Two days ago I wrote the post “Is There Even A Note Holder To Pay?” Shelley Erickson then posted on Facebook a very similar article from two years ago written by the Minnesota judiciary’s favorite whipping boy, Bill Butler. The entertaining and extremely informative article says this:
“Virtually all 62 million securitized notes define the “Noteholder” as “anyone who takes this Note by transfer and who is entitled to receive payment under this Note…” Very few of the holders of securitized mortgages can establish that they both hold (have physical possession of) the note AND are entitled to receive payments on the notes. For whatever reason, if a Bailout Bank has possession of an original note, it is usually endorsed payable to the order of some other (often bankrupt) entity.”
So the idea that there there are no “note holders” of millions of notes is not some crackpot idea, it’s obviously a legitimate point. It’s almost unbelievable that the banking industry could screw up something as simple as being entitled to receive payments while simultaneously holding the note, but that’s the way things actually are. And it has been that way for some time, as Butler recounts his victory in what he describes as “perhaps the first securitized mortgage lawsuit ever in the country“:
“In short, IMS [the Defendant], as the “record owner” of the mortgages without any provable connection to the underlying notes, had nothing. FNBER [the Plaintiff and Butler’s client], on the other hand, had promissory notes payable to the order of FNBER but did not have “record title” to the mortgages. FNBER was the winner because its possession of and entitlement to enforce the notes made it the “legal owner” of the mortgages.“
Butler and his argument
“[Schiltz] called Butler’s arguments ‘evasive and often absurd,’ said [Butler] misrepresents the facts with ‘constantly shifting and contradictory arguments.'”
Schiltz’s complaints about Butler are actually a perfect description of the tactics of the banks. Essentially what the courts in Minnesota have done is projected the absurdity of the banks’ arguments onto Butler, and turned the whole mess around on Butler, making it seem as though Butler is the crazy one who won’t let things go.
And then people who claim to be on the side of homeowners–like Martin Andelman–pile on, despite Butler clearly being in the right, according to the terms of the note itself. “Butler has lost every case on so-called ‘show me the note,'” people say. “It’s clear that’s not going to work.”
Well, that may be true, but that’s not the point. The point is that it should work. There is no note holder to pay. Or in the words of the Matrix, “there is no spoon.”
Is the Note important or isn’t it?
And that’s what it comes down to–are courts going to enforce what the note actually says (i.e., that the only person a borrower owes money is the person who meets both of two criteria: right to payment and taking of the note by transfer), or are they going to enforce the conventional wisdom (i.e, that the borrower signed a note and a bank pops up and says that borrower owes them but the bank doesn’t meet the note’s requirements), which is nowhere to be found within the four corners of the note. Unfortunately, courts have been ruling in favor of the latter rather than the former. They’ve been taking the banks’ word for it.
Judges are essentially telling homeowners: “You signed this note, and therefore I’m not going to bother with determining whether the person who now says you owe them actually meets the definition of ‘note holder’ within the four corners of the note. All I care about is that you don’t get a free house and that the banking system’s debt slavery is able to continue unabated.” In other words, it doesn’t matter what the note actually says, it only matters that someone who could fog a mirror signed it at some point and the courts will say that mirror-fogger is on the hook no matter what the bank does or doesn’t do.
IMPORTANT NOTE/DISCLAIMER: The above article is not legal advice and was not written by an attorney. It is merely a collection of common-sense, rational observations written by a sane, rational layperson with common sense. It is recommended that you consult with an attorney for any and all legal advice and/or action.