Lender Lost Promissary Note
My home is currently in the process of being foreclosed on. I am trying to sell it under a bank shortsale. Anyway in the legal paperword I received from the court it is stating that the lender can not find my promissary note. Isn't this a must have for them to do anything? Without that I would think they could not even prove I owe them anything at this point. If anyone has any knowledge of whether this matters or not, please let me know.
VERY basically, the mortgage liens the real estate and the Note is your personal promise to repay the money. In my state, they foreclose on the real estate and sue you on the Note simultaneously. Even without the Note, they still can come after the real estate. After the sale of the property, whether they could then collect any deficit balance without the Note I've got no idea.
Were they the first lien (mortgage holder) you received the mortgage for on this house? Or, did they sell to another mortgage co.? Did you check the County Clerk's Office to see if they filed it?
I don't have an answer for you... but just another story to add the the collection:
A few years ago, I had a Homeowner (potential short sale) whose very delinquent second mortgage loan was sold to another company.. via an assignment. The assignment of mortgage document was signed, and the original mortgage document was shipped to the new mortgagee.
Guess what? The new mortgagee rejected the assignment and sent everything back.... but it was lost.
The original mortgagee's records indicate that they no longer owned the loan for it had been assigned.... but the new mortgagee claimed that they never owned the loan and therefor, couldn't discharge what they didn't own.
And how did you resolve this matter?
If they cannot find the promissory note - did they file a mortgage with the clerk originally?
The mortgage has been sold a few times. The original mortgage was filed. What is funny too is that my 2nd mtg with Bank 1 which is delinquent has in the last month been sold to another company. Not sure how BK1 can do that.
I don't see how a judge could award a judgment to the foreclosing lender if they can't show that the borrower is in default.
My advise as a layman would be to file an answer to the foreclosure petition denying all claims. I would have the borrower have an attorney do this.
I doubt they will get out of paying but it may be able to delay things long enough for you to work something out.
GOOD LUCK
SSP,
I'm also interested to know how you resolved this matter.