Uniform Commercial Code, UCC – The Note, The Transferee and the Wardrobe

“The Florida Uniform Commercial Code speaks of the transferable right of enforcement of the secured obligation, commonly referred to as the “promissory note”. Generally, the right of en-forcement of the promissory note is transferable only by delivery of the instrument itself to the transferee.

The key issue is transfer. Defense counsel must identify the circumstances surrounding the transfer of the Note. This is important in instances where evidence exists that the note has been transferred such as when a Trust is suing, or in instances where evidence is not readily apparent that the note has been transferred.”


6 Responses to “Uniform Commercial Code, UCC – The Note, The Transferee and the Wardrobe”
  1. john says:

    Perhaps I have been misinformed, but I thought the lenders could deposit the Note into a transaction account (with your name on it) then through the policies of the Federal Reserve, ‘fractionalize’ the value of the note up to nine times its original value. Obviously, if it is true, the borrower is funding his own note through this process, and giving the lender a huge amount of ‘money’ to invest as well.


    I lost my home in Broward County, Fla. in December 2007. The foreclosure mill handling the case never produced the original note or an assignment of mortgage. The final judgment was paid off by a foreclosure rescue scammer. Do I have a cause of action against the bank? Can you help me I am indigent?

  3. Luigi says:

    UCC rules is that a Promissory Note is a transferable instrument . .

    Mortgage Promissory Notes are different from the regular promissory note…. that business people transfer all the

    time . to be a negotiable instrument , the amount of the note has to be a exact amount ,for example a $1,000.00 note is still worth $1,000.00 lets say 5 yrs. later …when you cash it in. Plus interest if you include it in the deal ..

    Now a Mortgage Promissory Note is ( if paid regularly by the home owner ) … amortizing every day . ( reducing in balance as monthly payments are made )

    For example a new mortgage note has a balance of $140,000.00 today . The new house has a value
    approx.around that amount .

    5 years later that Mortgage Promissory note will have a different amount in balance . The note was valued for the $140K … but five years later should the note holder want to cash in.on the note .the balance due on the note balance may well be $130,000. ( home owner paid 10K to the mortgage loan in those 5 yrs.)

    So the $140K note lost $10k in cash value in those 5 yrs. and to complicate matter more… If a foreclosure is needed to recover the $140K , but the house fell down in value , lets say to a $ 100,000.FMV .

    The note holder is S.O.L. loss 10 K in the face value of the note ( 140K-130K= $10K ) and in a foreclosure

    situation lost $ 30K ( 130K-100K= 30K ) . And what about the legal fees ( 15K ), and all the other expenses included in the foreclosure.

    The poor guy who purchased or exchanged a mortgage promissory note for $140K ,and five years later , the note is

    only worth $85K ( -15K =legal fees )

    I rest my case : A mortgage Promissory Note can’t be a Negotiable Instrument when the final value cash amount is so volatile and ever changing . It can be an investment instrument , the cost of buying a note will not be the same amount when you cash in the Note.

    Luigie Pro Se

    • 3rd born says:

      Response to Luigi re Prom.Note: One does not “cash in” a Promissory Note on a Mortgage. A Promissory Note for a Mortgage is executed TOGETHER WITH a Mortgage Deed that contains all the rights and duties of both parties–including payment terms. Yes, the Note may seem to reduce in value but it truly does not because the holder has been receiving payments that include an amount toward that note amount AND the interest on the principal–HIS/THEIR profit–and those are paid in TODAY’s money–not like the notes you referred to that are made today at $10,000 but collected on in 5 years when $10,000 may actually be equivalent to $8.500 in its buying power. Though I admit that that happens somewhat with Mtge Notes.

      Mortgage Deeds include all the remedies for the “loss” situations you described, including confiscation of insurance proceeds and deficiency judgments for all the expenses after a foreclosure sale loss. THAT IS WHY THE MORTGAGE NOTE AND THE MORTGAGE DEED ARE NOT TO BE SEPARATED. A Lender sues on the Note in a court, and if it prevails, that gives him the right to take the Note’s collateral if he then also has the Mtge Deed– ownership of the actual property through the Sheriff. So, what good is a Note to anyone without the Mortgage Deed? And what good is a Mortgage Deed to anyone without the Note, which is the promise to pay?

      Sorry to be so simple here. Just gettin back to the basics. Notes may be transferable, but they are not much good without the collateral contract

  4. AWESOME! What’s the part about borrower receiving any SURPLUS funds in their acct… is that UCC 9?

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