"Pay to the order of" does not satisfy note

Hi all,

I really need some help here. I am in a chapter 13 bankruptcy, The lender did not provide a copy of the note until Thursday May, 19th at my confirmation hearing. The Trust deed they provided originaly was also defective. So "NO PROOF".

At the confirmation hearing, at which there was also a motion for relief of automatic stay, the Bank provided the original Note, and Trust Deed, as well as the Notary that witnessed and signed the original note and trust deed.

On the back of the third page of the note was a stamp "Pay to the Order of North American Lending" I noted this stamp and argued that it discharged the debt, I also argued that the note had been abrogated without my knowledge or consent. I was overruled on both allegations.

I need help appealing this so I am asking for all of you to help and share your knowledge and what laws and arguments work in this situation.

Dave

[J.W.]

If one is a legitimate holder of an original note or other instrument then he or she can indorse or transfer an instrument without notification to the maker of the original instrument. The maker of an instrument "promissory note" is liable under the pledge of payment irrespective of who the holder is unless of course the holder is not legitimate and obtained possession of the instrument by way of fraud, theft etc.

The issue matters not who the purported holder of your note is. The question or issue to bring forth is: who provided the initial capital that funded the alleged loan or line of credit? If you do not know the answer to this question please indicate such and I shall clarify this later.

[dashboy]

Definitely go on Jason!

I realize that the source of the funds was the sale of the note which means that I provided the funds that they gave me. My question is "How do I prove it and have the debt dismissed?"

Thanks for your help

Dave

[J.W.]

Davemcp:

You are almost correct in your thinking. You see, the promissory note you executed under the purported mortgage agreement (or any other loan for that matter) constitutes M1 money. There are basically four different types of money M1, M2, M3 and L. I would suggest that everyone get acquainted with these different types of money. The money issue is simple really, you provided the initial capital that funded the purported loan in question. First off, there is no money other than what we create by and through pledging i.e. contracts.

The purported lendor accepted you note M1 as a credit and pursuant to the bookkeeping entries the loan or account better said, has been satisfied thus negating the need of any instrument for discharge. The accounting is rather mundane with respect to how this issue plays out however there are a number of sources available which confirm this fact. Tom Schauf was one of the first to bring this issue to the forefront another gentleman is Todd-Ellis: Swanson and of course the illustrious Walker Todd.

Here are a few points to reflect on:

Federal Reserve Bank of Chicago’s publication - Modern Money Mechanics, Page 6:

"Of course, they (the banks) do not really pay out loans from the money they receive as deposits. If they did this, no additional money would be created. What they do when they make loans is to accept promissory notes in exchange for credits to the borrower's transaction accounts."

Account Ledger:

DEBT COLLECTOR accepted John Doe's signed promise to pay, receipts, notes or other similar instruments as bank money, creating and issuing new credits to John Doe's account that resulted in a bank liability (money owed to John Doe).

Payments to merchants and other financial institutions:

DEBT COLLECTOR used John Doe's new credits to pay merchants or other financial institutions for charges to the account.

Monthly Statements:

DEBT COLLECTOR failed to enter the new credits on John Doe's monthly statements.

Additional Payments:

DEBT COLLECTOR received additional payments, interest and other finance fees, which should have been posted as additional credits to the account, resulting in a bank liability.

Now as far is your proving your claim so to speak, you can bring forth a billing error dispute pursuant to Title 15 U.S.C. 1692 et. seq. and there are additional inquires that you can bring forth under RESPA, Privacy Act and more. The controlling law with regard to mortgages is Title 5, Title 12, Title 15.

If you bring forth the billing error dispute and exhaust your administrative remedies under Federal Law you can bring forth a claim in federal court under the doctrines of Res Judicata and Collateral Estoppel. Dealing with mortgages is no easy project though an my opinion is that you will most likely need to learn how to litigate at the federal level before you will be able to have success.

I can get into this further at a later time, for now I have a long day ahead.

Hope this gets you thinking...

J

[dashboy]

http://www.federalreserve.gov/releases/h6/Current/

M1
1. Consists of (1) currency outside the U.S. Treasury, Federal Reserve Banks, and the vaults of depository institutions; (2) travelers checks of nonbank issuers; (3) demand deposits at all commercial banks other than those due to depository institutions, the U.S. government, and foreign banks and official institutions, less cash items in the process of collection and Federal Reserve float; and (4) other checkable deposits (OCDs), consisting of negotiable order of withdrawal (NOW) and automatic transfer service (ATS) accounts at depository institutions, credit union share draft accounts and demand deposits at thrift institutions. Seasonally adjusted M1 is calculated by summing currency, travelers checks, demand deposits, and OCDs, each seasonally adjusted separately.

M2
2. Consists of M1 plus savings deposits (including money market deposit accounts), small-denomination time deposits (time deposits-including retail RPs-in amounts of less than $100,000), and balances in retail money market mutual funds. Excludes individual retirement account (IRA) and Keogh balances at depository institutions and money market funds. Seasonally adjusted M2 is computed by summing savings deposits, small denomination time deposits, and retail money fund balances, each seasonally adjusted separately, and adding this result to seasonally adjusted M1.

M3
3. Consists of M2 plus large-denomination time deposits (in amounts of $100,000 or more), balances in institutional money funds, RP liabilities (overnight and term) issued by all depository institutions, and Eurodollars (overnight and term) held by U.S. residents at foreign branches of U.S. banks worldwide and at all banking offices in the United Kingdom and Canada. Excludes amounts held by depository institutions, the U.S. government, money funds, and foreign banks and official institutions.

Seasonally adjusted M3 is calculated by summing large time deposits, institutional money fund balances, RP liabilities, and Eurodollars, each adjusted separately, and adding this result to seasonally adjusted M2. Note: Current and historical H.6 data are available each week on the Federal Reserve Board's web site http://www.federalreserve.gov. Monthly data are available back to January 1959, and weekly data are available back to January 1975 for most series. For information about individual copies or subscriptions, contact Publication Services at the Federal Reserve Board (phone 202-452-3245, fax 202-728-5886). For paid electronic access to current and historical data, call STAT-USA at 1-800-782-8872 or 202-482-1986.

Dashboy~

[sadie]

Great posts Jason and dashboy, Thanks

Dashboy: thanks for your explaination of the types of money.

Jason: I would love to discuss further with you how you would approach this issue. I have been fighting the bank in a chapter13 bankruptcy for about 7 months and have done fairly well in my pleadings thus far. Most importantly I am a willing student. Willing to learn and willing to put what I learn into practice. I have a lot at stake here as I have a rather large family, so any help you could give would be greatly appreciated.

Thanks

Davemcp