PETES’s Missing Now What???

In the previous article we have conversed about the “Person entitled to enforce” hereinafter abbreviated to “PETE” In this article we are looking at What happens when there is no PETE? This is a question that is asked however, no answer is given by the party looking to foreclose. The party that is attempting to foreclose had a choice to make prior to attempting a foreclosure action. The party could seek monetary relief by utilizing the Tangible Promissory Note, or it could attempt foreclosure by using the Security Instrument that was to be attached to a properly perfected Tangible Promissory Note.

The problem is that for a party to seek a collection of a debt that was to be evidenced by a Tangible Promissory Note that party would need to have a valid Tangible Negotiable Instrument prior to seeking relief. You can not seek monetary damages and attempt foreclosure on a Security Instrument as well. You must choose which action you wish to take; either foreclosure or collection of the debt.

To add into the mix of the Tangible Promissory Note; which evidences the debt and Security Instrument that is to be attached to the debt; is the creation of a new instrument. This is defined as the eNote and the eMortgage, along with an intangible obligation which is created from the payment stream of the Tangible Promissory Note of the borrower. While this all may sound confusing, it is. There is now an identical twin of the tangible in an intangible format. The meaning of Intangible is: incapable of being perceived by the sense of touch, as incorporeal or immaterial things, impalpable. It is an electronic copy of a transferable record that is utilized by an electronic agent, not a natural person as required in most paper commercial transactions. These instruments are governed by UCC Article 8, or your states equivalence, and not UCC Article 3 which is reserved to Tangible Negotiable instruments. It is in the using of this electronic file where transactions are made in such a way that the transactions pertaining to the Tangible Instrument of which they are not.

An Intangible obligation is created by an Account Debtor using this electronic file. The problem with this is that this obligation is not created by the Tangible Obligee (The Borrower). This Intangible obligation is created using the payment stream of the Tangible Promissory Note of the borrower, and is affected when there is a presumed deficiency on the payment stream pertaining to the Tangible Promissory Note. Therein is where the problem lies. There was no proper transfer of the Mortgage Loan Instrument in its entirety and there was no transfer of rights. There is no PETE to the Tangible Promissory Note, and no Pete to the Security Instrument. The Party named in public record does not match the party if there is one named on the Tangible Promissory Note. Both PETE’s should be the same, however that is not the case, they are different. The chain of endorsements does not match the chain of title.

It is time to wake up and realize that there is no PETE and that he is not coming back, he no longer has a home.


Joseph Esquivel
Mortgage Compliance Investigators
Copyrighted© 2013

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