CopyPublished | Florida 4th District Court of Appeal | 2017 WL 2569781, 2017 Fla. App. LEXIS 8667
...Under either possibility, Wells Fargo was entitled to cancel the indorsement. First, the most likely scenario is that because it had possession of the original note, Wells Fargo reacquired the note from Fannie Mae, “by negotiation or otherwise.” § 673.2071, Florida Statutes (2014). As a former holder of the note, Wells Fargo was entitled to cancel in-dorsements made after it first became a holder of the note. This is the procedure authorized by section 673.2071: ' Reacquisition.—Reacquisition of an instrument occurs if it is transferred to a former holder, by negotiation or otherwise....
...If the cancellation causes the instrument to be payable to the reacquirer or to beai*er, the i-eac-quirer may negotiate the insti-ument. An indorser whose indorsement is canceled is discharged, and the discharge is effective against any subsequent holder. *659 Id. As the Uniform Commercial Code Comment explains, the section
673.2071 procedure is an exception to the rule in section
673.2051(1) that the person identified in a special indorsement must indorse the note to allow a later transferee to acquire the status of a holder: Reacquisition refers to cases in wh...
...The latter case is an exception to the general rule that if an instrument is payable to an identified person, the indorsement of that person is necessary to allow a subsequent transferee to obtain the status of holder. Uniform Commercial Code Comment to Section 673.2071 (italics supplied). The Comment explains that section 673.2071 implements “a rule of convenience” which relieves the reacquirer of “the burden of obtaining an indorsement, that serves no substantive purpose. The effect of cancellation of any,, indorsement under Section [673.2071] is to nullify it.” A second potential scenario is that World Savings Bank never transferred the note and that the special indorsement was placed on the note by mistake....
