The Non-Uniform Commercial Code: The Creeping, Problematic Application of Article 9 to Determine Outcomes in Foreclosure Cases

The historical developments of negotiability and foreclosure law, along with the present foreclosure backlog, point toward the fact that negotiability provides a predictable framework in an otherwise chaotic mess.

A mortgage promissory note is a negotiable instrument, which entitles a plaintiff lender to claim status as the holder of the negotiable instrument.  As the holder of the negotiable instrument, the plaintiff lender gains the incidental right to enforce any mortgage related to the note.  

This formula is nearly universal and has existed since before the Great Depression ushered forth the last foreclosure backlog.  Recent attempts to privilege Article 9 over Article 3 will not result in better outcomes in foreclosure cases, but will instead replicate the errors seen throughout the history of the law relating to foreclosure.

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