Can I foreclose on a promissory note?

However, in California, the lender is not required to produce a Promissory Note to conduct a non-judicial foreclosure (also known as a “Trustee’s Sale”). The Promissory Note is the debt instrument, just like an IOU. The person holding the original is the one the borrower has to pay.

Can a mortgage note be used in a foreclosure?

This strategy depends on the lender’s not taking all the necessary steps to secure the original mortgage note, which carries your signature and those of any witnesses. If the mortgage was sold soon after closing by the original lender (a common practice), that note may not be in the second lender’s direct possession.

Do you need original notes to foreclose in New York?

Rather, the promissory note and occasionally the mortgage itself are those documents necessary to proceed with a foreclosure action in New York, and it is the lack of such original documents that may preclude a foreclosure action.

Can a person who was not the original holder of a promissory note foreclose?

If a lender who was not the original holder of your promissory note has initiated a foreclosure action against you, the lender must prove that it has standing to foreclose on your home in the place of the original lender. If they cannot do so, you may be entitled to have the complaint against you dismissed.

How does a court decide a foreclosure case?

It is up to the Court to determine whether the lender has satisfactorily proven why it no longer can produce the original note. The Court also has to be satisfied that when the original note was lost, the person trying to foreclose on the property had possession of the note at the time it was lost.

What happens if you can’t produce a foreclosure note?

When a lender can’t produce the original note, allowing a foreclosure to proceed puts the homeowner at risk of owing that debt again to another party in the future. Therefore, great caution must be taken before a judge can allow someone who can’t produce the original note to cash in on your home. What if Your Lender CAN’T Produce the Note?

What happens when a lender can’t produce the original note?

Everyone needs to understand the importance of this issue. When a lender can’t produce the original note, allowing a foreclosure to proceed puts the homeowner at risk of owing that debt again to another party in the future.

Can a foreclosure defendant challenge a promissory note?

Further, if the lender who initiated the foreclosure action is not the original lender, then the defendant can challenge the so-called “chain of custody” of the promissory note. This means that the lender must produce the chain of documents between itself and the original lender to prove that it indeed is the owner of the note.