders can come in and outspend and outsource you until you cry “uncle”, so what’s the point of owning real estate in Florida?  If you can’t pay cash and own the property outright, you risk being foreclosed on AT ANY POINT IN THE OWNERSHIP GAME!

We have had cases where all-cash-paying homeowners in Florida ended up facing attempted foreclosures by the banks who claimed to hold a mortgage on their properties!  That shouldn’t surprise you, should it?

It’s a proverbial “cloud” over the Sunshine State!  But wait … this happens in every State in the Union because the banks aren’t really punished for their screw-ups.  The U. S. Government has legislated a deal to protect the banks (Title 12, U.S.C.A.) and set up a whole bunch of regulatory agencies to interfere with any homeowner trying to get a “leg up” to save their home.  Despite Bertram’s filing a quiet title action, he argued the note. That’s fatal mistake #1!  Title is title and note is note.  At best, the note would have been unsecured if Bartram would have been successful in expunging the mortgage.  But that’s not what happened here when the smoke cleared.

We’re not even talking about standing in this case, right?  It’s all about statute of limitations on debt collection, which Florida’s highest court has succinctly “rephrased” to fit public policy.  So far, there have been a lot of “take-aways” from this case.  Here are some links to thoughts from others (NOTE: Links may not work indefinitely.):








While the legal implications are narrow, statute of limitations on debt collection in Florida might as well be chucked out the window as a winnable court argument if your home is in question because we all know who runs this government … the banks, right?  Seriously?

Most attorneys I’ve talked to say that the lack of standing is the key to getting your win in Florida (and elsewhere) because the courts have no jurisdiction to rule on anything when the bank doesn’t have a right to  bring a foreclosure action.

The problem is however, that:

  1. The banks have more money than you do and can outspend and outsource you (and your attorney) if the home is worth enough to them to steal (foreclose on using fraudulent documents);
  2. The banks still rely on messed up paperwork, so between the foreclosing law firm and the servicer, stuff is still getting “created out of thin air” to give the bank standing to foreclose; and
  3. The banks coming into court are generally, in reality, represented by their servicers, not knowing that they (the banks) are actually the named Plaintiff in the action, which is servicer fraud.  This has been ongoing for over a decade!

So the answer here is to:

  1. Stick to your guns regarding standing and show up in court and allege the lack thereof;
  2. If you’re going to retain counsel, get an attorney that really knows about foreclosure defense and is up on current case law; and
  3. Have an “end game” (Plan B) in case you run out of money.  This doesn’t apply to the 95% of you that run away at the first sign of trouble.

So be it.  I doubt this will be appealed to the U.S. Supreme Court, so it looks as if Florida is stuck with this decision.




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Glaski is only a “baby step”!

Foreclosure defense advocates are hailing the California Supreme Court’s decision NOT to depublish the Glaski v. Bank of America, N.A. case.   Once the decision (significant in its own right) was published (July 31, 2013), the foreclosure mills set about to upend it before the California Supreme Court in a major letter writing campaign.  The major banks and their trust counterparties certainly couldn’t have another “nail in the coffin” driven into their game plan to screw American homeowners now, could they?  They failed when yesterday’s decision to depublish Glaski was denied.   For those of you just now getting your head around this decision, here’s the sum and substance of it:

“Here, the specific defect alleged is that the attempted transfers were made after the closing date of the securitized trust holding the pooled mortgages and therefore the transfers were ineffective.

We conclude that a borrower may challenge the securitized trust’s chain of ownership by alleging the attempts to transfer the deed of trust to the securitized trust (which was formed under the trust instrument are void under New York trust law (New York Estates & Trusts Section 7-2.4) and borrowers have standing to challenge void assignments of their loans even though they are not a party to, or a third party beneficiary of, the assignment agreement. We therefore reverse the judgment of dismissal and remand for further proceedings.”

In line with that thinking, U. S. Bank Global Corporate Trust Services published a four-page piece entitled, “Role of the Corporate Trustee”, wherein the following section (on Page 4 of 4) was noted under the heading, “Parties to a Mortgage Backed Securities Transaction”:

The person or entity responsible for the mortgage note and making
principal and interest payments in accordance with the underlying
mortgage documents.

Courts in other states are not seeing this the same way California courts do.

The U.S. Fifth Circuit Court of Appeals for example, isn’t letting homeowners in Texas, Louisiana and Mississippi get to “square one” when it comes to challenging assignments.  I believe that this is largely due to the thinking that “the banks can do no wrong”.  I would surmise that the judiciary in New Orleans has bought into the misconception that if the trust fails, their retirement investments will go right out the window (that is, if any investments they have are parked in one of these trust vehicles).  This is typical behavior of conservatism. Again, I say, how stupid is it to invest in something so volatile?   Check your investments folks!

Much of these beliefs is due to fearmongering by bank attorneys that if the mortgage-backed securities “go South” the judges and others who invested in RMBS will be left penniless and that the banks would fail.  Many judges actually buy into this crap.  The banks made over $53-trillion in side bets called Credit Default Swaps, remember?  Then they were bailed out by the American taxpayer!  Many of these trust pools suffered losses, but many tranches were paid off.  It is estimated that 99.9% (or better) of all of the loans never made the trust pools anyway, based on what investor lawsuits are saying!  This would appear to indicate that all the trusts have in them are empty loan numbers with no backing, based on Glaski!

The Borrower’s Signature

I find it odd that most courts overlook the simple fact that in order for the trust to even consider getting the borrower’s loan allegedly transferred into a trust pool, the borrower would have to sign the promissory note.  This is like writing a check, promising to pay some party at some point in time in the future when they decide to negotiate the instrument.  When you fill out the front of the check, you sign it, right?  Without your signature, you have a check with no “maker” on it.  Sure, the check may have all of the pertinent details, but without a signature, you can’t negotiate the instrument.  Thus, it would stand to reason that in order to negotiate the instrument once it’s signed on the front, whoever is negotiating the instrument must then now sign the back of the check when cashing it.

This is how a mortgage promissory note must also work!

When the borrower went to the closing table, he was presented with a note and security instrument (mortgage or deed of trust) to sign.  The security instrument represents the collateral promised as security for the note in case the borrower failed to make his payments.  The lender (who is named on the note and the security instrument) then gets to record their interest and thus, is in possession of a signed promissory note, which is what the Lender will foreclose on if the borrower defaults.   Many borrowers think that the Lender is foreclosing on the mortgage or deed of trust but that is not true!  The Lender is foreclosing on the note because the security instrument FOLLOWS THE NOTE, not the other way around!

Thus, the note is what is securitized, allegedly.  In Glaski, which is still an ongoing case, California’s Fifth Appellate District (where this appellate ruling is now binding as mandatory, while in other districts it is persuasive) reversed the lower court’s decision (against the homeowner) and sent the matter back to the lower court for continuation of the trial.  This is one step closer to Central California homeowners’ successful challenges but when you compare it to the “screw job” other American homeowners are getting, this is a baby step.  Still, other districts in the State can consider the case.  Once it’s been fully adjudicated, there might be an appeal; however, based on the current climate with the decision by the California Supreme Court, the Fifth Appellate District may stick to its guns and toss the appeal out.

The one thing this tells the author here is that the State Supreme Courts are more likely (than not) to back their appellate back panels.  The more of these types of published cases there are, the more nails that are driven into the bank’s arguments that the borrowers have nothing to do with the securitization or assignment of their loans.

Pencil in a reminder for March 3, 2014 … this is the date when MERSCORP has to amend its pleadings in the MERS v. ROBINSON case in California, or get its case dismissed with prejudice!  See my blog post on that!   Hey MERS … yeah, I’m watching you … just like you’re watching me!


Filed under Breaking News, Financial Education