Foreclosure Defense – Use the UCC

Something interesting  I came across… Thoughts???

“In light of the fact that virtually all promissory notes taken by banks, mortgage companies, etc., were sold at some time after the “closing” for the respective transactions — without the right in discovery to physically inspect, and photocopy the original wet-ink instrument, (production of the original instrument), meaning that the bank, mortgage company, etc., retained physical possession of the NOTE, standing in court to enforce the instrument in foreclosure is impossible pursuant to the Uniform Commercial Code. (UCC).

This is the law behind — “Show Me the Note!”

Statutory Requirements For Establishing The Right To Enforce An Instrument

1. Prove status of holder of the instrument. (UCC § 3-301(i)); or

2. Prove status of non-holder in possession of the instrument who has the rights of a holder. (UCC § 3-301(ii)); or

3. Prove status of being entitled to enforce the instrument as a person not in possession of the instrument pursuant to UCC § 3-309 or UCC § 3-418(d). (NOTE is lost, stolen, destroyed).

UCC § 3-309, requirements.

a. Prove possession of the instrument and entitled to enforce it when loss of possession occurred. (UCC § 3-309(a)(1)).

i. If illegality or fraud were involved in the original transaction, it cannot be proved that the person is entitled to enforce the instrument.(See UCC § 3-305. DEFENSES)

b. Prove non-possession of the NOTE is NOT the result of a transfer. (UCC § 3-309(a)(2)).

NOTE: If discovery shows that the instrument was sold by the person claiming the right to enforcement, a transfer occurred, and such person is NOT entitled to enforce the instrument. (See UCC § 3-309(a)(ii)).

c. Prove that the person seeking enforcement cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process. (UCC § 3-309(a)(3)).

NOTE: If discovery shows that the instrument was sold by the person claiming the right to enforcement, a transfer occurred, and such person is NOT entitled to enforce the instrument. (See UCC § 3-309(a)(ii)).

d. A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. (UCC § 3-309(b)).


UCC § 3-309 Enforcement Of Lost, Destroyed, Or Stolen Instrument.

(a) A person not in possession of an instrument is entitled to enforce the instrument if

(1) the person seeking to enforce the instrument

(A) was entitled to enforce the instrument when loss of possession occurred, or

(B) has directly or indirectly acquired ownership of the instrument from a person who was entitled to enforce the instrument when loss of possession occurred;

(2) the loss of possession was NOT the result of a transfer by the person or a lawful seizure; and

(3) the person cannot reasonably obtain possession of the instrument because the instrument was destroyed, its whereabouts cannot be determined, or it is in the wrongful possession of an unknown person or a person that cannot be found or is not amenable to service of process.

(b) A person seeking enforcement of an instrument under subsection (a) must prove the terms of the instrument and the person’s right to enforce the instrument. If that proof is made, Section 3-308 applies to the case as if the person seeking enforcement had produced the instrument. The court may not enter judgment in favor of the person seeking enforcement unless it finds that the person required to pay the instrument is adequately protected against loss that might occur by reason of a claim by another person to enforce the instrument. Adequate protection may be provided by any reasonable means.


An instrument is transferred when it is delivered by a person other than its issuer for the purpose of giving to the person receiving delivery the right to enforce the instrument. (UCC § 3-203(a)).

If a transferor purports to transfer less than the entire instrument, negotiation of the instrument does not occur. The transferee obtains no rights under this Article and has only the rights of a partial assignee. (UCC 3-203(d)).


If the bank, mortgage company, etc., sold the NOTE, they have no right to enforce the NOTE, through foreclosure or court proceeding pursuant to the fact that the UCC bars such claimant from invoking the court’s subject matter jurisdiction of the case.


Even if the claimant produces the original wet-ink NOTE, there is a defense to the action pursuant to UCC 3-305.

Illegality and false representation (fraud) perpetrated in the transaction. Did the bank disclose the SOURCE of the money for the transaction?

Did the bank inform the NOTE issuer that the money for the transaction was provided at no cost to the bank?

Did the bank disclose that the NOTE would be sold at the earliest possible convenience, and that such sale and receipt of money from a third party would actually pay off the NOTE? (Satisfaction of Mortgage).
Many discovery questions to be asked when a claimant initiates foreclosure proceedings.


Many assume that the bank/broker/lender that begins the process is actually providing the money for making a “loan,” when in fact, the bank/broker/lender is only making an “exchange,“ of notes, at no cost, and then, coercing the issuer of the promissory note into the comprehension that he is receiving a “loan.”


“In the first place, one of the major functions of the private commercial banks is to create money. A large portion of bank profits come from the fact that the banks do create money. And, as we have pointed out, banks create money without cost to themselves, in the process of lending or investing in securities such as Government bonds.”

In this instance, the transaction was funded by using the prospective property (collateral) and the signer’s promissory note as if the property and the Note already belonged to the bank/broker/lender.

So, if the bank used the promissory NOTE, as money, to create the cash reserve which was then used to validate the bank check issued on the face amount of the promissory NOTE, at no cost to the bank, without NOTICE to the signer of the promissory NOTE, and without fully disclosing these facts and aspects of the transaction, the bank committed a DECEPTIVE PRACTICE, FRAUD.”


I am not an attorney and this is not legal advise…

8 Responses to “Foreclosure Defense – Use the UCC”
  1. You’re touching on some important laws, but you’re missing the point with some of them, and missing things that need to be proven when using those laws. More is usually required than what the laws says.

    For instance 3-301(iii) is usually “proven” by affidavit. They don’t get too detailed and try to say the minimum to hopefully trick you into believing they’re legally good to go, when they aren’t. You can’t just accept them saying: I lost the note, can’t find it now, and here is a copy I made before losing it, so I’m good to go. What are the things that need to be included in the affidavit to prove they have the right to foreclose? Did the affidavit show they actually held the note and bought it from someone who had full rights to foreclose and consequently had those rights at the time they lost it and now? I can produce a copy of the Note and claim I have the right to foreclose. I can claim I didn’t find a caddie in my driveway even though I don’t own one.

    And what kind of assurance should the court require to make sure you don’t have to pay twice? Maybe a bond or indemnity agreement?

    Plus I don’t think anyone is going to prove the funding angle that you’re mentioning at the end of the article in a court. You’re going to need a lot better and more specific proof to show your loan was funded in X manner and that it’s fraud. You said: “Did the bank disclose the SOURCE of the money for the transaction?” What law requires that, and does it really matter? And is that going to stop a foreclosure or give you your house?

    And you should touch on the fact that 2 rights (ownership & enforcement) are passed on with every note. What does it take to have those rights? Are you dealing with a party who has enforcement rights or ownership rights? Ownership rights are determined by Article 9 and enforcement rights are determined by Article 3 of the UCC. 2 parties can have each of those rights, or 1 party can have both of them. So who are you really fighting against? A party with one right or with both rights? Are you dealing with someone who only has ownership rights when they’re trying to enforce? That’s not going to fly if you know how to prove it. They aren’t even a party of interest. These are important things to know. So dive in deeper and show others how to do these things. That’s what is going to stop these crooks. The UCC is a great tool to add to you ammo box, but if you don’t know how to fully use it, you can wind up shooting yourself in the foot.

  2. Hi All,

    Interestingly, last week ORLANS MORAN representing Freddie Mac, served me a summons and complaint where they are bringing me into Superior Court (RI) requesting relief in the form of removals of various liens on my property after having foreclosed on the property in 2012.

    The other co-defendants are the IRS and Dept of Revenue in RI who have placed Income Tax Liens on the subject property.

    They are also asking relief from UCC filings that I made as well as a Federal Common Law Lien that I placed on the property.

    There are just an abundance of questions on the way the entire foreclosure took place.

    Here is a chronological order of what happened:

    1998-08-03 Warranty Deed on File at Tiverton Town Clerks Office

    2006-08-02 Original Loan Application August 2, 2006

    2006-08-02 Mortgage [Deed of Trust] August 02, 2006 [ Recorded on 8/17/2006 with Town of Tiverton-Town Clerk]

    2006-08-02 ORIGINAL Note with USAA Federal Savings Bank August 02, 2006, unRecorded

    2006-08-02 Note with USAA Federal Savings Bank August 02, 2006

    2010-08-15 Forensic Exam by Charles Horner & Associates August 15, 2010

    2010-11-09 Notice of Default and Right To Foreclose

    2011-01-06 Letter from ORLANS MORAN

    2011-01-06 MERS Assignment to U.S. Bank

    2011-01-26 Notice of Intention to Foreclose from ORLANS MORAN

    2011-01-26 Various Listings from MERS Website on subject property

    2011-02-03 NOTICE sent back to ORLANS MORAN

    2011-02-09 Letter from Rhode Island Secretary of State certifying that Mortgage Electronic Registrations Systems, Inc. (MERS) is not registered to do business in the State of Rhode Island.

    2011-03-15 DECLARATION of the Signature Revocation that I filed in Tiverton Town Clerk’s Office

    2011-03-22 Town Auction Company LLC Summary from Secretary of State (RI)

    2011-05-12 Copy of Foreclosure Auction Agreement Exhibit E

    2011-05-12 Copy of Mortgage (Exh B) submitted by Attorney John T Precobb of Orlans Moran in Doc. No. 3 in Federal Case with omissions and alterations to the document.

    2011-05-12 Copy of Original Note Submitted by Atty John T. Precobb in Federal Court Exhibit C.pdf

    2011-05-12 Declaration under Penalty of Perjury – Approved Loan Amount Never Received.

    2011-07-01 Complaint Form sent to the Comptroller of the Currency in Washington, DC

    2011-07-08 Copy of Mortgage received from Rebecca Hayes of US Bank (Contains DMO3.11212006 17:43 1806-1821 numbers on left hand edge. Rebecca said that this was a scanning number assigned to the document after their office received it and then it was shredded)

    2011-07-08 Copy of Note received from Rebecca Hayes at US Bank – Not the same as the one on file at Tiverton Town Clerks Office in Tiverton, RI

    2011-07-12 Email Correspondence with Rebecca Hayes of US Bank, N.A. Rebecca stated that loan was taken out Aug 2nd, 2006 and it became a FreddieMac on October 1srt, 2006.

    2011-07-13 Affidavit of Facts & Conclusions Concerning Note and Loan – Exhibit M.pdf

    2011-07-14 Certificate of Charter from U.S. Bank National Association

    2011-10-13 Proof of Mailings sent on Acceptance of Quit(Quick) Claim Deed Part 1 Part 2

    2011-10-25 Quit(Quick) Claim Deed and Acceptance of the Quit(Quick) Claim Deed

    2011-08-05 UCC Filings-SPC UCC1, UCC1ad, Affidavit of Copyright Notice, Affidavit of Acknowledgment, Affidavit of Truth of the Revocation of Signatures and Powers of Attorney of Previously Filed W-4 Forms, I.RS. 1040 Forms and State Income Tax Forms, Affidavit of Judicial Notice, Affidavit of Security Agreement, Birth Certificate, Certificate of Title 2008 Honda Pilot

    2011-08-05 UCC 3 Amendment, Transmitting Utility, with list of Collateral

    2012-08-17 Notice of Demand to USAA, US Bank and Freddie Mac Exhibit G.pdf

    2011-08-21 Acknowledgement – Notice of Federal Common Law Lien. Filed with Tiverton Town Clerk. Common Law Lien on 80 Wampanog Lane, Tiverton, RI 02878

    2012-08-29 Notice of Claim US Bank Exhibit H.pdf

    2011-10-25 Acceptance of the Quick-Claim Deed Exhibit F.pdf

    2012-10-11 Notice of Claim filed in the public record with the Tiverton Town Clerks Office in Tiverton, Rhode Island.

    2012-11-09 Foreclosure Deed, U.S. Bank, N.A. listed as holder of mortgage assigned to Freddie Mac.

    2013-11-04 Declaration Under Penalty of Perjury – Bona Fide Owner, Executer and Issuer of the Note Exhibit L.pdf


    Needless to say, I am looking for anyone to collaborate on with my situation.

    I have about 10 days before having to file a response to the summons.

    What is interesting, is that they (ORLANS MORAN) is bringing the suit under RI GL 8-2-13 & 14 which have to do with equity.

    Now, I am slightly versed in equity, having poured through Gibsons Treatise on Suits in Chancery.

    I believe I have a defense with regards to either a 1) UCC Defense or 2) An Equity Defense.

    I am a Secured Party Creditor and have filed various UCC Filings. I also have my Certificate Of Birth authenticated all the way up to John Kerry’s office proving ownership of the name.

    They (Orlans Moran) a foreclosure mill attorney representing Freddie Mac are clearly not a “party of interest” in this matter and may very well be tresspassing on both me and my household property.

    I have been to numerous RI District Court Hearings, a Federal Court hearing and a RI Superior Court Hearing at various times over the last few years, yet remain in possession of my property.

    Orlans Moran has tried various times as well as other law firms to try to have me evicted, however, they have never made any attempt with law enforcement officials to have me removed.

    This site is great for information provided and I am studying this post here with earnest in my attempt to formulate a game plan for my defense.

    If anyone is available to review my situation and assist it would be greatly appreciated or suggest which defense method that I should consider.

    B.S. Tiverton, RI

    • R. says:


      I really hope your situation has been, or is working in your favor. I’m currently in the process of a similar fight. I was wondering… How did you fare with filing a UCC1, UCC 3, and the accompanying docs?



  3. I refinanced with World Savings in 06, or at least I thought that was going to happen.
    Instead my transaction was transferred to another company Omni Financial, then to another company called MortgageIt, then to Homecoming Financial, then to Countrywide Financial.
    The “Truth In Lending Statement was altered on every transfer to show higher interest rates.
    I had a 750 credit score when this all started. I had to file bankruptcy because I couldn’t find a lawyer after getting stiffed by Attorney Joesph Bravo and the United Foreclosure Attorney Network (UFAN) headed by Attorney Kristen Crone.
    UFAN said that I would be a member of a class action group, took $4,000 and I didn’t hear from them until I called them. Krone called me and said that UFAN had to file bankruptcy, this was after stringing me along for a year and a half.
    Read about it on Facebook pages entitled, “Real Estate Crisis or Government Sanctioned Racketeering?”

  4. Ti says:


    here are some of overlooked facts (law):

    the HUD-1 SETTLEMENT STATEMENT (provides proof of SETTLEMENT)
    above your endorsement on the HUD-1 SETTLEMENT STATEMENT is:

    I have carefully reviewed the HUD-1 SETTLEMENT STATEMENT and to
    the best of my knowledge and belief, it is a true and accurate statement
    of all receipts and disbursements MADE ON MY ACCOUNT OR BY ME
    IN THIS TRANSACTION, I further certify that I have received a copy of

    and (below your endorsement we find the SETTLEMENT AGENT’S statement)

    To the best of my knowledge, the HUD-1 SETTLEMENT STATEMENT
    which I have prepared is a true and accurate account of the funds
    which were received and have been or will be disbursed by the undersigned
    as part of the SETTLEMENT of this transaction.

    (“my people are destroyed for lack of knowledge” Hosea ~ 4:6)

    the transaction has been closed and settled


    that being the case the SECRETARY OF HUD has JURISDICTION over the
    TRANSACTION and he is cloaked with the duty of initiating FORECLOSING

    here’s the thing the SECRETARY OF HUD only has JURISDICTION on
    also U.S. citizens, FEDERAL EMPLOYEES and the such.

    this excludes the 50 unity states of the Republic and the sovereigns thereof
    (We the People)

    “may we all come from the darkness into the light”

  5. wisc1026 says:

    This has been a great help to me. I am working on a case of foreclosure & there are a several people & problems involved, this has helped me figure out where to start looking to find the information I need. Thank you for your site.

  6. zurenarrh says:

    I’ve been checking out your site–it’s great!

    I think the last three paragraphs from the article above accurately summarize THE most important thing for people to understand–more important than ANYTHING ELSE in the news.

    It’s amazing that people do not understand the concept that banks don’t “loan” money, they actually create it. And even if they do understand the mechanics of it after you explain it to them, they still don’t believe it, even when you point out to them that the Federal Reserve itself admits that banks create money.

    If only people could get their head around the fact that banks SELL us money (the “loan”) that we GIVE to them (the “promise to pay”), we’d be able to make some real changes in society. I mean, if we’ve had so much economic growth over the last several decades predicated on money that is literally imaginary, why not simply continue that system with one simple change: cut the banks out of the transaction.

    That is to say, since it is the people–individually, not collectively–that actually create the “money,” we ought to just get rid of the middleman, i.e., the banks. So if you want a house and a seller wants you to have that house, just write the seller a check for the amount that he’s asking. You won’t have to worry about “not having the money to pay for it,” because you will have just created the money to pay for it by writing a check. And the seller can in turn do the same for some item he wants, as can everyone else.

    I know that sounds insane and is completely at odds with “how the system is supposed to work,” but it’s exactly how the system has been run up to this point, except that it benefited the banks instead of the people.

    Great site! I’m going to keep reading now…

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