Question

4.) Becky Smith signed a note in the amount of $200,000 in favor of Country Home Loans, Inc., to obtain a loan to buy a house in Marrero, Louisiana. The note was endorsed "Pay to the order of ____________ without recourse Country Home Loans, Inc." Almost five years later Smith defaulted on the payments. The Federal National Mortgage Association (Fannie Mae) wanted to foreclose on the house and sell it to recover the balance due. Smith argued that the words "to

Answer 1

Becky Smith signed a note and she cannot own that property since the note was in country  home loans and he defaulted payment under that law.

Explanation:

The Situation is defined as

Pursuant to U.C.C . § 3-203, transfer of instrument is done when a instrument is delivcered by a person other than the issuer for the purpose of giving it to the receiver based on the right to enforce the instrument. The rights are the rights as a holder in due course. However the transfer cannot acquire rights of a holder in due course if the transferee is engaged in fraud or illegality affecting the instrument.

When an instrument is transferred for value, a transferee do not become a holder bacause of lack of indorsement. Highly, when a transferor proposes to transfer less than the entire instrument, the negotiation of the instrument does not occur.

The finest response to the argument of Fannie mae's is because Becky Smith signed a note and she cannot own that property since the note was in country  home loans and he defaulted payment under that law.