The Illusion

Dud? Joined: 13 Jul 2010 Posts: 2 Location: Texas

Banking has done a great job of keeping this issue under raps.
Most bank empoyees don't know it.
Most lawyers don't know it.
Since 2000, we have had an invasion on U.S. Soil.
It was called the eSign Act, and UETA.
For ten years now, Americans have been under the guise of a perfectly good mortgage system. Or that was the thought.
What everyone did not realize, was the fact that Electroic Promissory Notes were illegal. Yes, illegal.
They have no supporting law. Fact.
Check 15 USC 7003, eSign. It excludes negotiable instruments.
15 USC 7001 was the illusion. Most thought that "Transferrable Records", took care of the negotiable instrument. But it does not. They are excluded from eSign. Article 3, does not provide support for electronic negotiable instruments.
Revised Article 9, provides that security interest in a negotiable promissory note may be perfected by filing. Article 9 deals with paper, not electronic.
For 10 years now, mortgages have been forgiven, but the banks forgot to tell the homeowner.
This is a very interesting topic.

Dud? Joined: 10 Mar 2011 Posts: 1

You are right, most lawyers don't know this because it isn't an accurate statement of the law. First, Article 3 does not contemplate electronic signatures, but they are allowed on the state level, under the governing provisions of 15 USC 7001, so long as the state adopts the Uniform Electronic Transactions Act. All of the provisions governing the transfer of negotiable instruments in an electronic fashion are contained there. Only three states (NY, Washington, and Illinois) have not adopted this act, although they have their own electronic signature statute.

And, since the Uniform Electric Transactions Act not only allows electronic signatures but actually provides for the means to transfer paper negotiable instruments electronically, with the transferee still being able to claim holder in due course status, this paper/electronic record argument is moot. There are no issues with electronic signature law, and no one has ever had a mortgage forgiven on this basis.

Dud? Joined: 22 Sep 2011 Posts: 6 Location: USA

Er, Hank, you are incorrect, I have counted 37 to date in 2011 kust in NY.