earticle

영어

A holder in due course under the Uniform Commercial Code (hereinafter, “UCC”) § 3-302 is a person who acquires a negotiable instrument for value, in good faith, without notice that it is overdue, dishonored, or that any person has any claim or defense, and the holder in due course is protected by UCC § 3-305 from most claims and defenses. Through this protection of the holder-in-due-course rule, however, in the structure of the home mortgage lending market, predatory lenders have been able to avoid the risk of harm created by mortgage borrowers, 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’ practices. This article raises a fundamental policy question: is there reason to support the continuing availability of the holder-in-due-course protection for assignees of home mortgage notes in the U.S.? The answer can be approached form many perspectives, including historical, economical, and political. This article approaches the answer form the historical perspective. In order to find some new suggestions for the Korean legal regimes and relevant studies, first of all, this article reviews the legislative history of the holder-in-due-course rule and the underlying concept of negotiability under UCC. Additionally, this article analyzes the legal changes regarding the protection afforded to holders in due courses in consumer goods transactions and in estate transactions. Then, this article comes to the conclusion that the policy justifications, the parties. and the market circumstances for negotiable instruments have changes, therefore, Korea needs deeper studies on the holder-in-due-course rule to reflect the reality.