Posted by & filed under Stockton Real Estate.

By Mandelman


A few days ago, I received an email containing a link to a post on the blog, Deadly Clear. It posed the question, “Is the Promissory Note Even Enforceable?” Considering we’ve lost over six million homes to foreclosure, it would seem an easy question to answer… yes. But, since this post was apparently being circulated, I felt compelled to take a look.

I’ve pretty much had enough with the misinformation that gets circulated… just because someone has an idea, doesn’t mean it should be sent around, citing cases and various laws, as if the idea has been validated. Homeowners read these sorts of things and too often end up believing things that simply aren’t true.

So, now I find Deadly Clear’s post, which says that one can claim a promissory note unenforceable based on the Uniform Electronic Transaction Act (“UETA”), which has to do with electronic notes. And one sentence from Deadly’s post caught my eye immediately: “The hard core fact here is that in order to securitize the loan documents – they need to be electronically transferable.”

Nope, there was no chance that sentence was true. Securitization has been around a lot longer than UETA (1999) and the E-Sign Act (2000), so there’s no way that in order to securitize loans, anything had to be electronically anything.

The post also claimed that the transfer of electronic notes was somehow under the purview of Article 8 of the UCC. Not Article 3 or Article 9? I hated having to learn about the UCC in the first place… so the last thing I wanted to do was look up Article 8.

Instead, I decided to call a few UCC experts to get their take on the Deadly Clear post. One of those calls was to attorney Tom Cox, from Portland, Maine, because not only is Tom expert in the UCC, as it pertains to promissory notes, but he’s also one of the most respected foreclosure defense lawyers in the entire country.

It only took Tom a few minutes to understand what I was talking about and he offered to take a look at the post, so I sent him the link and awaited his return call… which came quickly. He explained that the post was wrong… about essentially everything, as it pertained to foreclosure. As I was listening to him explain the issues, I was getting a …read more

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