Quote:
Originally Posted by Dueller
Jurisdictions vary but as a general rule, the note itself is not filed in public records. Typically you have the instrument of conveyance; i.e., the Warranty deed and the instrument of encumbrance; i.e., a mortgage or deed of trust. These are filed as public records to show a) you have the right to the property (deed) and that b) it has a lien/encumbrance on it (deed of trust) by your lender so you can't sell it without the lien for the note following it.
The deed of trust essentially deeds the property back to a trustee for your lender that has the right to foreclose on behalf of the lender if you don't make your payments according to the terms of the note. These terms are typically stated in the deed of trust but they are not the note itself. When a foreclosure occurs the trustee gives a Trustee's deed either to the buyer at foreclosure or the bank if there are no buyers or the bids are too low. Typically a bank will enter the first bid as the amount due and owing on the note.
So I can see where this would be a ploy to stall a foreclosure in light of the fact the note, as a negotiable instrument (i.e.; it can be bought and sold), could have gone thru mul;tiple owners. Each time that happens, the deed of trust should be updated in the public records to show who the note is assigned to....that is where you really can cause some confusion/delays. For example: I take out a note with Bank A who sells it to Bank 2 who sells it to Bank C who sells it to Bank IV....if Bank iv COMES TO FORECLOSE, THEY BETTER BE ABLE TO SHOW how they ended up with owning your note by the puiblic records. Most of them do a good job, but sometimes not.
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You've done a better job than I explaining it. And,of course, you're correct about how the system works in CA. So, I missed a few details. But, I'll bet "Bank IV" has got their ducks in a row, in 99% of the cases.
The only original note I've ever recovered is when I refinanced a loan that I had set up myself for collection at a local bank. The first lender was private. On other refi's, I got copies of the paperwork signed by the county. Never got an original note back except as mentioned. I also got a new document for the pay off they call reconveyance, which was recorded.