Business Case Problem with Sample Answer—

Negotiation. Sandra Ford signed a note and a mortgage on her home in Westwood, New Jersey, to borrow

$403,750 from Argent Mortgage Co. Argent transferred the note and mortgage to Wells Fargo Bank, N.A., without indorsement. The following spring, Ford stopped making pay ments on the note. Wells Fargo filed a suit in a New Jersey state court against Ford to foreclose on the mortgage. Ford asserted that Argent had committed fraud in connection with the note by providing misleading information and charging excessive fees. Ford contended that Wells Fargo was subject to these defenses because the bank was not a holder in due course of the note. Was the transfer of the note from Argent to Wells Fargo a negotiation or an assignment? What difference does it make? If Argent indorsed the note to Wells Fargo later, would the bank’s status change? Discuss. [Wells Fargo Bank, N.A. v.

Ford, 418 N.J.Super. 592, 15 A.3d 327 (App.Div. 2011)] (See Trans fer of Instruments.)

—For a sample answer to Problem 19–5, go to Appendix F at the end of this text.