Mortgage Servicing Fraud
occurs post loan origination when mortgage servicers use false statements and book-keeping entries, fabricated assignments, forged signatures and utter counterfeit intangible Notes to take a homeowner's property and equity.
Articles |The FORUM |Law Library |Videos | Fraudsters & Co. |File Complaints |How they STEAL |Search MSFraud |Contact Us

Some friends and I were having a discussion on promissory notes as related to foreclosures.  What happens to the promissory notes (fake copy or original) after the homeowner looses the house to foreclosure?  Shouldn't the promissory note be returned to the former homeowner?  Also when you refinance your loan, what happens to the promissory note from the old lending institution?  Shouldn't they be returned to the homeowner?   In other words what happens to these notes?  Can the homeowner ask for these notes?  And would the homeowner ever get them? 

Quote 0 0
William A. Roper, Jr.

Quote:
kmd said:

Some friends and I were having a discussion on promissory notes as related to foreclosures. What happens to the promissory notes (fake copy or original) after the homeowner looses the house to foreclosure? Shouldn't the promissory note be returned to the former homeowner? Also when you refinance your loan, what happens to the promissory note from the old lending institution? Shouldn't they be returned to the homeowner? In other words what happens to these notes? Can the homeowner ask for these notes? And would the homeowner ever get them?


Upon rendition of judgment in a judicial foreclosure, the original promissory note should be surrendered to the Court in most jurisdictions.  On the other hand, this is rarely enforced and most Judges are unaware that this should be done.

Borrowers who fail to appear and defend would never be in a position to insist upon it.  And even reasonably experienced foreclosure defense attorneys seem to be unaware that they should demand the production and surrender of the original.

*

When a borrower pays off a loan through a refinance or sale of the property, the borrower should insist upon the retrurn of the original promissory note.  Some reputable Lenders will return the note.  However, very often if the borrower doesn't demand it, the note is never returned.

*

One reason that Lenders are reluctant to deliver the original promissory note upon rendition of judgment is that production of the original sometimes shows that the plaintiff pled a forged allonge to falsely represent to the court the indorsement of the instrument.
Quote 0 0
Cindy
Here are a couple of interesting details about those original notes (and mortgages):

"Moreover, in the case of original mortgages and promissory notes, they are not merely exhibits but instruments which must be surrendered prior to the issuance of a judgment.  The judgment takes the place of the promissory note. Surrendering the note is essential so that it cannot thereafter be negotiated.  See Perry v. Fairbanks Capital Corp., 888 So.2d 725, 726 (Fla. 5th DCA 2004). 

The judgment cancels the note.  The clerk cannot return these instruments to the parties."
Johnston v. HUDLETT, 32 So. 3d 700 - Fla: Dist. Court of Appeals, 4th Dist. 2010

http://scholar.google.com/scholar_case?case=16286314085740795504

My question is whether these notes are retained to fill the coffers again...negotiated (delivered) again. How would anyone know? It's just fishy to me that we have a deluge of lost note affidavits, despite FNMA claiming it has a limit to the percentage of lost notes allowed. Who monitors that? Who knows when that one certain note is the last one allowed?

We all know the answer to these questions.

Quote 0 0
Write a reply...