Personal Knowledge, Hearsay, Conclusory Averments and the Best Evidence Rule

In all of the hoopla and excitement arising out of the aggressive coverage of the Washington Post
relating to defects in GMAC Mortgage affidavits, one rather central matter seems to be persistently
overlooked, even by some of the more articulate advocates of mortgage foreclosure defendants. This is
the FACT that the averments appearing within these affidavits would still be FALSE even if GMAC
had more employees and had deliberately taken more time in the preparation of each document.
Spokesmen for GMAC and the mortgage industry would have the press and the public believe that the
defects in the emerging “robo-affidavits” are narrow and technical. The implication is (a) that the
averments were generally TRUE and (b) that if somehow the affiant had taken a little extra time in
reviewing the record and familiarizing himself with his averments that somehow all of these affidavits
would then be OK.
This post is intended both to explain why this is NOT the case and to set out in a clear and coherent
way how almost any routine affidavit pleaded by a mortgage plaintiff might be defeated in almost any
jurisdiction with reference to that jurisdiction’s Rules of Civil Procedure and Rules of Evidence.
The usual caveats apply. I am NOT an attorney and this is NOT legal advice, but rather discussion of
important national news pertaining to pervasive fraud perpetrated by foreclosure mills nationally.
Conscientious MSFraud Forum participants, may, however, find this post to be a catalyst for scrutiny of
the affidavits served in their own cases, and a point of departure for inquiry and research into the Rules
of Evidence and cases interpreting those rules in their jurisdiction.
Those in non-judicial foreclosure states are also expressly cautioned that, generally speaking, these
same rules of evidence do NOT apply to non-judicial foreclosure by private sale, though the validity of
such sale may completely depend upon the verity of documents executed and the regularity and
conformity of the sale to the contractual terms set forth in the deed of trust and in the law of the local
jurisdiction. In some instances, though, as where a borrower in a non-judicial foreclosure state files for
bankruptcy and faces a proof of claim or a motion for relief of stay, these same principles may come
into action even in the non-judicial foreclosure states. In short, this discussion is of particular relevance
to those in judicial foreclosure states, though those in non-judicial foreclosure states may still take an
interest and, perhaps, find some useful nugget herein.
A theme of this discussion is necessarily set forth within both the rules for summary judgment and the
rules of evidence that an affiant make averments based upon personal knowledge and that the
testimony be admissible at trial.
Foreclosure defense advocates and the news media have seized upon the fact that GMAC affiant
Jeffrey STEPHAN may have been executing up to 10,000 documents each month, about one per
minute. While this is dramatic, within this post, I will show that Jeffrey STEPHAN probably wasn’t
competent to execute even a SINGLE admissible affidavit representing facts such as the foreclosure
mills routinely suborn from these robo-signers.

Summary Judgment Rules

As a preliminary matter, let us first review the typical summary judgment rules as they pertain to
admissible affidavits. The summary judgment rule under the Federal Rules of Civil Procedure is
generally set forth within Rule 56 and Federal cases elaborating that rule (see
http://www.law.cornell.edu/rules/frcp/Rule56.htm). Pro se litigants should bear in mind that state court
proceedings are not usually conducted using the Federal Rules per se, however a number of states
model their rules after the Federal Rules. However, those states which model their rules after the
Federal Rules also sometimes look to Federal Rules decisions for guidance in applying their own state
rules. Each litigant should carefully scrutinize the rules of their own jurisdiction and the cases
interpreting those rules. ALSO CONSULT A LAWYER.
The particular provision of Federal Rule 56 which is singularly applicable appears within Rule 56(e)
(1), which reads:

“A supporting or opposing affidavit must be made on personal knowledge, set out facts that
would be admissible in evidence, and show that the affiant is competent to testify on the
matters stated. If a paper or part of a paper is referred to in an affidavit, a sworn or certified
copy must be attached to or served with the affidavit. The court may permit an affidavit to be
supplemented or opposed by depositions, answers to interrogatories, or additional affidavits.
[emphasis added]”

Summary Judgment Rules in Some Other Judicial Foreclosure States

It is my impression that Florida’s summary judgment rule is set for in Rule 1.510 (see
http://www.doh.state.fl.us/ig/ADR/General/FLorida%20Rules%20for%20Civil%20Procedures.pdf ).
Check the Rules through the Florida Courts, the cases interpreting these rules and check with a Florida
attorney to be sure!
Florida Rule 1.510(e) is shown to read:
“(e) Form of Affidavits; Further Testimony.
Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such
facts as would be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts
thereof referred to in an affidavit shall be attached thereto or served therewith. The court may
permit affidavits to be supplemented or opposed by depositions, answers to interrogatories, or
by further affidavits. [emphasis added]”

*
It is my impression that Ohio’s summary judgment rule is set for in Ohio’s Civil Rule 56 (modeled after
the Federal Rules) [see
http://www.supremecourt.ohio.gov/LegalResources/Rules/civil/CivilProcedure.pdf ]. The provision
relating to affidavits, like the Federal Rule appears in paragraph (E):
“(E) Form of affidavits; further testimony; defense required.
Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such
facts as would be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated in the affidavit. Sworn or certified copies of all papers
or parts of papers referred to in an affidavit shall be attached to or served with the affidavit. The
 court may permit affidavits to be supplemented or opposed by depositions or by further
affidavits. When a motion for summary judgment is made and supported as provided in this
rule, an adverse party may not rest upon the mere allegations or denials of the party’s pleadings,
but the party’s response, by affidavit or as otherwise provided in this rule, must set forth
specific facts showing that there is a genuine issue for trial. If the party does not so respond,
summary judgment, if appropriate, shall be entered against the party.”

*
Kentucky’s Rules (http://www.louisvillelaw.com/civil_rules/index.htm ) also seem to be modeled on
the Federal Rules. The KY summary judgment rule appears at CR 56
(http://www.louisvillelaw.com/civil_rules/cr56.htm):
“CR 56.05 FORM OF AFFIDAVITS; FURTHER TESTIMONY
Supporting and opposing affidavits shall be made on personal knowledge, shall set forth such
facts as would be admissible in evidence, and shall show affirmatively that the affiant is
competent to testify to the matters stated therein. Sworn or certified copies of all papers or parts
thereof referred to in an affidavit shall be attached thereto or served therewith. The court may
permit affidavits to be supplemented or opposed by depositions or by further affidavits.”

*
It is readily apparent that for the three states shown, that the state rules sometimes closely mirror the
Federal Rules.
But here, I should also note that it is my impression that the Rules in New York and New Jersey are
very different from the Federal Rules. See for example, New Jersey’s Rule 4.67 at
http://www.judiciary.state.nj.us/rules/r4-67.htm . Litigants would be particularly well counseled to
seek guidance from a licensed attorney practicing in those states when defending against a motion for
summary judgment in these jurisdictions. Getting a lawyer involved is almost always a good idea.
*
Having set forth the general summary judgment framework, I am going to deviate from summary
judgment and from mortgage foreclosure for a moment to set out a hypothetical criminal case situation
to illustrate and distinguish the limits of personal knowledge and admissibility. I readily recognize that
the rules may be different in a criminal setting, but the purpose of my illustration is to show the
philosophy and the inherent fairness which underlies the rules almost everywhere. And given the
pervasiveness of crime drama in our popular culture, I think that many will find this illustration
somewhat more intuitive and even familiar.

An Illustration
Suppose that a felonious rascal we shall call Richard ROE checks into the Vacation & Suites Inn
Hotel. ROE appears in person at the front desk upon check in where the desk clerk Mary HOST
verifies his identification based upon his state drivers’ license, takes an imprint of ROE’s Visa credit
card, and notes ROE’s enrollment in the hotel’s special Rewards program. Mary HOST welcomes
ROE to the hotel and gives ROE two access cards which serve as keys to his room. The Vacation Inn
& Suites being an elite hotel, bell hop Bert PORTER assists ROE with his luggage taking ROE up to
his third floor suite in a camera equipped elevator. As PORTER departs, ROE asks PORTER if he can
identify a good local Escort Service. PORTER suggests that ROE look on Craig’s List where willing
local girls advertise. ROE subsequently connects to the hotel’s WIFI network and browses Craig’s List
adult listings until he finds a suitable and promising ad, then placing a call to the advertised toll free
number from his hotel room phone. Mr. ROE reaches the local entrepreneur Miss Racy VIXEN, who
thereafter makes a visit to ROE’s hotel, asking Bert PORTER for directions to ROE’s room and taking
the elevator up to the third floor. When in a burst of laughter the escort recommends that ROE
purchase male enhancement pharmaceuticals, her embarrassed customer falls into a rage and strangles
her. Then he brings his car around to the hotel’s back entrance, surreptitiously placing her body in the
trunk. ROE then drives over a toll bridge, using his EZ Pass to pay, and deposits Miss VIXEN’s
remains in the harbor. He then returns to the hotel and orders dinner through room service, which meal
is delivered by Salty COOK, who notices that ROE has been badly scratched. The following morning
ROE checks out and returns home. Thereafter, Dusty SHEETS, the maid cleaning his room, discovers
the escort Racy VIXEN’s mobile telephone which had fallen under the bed. Ms. SHEETS turns in the
phone to Mary HOST who logs it into the computer and places it in the hotel Lost & Found at the Front
Desk. The police later find Racy VIXEN’s body floating in the harbor with ROE’s DNA beneath her
fingernails, recognizing and identifying her within a few days. Calling VIXEN’s last known phone
number the Police find themselves talking to the desk clerk Mary HOST who answers the mobile
phone when it rings. The Police come to the hotel and recover the phone.
Subsequently, the hotel’s director of security Rick TRACY, who had been vacationing in South
Dakota at the time of the murder, interviews all of the hotel’s employees, taking sworn statements from
each and generally conducting a parallel internal investigation. He also reviews tapes from hotel
security camera’s which show ROE arriving at the hotel and being assisted by PORTER, as well as
show Ms. VIXEN’s arrival, but no departure (at least by the elevator and front lobby). Other camera’s
show ROE moving his vehicle to the back of the building and then driving away. Records from the
security log show the times ROE entered his room and show him coming in a hotel back door lacking
video surveillance after repositioning his car. TRACY prepares a report summarizing what each
employee knows about ROE’s stay at the hotel, what he has observed from the hotel security tapes,
adding in facts he has read in news accounts of the crime, the investigation and the arrest of ROE. He
also adds in some facts he has learned over beers from a police sergeant with knowledge of the case.
He then concludes that ROE is guilty of the murder of Racy VIXEN, stating that as a fact in conclusion
in his written report to the hotel’s management.
Very pleased with his excellent detective work, TRACY wants to spare the county the cost of an
expensive trial and offers his report to the police and the DA to be used as evidence against ROE. He
also offers to testify that he knows that ROE is guilty.
Is Rick TRACY’s report admissible at trial? Can TRACY testify as to ROE’s guilt?
Given the sheer volume of movie and television depictions of detectives, crime and law related dramas,
we all pretty much intuitively KNOW the answer.
Rick TRACY’s knowledge of the case and the crime is essentially all HEARSAY and he lacks the
requisite personal knowledge to be a witness as to most of the critical facts of the case. Moreover, it
would be inherently unfair and prejudicial to allow him to testify as to his CONCLUSIONS as to the
ultimate question to be decided by the judge and jury: ROE’s guilt. To allow him to simply take the
facts that he has carefully laced together in his report and to substitute his CONCLUSIONS would be
to substitute his decision making for that of the judge and jury.
Of course, the police and DA may find TRACY’s report to be helpful in obtaining and arraying the
evidence in the case. But the report itself is going to be inadmissible. Similarly, TRACY’s value as a
witness is very limited given his lack of personal interaction and personal knowledge of the facts.
Even something as simple as identification of ROE on the recorded video tapes would be something for
which Rick TRACY would probably be ineligible, having never MET ROE. Whether the person
shown on the videos is, in fact, ROE, is a question of FACT to be decided by the JURY. The JURY
would be shown the video tapes, NOT treated to Rick TRACY’s description of what he had
CONCLUDED from the tape. By contrast, other witnesses such as Mary HOST or Bert PORTER
might reasonably be asked if the person in the tape appeared to be the SAME person who was checked
in or whose baggage was carted to ROE’s room. Having each personally seen ROE that day and
knowing how he was then attired, such identification makes sense. Similarly, Bert PORTER might be
asked to identify HIMSELF on the video tape, assisting ROE in getting the baggage up the elevator to
his room. The KEY to admissibility is personal knowledge.
Rick TRACY wouldn’t typically be permitted to testify as to Bert PORTER’s conversation with ROE
and his suggestion that he find an escort on Craigs List. This is merely hearsay as to TRACY and Bert
PORTER is the better witness as to his own conversation.
Rick TRACY also wouldn’t typically be permitted to testify as to the mobile phone found by the maid.
The maid would, herself, be the better witness, able to describe the circumstances of her discovery
based upon personal knowledge. What TRACY knows from SHEETS’ affidavit is again merely
hearsay. Mary HOST could probably also testify that the maid had given her the mobile phone and that
SHEETS told her that it was found in ROE’s room. The latter would probably be hearsay as to the
discovery itself, but personal knowledge as to what the maid had told her, corroborating the maid’s
story at least as to the timeline and further establishing the chain of custody of the mobile phone.
Rick TRACY MIGHT be a competent witness as to the hotel’s security camera system, its character,
employment and use, as well as a witness as to the authenticity of the tapes themselves. That is, he
might be a valid foundation witness to show that these tapes had been made at the time in question and
to describe the hotel’s policies as to disposition and retention of security video tapes. But TRACY
wouldn’t usually be allowed to merely describe and summarize what the tapes SHOWED and to
substitute his conclusions for the determination of the jury.
A hotel accounting, bookkeeping or management employee also might be eligible to testify as to some
other facts relating to ROE’s check-in, his WIFI Internet use and/or his use of the hotel phone. These
employees might be able to establish that a credit card bearing ROE’s name and Visa CARD number
had been authenticated and authorized using the hotel’s guest billing and accounting system and that
the bank had authorized the charges. Similarly, IF there was a log of WIFI TCP/IP connections, this
could be authenticated by an employee with knowledge of these records. And if the hotel’s phone
accounting software tracked the outgoing number of outgoing calls, automatically saving this
information, a hotel employee could probably testify as to the authenticity of the record showing ROE’s
outgoing call to the escort. IF Mary HOST had also entered identifying information from ROE’s
driver’s license into the hotel check-in data screens, hotel personnel could verify that these records
were entered contemporaneous to ROE’s check-in.
Note that the witness(es) wouldn’t so much be testifying as to the facts of these various automated
records. The evidence would the records themselves. The witness would be there to identify and
authenticate the records, providing a foundation for their admissibility.
Note that these other accounting employees could NOT validly testify that ROE had himself presented
his credit card. They have no personal knowledge of this. Mary HOST can testify that ROE presented
this credit card on check-in. The hotel employees lack the personal knowledge to testify as to the
identity of the person who presented the card. It is easy to see WHY testimony by someone lacking
personal knowledge must not be allowed. Suppose that someone other than ROE had checked in using
ROE’s card? Should ROE be convicted based upon the assumption that the person presenting that card
was actually ROE?
Hotel management or accounting personnel may very well be able to show that a call to a certain
number came from the phone in ROE’s room. But they cannot testify that it was ROE who made the
call, as they were not present and have no personal knowledge of this. The determination as to whether
it was ROE who placed the ultimately fatal call is a decision for the JURY given the various admissible
facts placed into evidence.
The witnesses are expected to present the facts. The jury is going to be charged with making
determinations based upon these facts.
*
The illustration is intended to give some refresher insight as to what it means to have personal
knowledge, when testimony might be hearsay, the nature of conclusory statements and why these might
be inadmissible.
Here it is appropriate to fold in three additional ideas: The “best evidence rule”, the business records
exception to the hearsay rule and elements of a proper business records affidavit.

The Best Evidence Rule

First, the “Best Evidence Rule”, appearing within the rules of evidence almost everywhere is that a
party must use the best evidence of the matter which is sought to be proven.
This rule is embodied in the Federal Rules of Evidence (see http://www.law.cornell.edu/rules/fre/) at
Rule 1001 and 1002. Similar Rules are in place in most states.
Federal Rule 1001 (http://www.law.cornell.edu/rules/fre/rules.htm#Rule1001) states:
“Rule 1001. Definitions
For purposes of this article the following definitions are applicable:
(1) Writings and recordings. "Writings" and "recordings" consist of letters, words, or numbers,
or their equivalent, set down by handwriting, typewriting, printing, photostating, photographing,
magnetic impulse, mechanical or electronic recording, or other form of data compilation.
(2) Photographs. "Photographs" include still photographs, X-ray films, video tapes, and motion
pictures.
(3) Original. An "original" of a writing or recording is the writing or recording itself or any
counterpart intended to have the same effect by a person executing or issuing it. An "original"
of a photograph includes the negative or any print therefrom. If data are stored in a computer or
similar device, any printout or other output readable by sight, shown to reflect the data
accurately, is an "original".
 (4) Duplicate. A "duplicate" is a counterpart produced by the same impression as the original, or
from the same matrix, or by means of photography, including enlargements and miniatures, or
by mechanical or electronic re-recording, or by chemical reproduction, or by other equivalent
techniques which accurately reproduces the original.”

Federal Rule 1002 states:

“Rule 1002. Requirement of Original
To prove the content of a writing, recording, or photograph, the original writing, recording, or
photograph is required, except as otherwise provided in these rules or by Act of Congress.”

Federal Rule 1003 makes an exception for duplicates:

“Rule 1003. Admissibility of Duplicates
A duplicate is admissible to the same extent as an original unless (1) a genuine question is
raised as to the authenticity of the original or (2) in the circumstances it would be unfair to
admit the duplicate in lieu of the original.”

Note that there is no exception made for some oral or written paraphrasing or retelling of what the
original stated. That is, it is NOT contemplated by this Rule that a party may simply take the position,
“I have some evidence that you cannot see, but I will testify as to what it actually says (trust me).”
If the matter in dispute is the terms of the contract, the best evidence is usually the contract itself. If
the matter in dispute is a negotiable instrument, such as a promissory note, or security instrument such
as a mortgage or deed of trust, then the best evidence is going to be that instrument.
In other words, if suing upon a contract, one certainly wouldn’t permit a party to the contract to
substitute that party’s conclusions as to what the contract said for the plain language of the contract
itself. (This is not to say that a party cannot testify as to its intentions, impressions and understanding
as to the meaning of ambiguous language in some cases, but rather to reinforce that a party cannot
come into court and say, “We are NOT GOING TO SHOW YOU THE CONTRACT, but we will TELL
YOU what the contract said.”)
While it is most common to think about the best evidence rule within the context of production of
primary records like contracts and instruments, it does not usually stop there. It applies to all written
records.
The simple fact of the matter is that the best evidence of the delivery of a negotiable instrument is the
delivery receipt or custodial receipt reflecting such delivery! This is little understood, even by most
attorneys. But it is also really a matter of common sense. Given that a large financial institution is
continuously engaged in the regular delivery of a large number of instruments, it is actually
UNLIKELY that an employee is going to actually REMEMBER the delivery of a particular
undifferentiated mortgage note, particularly several years later, any more than a teller will remember a
specific deposit years after the fact. It is therefore the WRITTEN DELIVERY RECEIPT WHICH
PROPERLY MEMORIALIZES THE TRANSACTION.
Let me put this another way. HOW DOES THE AFFIANT KNOW THAT DELIVERY OF THE
INSTRUMENT HAS TAKEN PLACE? Did the affiant WITNESS THE DELIVERY? If so, then the
affiant had personal knowledge and should SAY SO IN THE AFFIDAVIT. If, instead, the affiant is
relying upon some written record which purportedly memorializes this alleged delivery, then the
written record is the evidence, NOT the affiant’s HEARSAY retelling of what he has concluded the
delivery receipt says or means.
If an affiant is stating in an averment that a particular entity is the owner and/or the holder, this is
inadmissible FIRST because it is an impermissible legal conclusion. But it is also inadmissible because
it is strictly HEARSAY from the perspective of the affiant who wasn’t a witness to the implicit asserted
delivery of the instrument which would complete negotiation and make the transferee a holder. And
pursuant to the best evidence rule, IF there is primary written evidence supporting the assertion that the
instrument was actually delivered then it is this primary written evidence – the delivery receipt – which
must be brought forward in proof.
This very same idea applies to the accounting records and allegation of default or the plaintiff’s
allegations with respect to the amount due. UNLESS the affiant PERSONALLY calculated the interest
accruals and other charges and accepted defendant’s payments and posted these to the defendant’s
account, the affiant LACKS PERSONAL KNOWLEDGE of the amount owed and the balance. In a
large financial institution, where responsibilities for receipt and accounting of payments is defused and
syndicated across many employees, it is NOT POSSIBLE for any single employee to have personal
knowledge of a borrower’s account EXCEPT by reference to the institution’s accounting records. IF
the affiant is testifying based upon the affiant’s inspection of the accounting records, then this is
inherently HEARSAY. The best evidence as to the contents of the accounting records is the records
themselves, NOT some secondary testimony as to what the records say or mean from a person lacking
any personal knowledge of the transactions shown within the accounting. Under the best evidence rule,
the requirement is that the underlying primary accounting records be brought forward so that these
may be subject to critical review, confrontation and possible impeachment. The affiant’s hearsay
summary of these records is simply NOT an acceptable alternative.

The Business Records Exception To Hearsay

This brings me to the second misunderstood element which circumscribes admissibility of business
records and precludes consideration of the plaintiff’s usual perjured affidavit. This involves the
business records exception to the hearsay rule.
The Federal Hearsay Rule is set forth in Rule 802, which reads [see
http://www.law.cornell.edu/rules/fre/rules.htm#Rule802]:
“Rule 802. Hearsay Rule
Hearsay is not admissible except as provided by these rules or by other rules prescribed by the
Supreme Court pursuant to statutory authority or by Act of Congress.”
There are a number of exceptions to the Hearsay Rule, but only one of these applies to the typical
situation where a business is seeking to introduce as evidence business records which have been
created by a wide variety of persons at different times and places. This is the business records
exception appearing within Federal Rule 803 [see
http://www.law.cornell.edu/rules/fre/rules.htm#Rule803]:
 “Rule 803. Hearsay Exceptions; Availability of Declarant Immaterial
The following are not excluded by the hearsay rule, even though the declarant is available as a
witness:
...
(6) Records of regularly conducted activity. A memorandum, report, record, or data
compilation, in any form, of acts, events, conditions, opinions, or diagnoses, made at or
near the time by, or from information transmitted by, a person with knowledge, if kept in
the course of a regularly conducted business activity, and if it was the regular practice of
that business activity to make the memorandum, report, record or data compilation, all
as shown by the testimony of the custodian or other qualified witness, or by certification
that complies with Rule 902(11), Rule 902(12), or a statute permitting certification,
unless the source of information or the method or circumstances of preparation indicate
lack of trustworthiness. The term "business" as used in this paragraph includes business,
institution, association, profession, occupation, and calling of every kind, whether or not
conducted for profit.
. . .”
What this tells us is that the accounting records kept in the ordinary course of business are admissible
when introduced “by the testimony of the custodian or other qualified witness, or by certification that
complies with Rule 902(11), Rule 902(12)”. But the wording of this rule expressly contemplates only
the admissibility of those records kept “if kept in the course of a regularly conducted business activity,
and if it was the regular practice of that business activity to make the memorandum, report, record or
data compilation”.
Some of the foreclosure mills would have us believe that since they engage in evidence fabrication
and forgery in their regular course of business that this would make these perjured and forged
records admissible. I can assure you that this was not the purpose or intention of the drafters of
this rule!
It clearly follows from this rule that an affiant’s summarization or conclusory description or other
compilation or report which purports to synthesize what the original business records say or mean is
not subject to the hearsay exception! But this is precisely what the plaintiffs are pleading in as
evidence daily in foreclosure actions across the country.
When Mr. STEPHANS represents within a sworn affidavit that he has personal knowledge that a
particular borrower is in default or that he has personal knowledge that a borrower owes a particular
amount, this is clearly UNTRUE. He NEVER has such personal knowledge. Instead, he has an
impression and/or conclusion which he formed outside of the ordinary course of business, in the course
of litigation, at best possibly based upon business records, but ALWAYS inadmissible HEARSAY!

The Business Records Affidavit

The reference in Rule 803(6) to Rules 902(11) and 902(12) refer to the express requirements of a valid
business records affidavit. While Rule 803(6) tells us WHAT is subject to the business records
exception, Rules 902(11) and 902(12) tell us HOW to get this evidence in when there isn’t a live
witness present to authenticate these records. The latter provision relates to foreign records. The Rule
for domestic records, Rule 902(11) reads [see
http://www.law.cornell.edu/rules/fre/rules.htm#Rule902]:
“(11) Certified domestic records of regularly conducted activity. The original or a duplicate
of a domestic record of regularly conducted activity that would be admissible under Rule 803(6)
if accompanied by a written declaration of its custodian or other qualified person, in a manner
complying with any Act of Congress or rule prescribed by the Supreme Court pursuant to
statutory authority, certifying that the record:
(A) was made at or near the time of the occurrence of the matters set forth by, or from
information transmitted by, a person with knowledge of those matters;
(B) was kept in the course of the regularly conducted activity; and
(C) was made by the regularly conducted activity as a regular practice.
A party intending to offer a record into evidence under this paragraph must provide written
notice of that intention to all adverse parties, and must make the record and declaration
available for inspection sufficiently in advance of their offer into evidence to provide an
adverse party with a fair opportunity to challenge them. [emphasis added]”
Note the very last phrase, which clearly shows the court’s intention to give the opposing party their due
process opportunity to confront and impeach the evidence. The “We have some evidence but you
cannot see it. We will describe to you what it says and means (according to us).” method of proof of
facts and litigation has no place in justice or jurisprudence.

The simple fact of the matter is that the ONLY thing that the mortgage servicer affiants might be
competent to swear to is a business records affidavit to bring in the servicer’s business records. A
correctly crafted affidavit might very well establish that copies of a promissory note and/or mortgage
security instrument were taken from the mortgage servicer’s files, that an assignment was taken from
the servicer’s files, that a delivery receipt was found amongst these records, while attaching copies of
the servicer’s accounting records.

What the affiant would be swearing to would be that these records were exact copies taken from the
business records in accordance with the rule and that these records comported with the requirements
expressly contemplated by the rule as set forth above. That is, if Mr. STEPHANS had access to
GMAC’s business records and was able to obtain copies of these original records, he could identify and
authenticate these records in accordance with the rule, while attaching them to the proper business
records affidavit. Had he been doing this, and doing it correctly, this would be permissible.
*
Let us now carefully review the mortgage origination and securitization transactions, the negotiation
and assignment of the mortgage, the alleged default, the alleged amount owed and the ownership or
holdership of the instrument and entitlement to sue with the issue of personal knowledge in mind.
Let us begin with instruments themselves. Very often, the mortgage foreclosure defendant is alleged to
be the maker of a promissory note and grantor of a mortgage made out in favor of some named Lender
OTHER THAN the entity actually bringing the suit. The defendants are alleged to have applied for a
mortgage and to have attended the closing executing the alleged promissory note. It would be
employees of the originating Lender that might have personal knowledge of the alleged borrower’s
application. BUT ONLY THOSE ACTUALLY IN ATTENDANCE AT THE CLOSING WOULD
HAVE PERSONAL KNOWLEDGE THAT THE DEFENDANT(S) HAD SIGNED THE
INSTRUMENT AS MAKER. And these same persons present at closing would be the ones with
personal knowledge of the funding of the loan – the consideration given in exchange for the promissory
note and mortgage.
A person OTHER THAN one with personal knowledge CANNOT possibly by affidavit testify as to the
validity of the instrument or the fact of the maker’s signature, nor can such a person testify to the
funding of the loan. But the affiant might by business records affidavit identify the promissory note,
mortgage security instrument, HUD-1 Settlement statement or other similar documents as records kept
in the regular course of business which memorialize this transaction.
Only such identification and authentication would be appropriate as to a business records affidavit. A
person other than those attending the closing wouldn’t be a competent witness as to what happened at
the closing itself.
After the execution of the instrument, the negotiable instrument is typically indorsed and delivered to
another purchasing mortgage investor. The commercial law of negotiation of the instrument is set forth
in the Uniform Commercial Code, which calls for indorsement and delivery. Valid indorsement and
delivery usually makes the transferee the holder with a right to enforce the instrument. But
WHETHER this is the case is a question of LAW, based upon the FACTS of indorsement and delivery.
And WHO has personal knowledge of the indorsement and delivery? Well, the person INDORSING
the instrument has personal knowledge as to the indorsement. And the person arranging for delivery
and the person ACCEPTING DELIVERY would typically have personal knowledge of the delivery.
The delivery itself would typically be memorialized by a delivery receipt or custodial receipt of some
sort. Because a promissory note indorsed in blank is essentially a bearer instrument, the movements of
such instruments are very closely monitored and controlled. And such instruments are stored in vaults,
not in loan files. The bottom line is there exist written records of the movement of such instruments.
They are insured when sent by courier or mail. These matters are not left to chance. And despite all of
the assertions that notes have been lost or misplaced, this is all utter nonsense! This almost never
happens. Sleazy foreclosure mills are simply falsely swearing that the note is lost to avoid all of the
effort and paperwork (even the responsibility) associated with having to obtain the note from the vaults
of an institutional custodian. In short, when the plaintiff pleads that the note is missing, they are almost
always beginning the suit with a false representation to the court!
One can inspect the promissory note to ascertain whether it bears an indorsement. But by pleading that
the note is lost, the plaintiff is depriving the defendant of an opportunity to inspect the promissory note.
One must bear in mind that since most indorsements are UNDATED, the indorsement cannot tell us
WHEN the indorsement took place. One would have to look to other extrinsic evidence for that
information. The typical affiant is either a robo-signer employee of the mortgage servicer OR an
employee of contract forgers and perjurers employed by the servicer. Note that the servicer typically
doesn’t OWN the loan. So in most instances (unless the servicer is also the originating Lender) NO
EMPLOYEE of the servicer ever executed or witnessed the indorsements at issue.
Similarly, the servicer is not typically involved in receipt of delivery of an indorsed promissory note.
The note would be delivered to the mortgage investor, or, more likely, the institutional custodian acting
as the mortgage investor’s agent. Therefore, it is almost universally the case that NO EMPLOYEE OF
THE SERVICER receives delivery of the promissory note completing the negotiation. The servicer’s
employees would therefore almost NEVER have ANY PERSONAL KNOWLEDGE of the
delivery of the instrument.
Neither do the employees of the contract forgers and perjurers employed by the servicers have any role
in the acceptance of delivery of the instrument.
From an understanding of regular mortgage industry business practice, it is therefore readily
apparent that ANY sworn averment that an affiant who is an employee of the servicer EVER had
personal knowledge of either the indorsement OR the delivery of the instrument is almost always
a false statement under oath.
So while the news media remains fixated on the sheer volume of Mr. STEPHAN’s perjury, if he had
slowed down and very meticulously prepared only ONE affidavit a week, if he were to testify that he
had personal knowledge that a particular mortgage investor was the owner or the holder of a particular
promissory note, this averment would almost certainly always be a FALSE REPRESENTATION, as he
would NEVER have occasion to have such personal knowledge within the ordinary course of
business!
When an affiant states by affidavit that a particular party is the owner or the holder, the affiant is stating
not a fact, but a conclusion, and a legal conclusion at that. This conclusion subsumes the underlying
facts as to WHETHER the instrument was properly indorsed and whether and WHEN it was actually
delivered. Moreover, since the law of the PLACE OF DELIVERY usually controls the determination
as to the valid negotiation of an instrument, the conclusion subsumes that the person giving this
conclusion KNOWS WHERE the instrument was delivered and is well acquainted with the law of that
place.
In the end, though, just as Rick TRACY’s report concluding ROE’s guilt is inadmissible, a statement
by an affiant as to the legal conclusion that a particular party is the owner is absolutely an inadmissible
legal conclusion which reaches the ultimate factual question for the judge and/or jury based upon the
UNSTATED underlying facts.
(See, for example, the non-mortgage Ohio collections case Nat'l Check Bureau, Inc. v. Ruth, C.A. No.
24241, COURT OF APPEALS OF OHIO, NINTH APPELLATE DISTRICT, SUMMIT COUNTY,
2009 Ohio 4171; 2009 Ohio App. LEXIS 3506, August 19, 2009, Decided.)
The facts of the alleged default might be shown within the accounting records of the mortgage
servicer. These accounting records would presumably show the dates and amounts paid and the
amounts actually due and owing at each date. The accounting entries would reflect the FACTS, as
reflected in the servicer’s books of account (which may be in error).
Similarly, the conclusion that a defendant owed a certain amount is also typically inadmissible. What
might instead be admissible from a proper witness would be the authentication of the accounting
records themselves, which reflected this amount owed.
A business records affidavit is appropriate to bring in evidence of records created in the ordinary course
of business. The preparation of a summary for the court, while omitting and concealing the underlying
accounting records, involves the creation of a record for the court. This is NOT a record kept in the
ordinary course of business, but rather is a record being FABRICATED FOR IMPROPER USE AS
EVIDENCE.
A defendant is entitled to the opportunity to confront and impeach the evidence. If the only accounting
evidence furnished is a single number reflecting the affiant’s CONCLUSION as to the amount owed,
this deprives the defendant of the opportunity to show amounts improperly charged or applied, the
omission of amounts paid, errors in math or method of calculation, etc.
One must bear in mind that the typical affiant giving testimony on behalf of the plaintiff has NO
PERSONAL KNOWLEDGE of the defendant’s mortgage payment record. This is NOT a person who
is supervising the defendant’s account, calculating accruals, receiving and applying payments, etc. This
is a person who is looking at records created by others and drawing CONCLUSIONS therefrom. And
as we learn from Mr. STEPHANS’ deposition, he is simply too busy to actually verify any of the facts
to which he swears were the means even at his disposal.
Once again, Mr. STEPHANS could take ALL WEEK LONG to review a single borrower’s record. But
if what Mr. STEPHANS furnishes by way of affidavit is a conclusory statement that a default occurred
or that the borrower owes a certain amount, rather than identifying and authenticating records which set
forth such facts, then Mr. STEPHANS is making false sworn statements under oath in representing that
he has personal knowledge of a borrower’s default or the borrower’s balance, when he clearly NEVER
has such personal knowledge no matter HOW LONG he studies the accounting records. It is only these
records themselves which may be admissible.
*
In closing, I want to qualify that while I believe that affidavits now being used by foreclosure mills are
almost universally inadmissible hearsay, I want to recognize that this argument has not always been
recognized by the Courts. One problem that defendants are up against is the affiant’s FALSE
REPRESENTATION within the affidavit that the averments are based upon personal knowledge. A
second related problem is that the affidavits cleverly AVOID expressly mentioning any other written
documents which would give a defendant traction under the Best Evidence Rule. In short, by making
the perjurous allegation that the averments are based upon personal knowledge, while avoiding any
specifics that would help show the falsity of these averments, the plaintiffs have false evidence which
easily passes for valid evidence.
This results in occasional unfortunate rulings as in the Ohio case:
Chase Manhattan Mortg. Corp. v. Smith, APPEAL NO. C-061069, COURT OF APPEALS OF
OHIO, FIRST APPELLATE DISTRICT, HAMILTON COUNTY, 2007 Ohio 5874; 2007 Ohio
App. LEXIS 5156, November 2, 2007, Date of Judgment Entry on Appeal, THESE ARE NOT
OFFICIAL HEADNOTES OR SYLLABI AND ARE NEITHER APPROVED IN ADVANCE
NOR ENDORSED BY THE COURT. PLEASE REVIEW THE CASE IN FULL., Stay denied
by Chase Manhattan Mtge. Corp. v. Smith, 116 Ohio St. 3d 1473, 2008 Ohio 153, 879 N.E.2d
782, 2008 Ohio LEXIS 205 (2008). Discretionary appeal not allowed by Chase Manhattan
Mtge Corp. v. Smith, 117 Ohio St. 3d 1458, 2008 Ohio 1635, 884 N.E.2d 67, 2008 Ohio LEXIS
880 (2008)Related proceeding at Smith v. United States, 2009 U.S. Dist. LEXIS 18624 (S.D.
Ohio, Mar. 5, 2009).
*
This exposition was intended to show HOW and WHY these affidavits are inherently defective. In the
end, it is critical to prepare and file an effective defensive argument, ideally supplemented with a
defensive affidavit showing that the plaintiff’s affidavit appears to be perjured.
*
Make no mistake. We are talking about nothing short of epic national subornation of perjury by the
foreclosure mills. They prepare the affidavits for the robo-signer’s signature, fully KNOWING that the
affidavits are NEVER based upon the personal knowledge of the affiant, yet they plead these perjured
affidavits into evidence on a daily basis in every judicial foreclosure state. The attorneys at ALL of
these firms need to be disbarred. The lenders who rely upon these false affidavits need to be very
severely sanctioned!