To Sign or Not Sign The Allonge

If a bank obtains a Note, but the Note contains an endorsement in blank on its face — can the bank seek to enforce the the lien associated with the Note against a residence?

Yep.

If a Note contains an endorsement in blank on its face, it renders the note payable to whoever possesses the original, and thereby rendering the allonges superfluous.   In order to have standing to file a POC or enforce a lien, the claimant must be a “person entitled to enforce the note“.

How do you become a “person entitled to enforce the note”?  You have to be a “holder” of the note.

How do you become a “holder” of a note?  One way is to be in possession of the original note because being in possession of a signed or unsigned note makes the note payable to the bearer of the original note.

Source:  In re: Thelldien Linmoe and Warren Robert Wegesend, HI-14-1236-KuJuki, 9th Cir. BAP (unpublished) citing Article 3 of the UCC Requirements (primary source of law)

Leave a Reply


4 − = one