Bank of America v. Limato

Attached is the excellent, well thought out and lengthy decision (25 pages).  Judge Peter Doyne provides a detailed analysis of the Rules of Evidence, hearsay, and holder.  The Rules of Evidence and hearsay are standard across the U.S. so the judge's definitions could well be used anywhere with references to your own state's statutes.

What I found interesting was the definition and explanation of a "nonholder in possession."  Judge Doyne explains that in the nonholder in possession scenario, an "instrument is physically transferred without the the indorsement of the issuer."  The key words are "physically transferred."  Judge Doyne further states that the ability to deny the enforcement of an unindorsed instrument hinges on "if the transferee engaged in fraud or illegality affecting the instrument." 

This brings me to UCC 3.  Under UCC 3, a note is negotiated by transfer and delivery.  A plaintiff must prove that the note has been physically transferred to them in order to claim nonholder in possession status.  This is an element that MERS cannot never prove.  No notes are ever physically transferred to MERS.  MERS has repeatedly denied it has ever been in possession of any notes.  They claim an interest through the mortgage only.  See Nebraska Dept. of Banking v. MERS.  I have attached both the decision as well as MERS appellate brief.