Traditionally, lenders used promissory notes to evidence (i.e., to legally document) their loans and borrowers’ obligations to repay them. Often there is no legal requirement that a promise to pay be evidenced in a promissory note, nor any prohibition from including it in a loan or credit agreement.
Is there a difference between a mortgage and a note?
The main difference between a promissory note and a mortgage is that a promissory note is the written agreement containing the details of the mortgage loan, whereas a mortgage is a loan that is secured by real property. You may also hear a mortgage called a home loan. These terms all mean the same thing.
Can a bank foreclose on a mortgage without a note?
Usually the bank has only an old photocopy of the Note. But, if you are not represented by an attorney, the bank can foreclose without even a paper towel, and it certainly can do so without a Note. If foreclosure were impossible without a Note, most foreclosures in America could not occur, and the banks would be ruined.
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.
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 foreclosure if there is no proper assignment of mortgage?
In some cases though, the absence of a proper assignment of mortgage will not stop a foreclosure. If the foreclosing party is clearly entitled to enforce the promissory note secured by a mortgage, the court may allow a foreclosure to proceed even if there is no written assignment because of the general rule that “a mortgage follows the note.”
