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영어

In the U.S., securitization of residential home loans have dramatically changed the operation of the home mortgage market. The recent turmoil in the home mortgage market has enlivened discussion of the assignee liability of the owners of home mortgage loans, arising from the activities of the originators of home mortgage loans. One topic in these discussion is the holder in due course rule. Under Article sec. 3-302 of the Uniform Commercial Code (hereinafter "UCC"), this rule insulates some assignees from borrowers' claims and defenses to payment. Generally speaking, under the UCC, a holder in due course is a person who acquires a home mortgage note for value, in good faith, without notice that it is overdue, dishonored,
or that any person has any claim or defense. The holder is protected by the UCC from most claims and defenses that mortgage borrowers can assert to avoid paying on the promissory note. Through this protection of the holder in due course rule, however, predatory lenders have been able to avoid the risk of harm created by those lenders and investors in the securitization market have been able to assign almost all such risk to the homeowners who are the victims of the predatory lenders's practices. This article tries to understand how predatory mortgage lending has become so rampant in the U.S. and to find suggestions for Korean lending industry and relevant legal regimes regarding the holder in due course rule.