“A thief who steals a check payable to bearer becomes the holder of the check… but does not become the owner of it.”

Below is an order from a Florida court that speaks to a major issue we have been screaming about for well over a year now. Just because you hold the note, does not necessarily make you the owner of the note with the right to enforce.

If the courts would let us get to the documents in discovery, it would show that in the majority of the cases, even if they produce the original note, they do not have the right to enforce.

For example…

BofA Mortgage Morass Deepens on Promissory Notes Issues

Investor Impact

The Kemp case is also being examined by lawyers for investors in mortgage-backed securities. Owners of the bonds have been cooperating in an effort to force sellers to take back loans, saying they were misled about their quality. The Wizmur ruling may give investors an additional opportunity to push for mortgage buybacks on grounds that the bonds weren’t created in keeping with securitization contracts.

“It may mean investors who think they bought mortgage- backed securities bought securities that aren’t backed by anything,” said Kurt Eggert, a professor at Chapman University School of Law in Orange, California.

Countrywide Deals

The securitization contracts related to the Kemp loan, and at least two other Countrywide mortgage-bond transactions, didn’t assign the company the additional role of document custodian for the trust. Countrywide, as the servicer, can take back the notes from the trustee when needed to manage foreclosure actions and mortgage payoffs, according to the contracts.

One risk to investors when notes remain with sellers acting as custodian is that an acquirer or creditor of those companies could walk in and take the notes, the banks that disclosed the practice in mortgage-bond prospectuses warned.

Let’s repeat. “An acquirer or creditor of those companies could walk in and take the notes.”

Now in how many instances can this have happened in the last 4 years in where an institution that held onto the notes has been acquired or taken over by a “creditor”?

I ran out of fingers to count on…

One example that comes to mind with somewhat of a twist is the JPMorgan FDIC WAMU deal…

Did you all know as of August 31st 2010 that deal was not finalized and it still may be pending?

Washington Mutual JPMorgan Chase FDIC Deal NOT Finalized? So how can JPMorgan Foreclose on WAMU Loans?

Posted by Foreclosure Fraud on August 17, 2010 ·

This is very intriguing… Check out the the excerpts from the report below…

Game Changer?

WaMu sale hasn’t closed, document suggests

Next month will mark two years since federal regulators seized Washington Mutual and sold it to JPMorgan Chase for $1.9 billion. Now a document that appears to be from the Federal Deposit Insurance Corporation suggests the deal still hasn’t closed.

“Everyone is saying the sale is finalized,” said the shareholder, Farokh Lam, of Woburn, Mass. “It is not.

Lam noticed that on pages 7 and 9, the original WaMu purchase and sale agreement allows the FDIC to extend the settlement date. He says he asked about it, and the FDIC confirmed in phone calls and emails that the settlement date was set for Aug. 30, 2010, and could be extended further.

“Settlement Date” means the first Business Day immediately prior to the day which is one hundred eighty (180) days after Ban Closing, or such other date prior thereto as may be agreed upon by the Receiver and the Assuming Bank. The Receiver, in its discretion, may extend the Settlement Date.

It says: “The purpose of this amendment is to extend the time period for Final Settlement to August. 30, 2010.”

WaMu’s final days were chronicled in depth by Puget Sound Business Journal Staff Writer Kirsten Grind in an award-winning series.

Does this mean that all the WAMU foreclosures being pushed through the courts by JPMorgan Chase using the FDIC Purchase and Sale Agreement are invalid?

Does it mean if they haven’t closed the deal THEY DO NOT OWN THE LOANS OR THEIR SERVICING RIGHTS?

Where are the windfall profits going after the foreclosure sale?

What if the agreement changes before it is finalized?

So many questions…

The JPMorgan Wamu FDIC Settlement Date Extension Document Can be Viewed Here…

Regardless of the closing of the deal above, the question still remains if a holder of a note endorsed in blank actually has the authority to enforce it without other “evidence” other than the fact that the posses the note.

For example, if the not had to be transferred by courier to be delivered to another location for whatever reason, and the courier decided to keep the note, should he be able to enforce it?

I would think not. (Unless it was in a Florida rocket Docket)

It is no different than the foreclosing entity showing up with it without the proper chain of title and endorsements…

And that is why this order from the Honorable Judge Tepper was handed down in the case below.

An order, in my opinion, that can not be cured by BAC and their attorneys, but only time will tell…

BAC, Countrywide v Stenz Motion to Dismiss Granted – “A thief who steals a check payable to bearer becomes the holder of the check… but does not become the owner of it.”


CASE NO 51-2009-CA-7656-ES

From the Order…

The copy of the note filed by plaintiff shows upon it that it has been endorsed in blank. Thus, though Plaintiff may be a “holder” it is not by virtue of such an open indorsement, an owner of it. See F.S. 673.2031, Comment 1: “a thief who steals a check payable to bearer becomes the holder of the check… but does not become the owner of it.”


A: Defendant’s motion to dismiss is GRANTED.

B: Plaintiff shall be granted 30 days to amend its complaint and in doing so MUST:

  • Allege ultimate facts, not conclusions of law, that specifically set forth the and identify the present owner of the note and mortgage and the present holder of the note and mortgage and in so doing deraign the chain of ownership/holdership since the loan’s inception.
  • Allege ultimate facts why the note is indorsed in blank and specifically deny, if that be the case, that it or an interest has been pledged to another…
  • Plaintiff must specifically plead and identify both the owner and the holder of the note and mortgage. it is not enough for Plaintiff to only plead that it holds the note and mortgage… Plaintiff must ultimately prove ownership as well…
  • If Plaintiff is not the owner it must specifically plead ultimate facts identifying the owner and Plaintiff’s authority whether to act as a representative for the same attaching such proof of said representation authority whether it be by power of attorney or other written agency agreement.
  • Allege and identify all documents, by attachment, upon which plaintiff relies to establish the ownership of the note and mortgage.
  • Plaintiff shall have 30 days to amended and file a new complaint. That said complaint must be verified and that any allegation in the verification containing “best knowledge and belief” language is insufficient.


Lynn Tepper

Good luck on all that BAC!


“A thief who steals a check payable to bearer becomes the holder of the check… but does not become the owner of it.”

Full order below…



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Thursday December 9th 2010 in West Palm Beach FL

BAC, Countrywide v Stenz