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Tuck66 · Apr 27, 2013, 08:03 AM

First I'm not in foreclosure just confused. My husband and I are trying to refi our home at a much lower interest rate but the bank with our original loan can't find that there was ever a note or if there was they've lost it. What should we do

JudyKayTee · Apr 27, 2013, 08:14 AM

I don't understand - you are selling your house and charging a lower rate of interest than the mortgage currently carries?

Or something else - ?

A Mortgage is public record. Did anyone check with the County Clerk?

How do you know what to pay if there's no note?

Tuck66 · Apr 27, 2013, 08:24 AM

I guess that the point right now. The new mortgage company wants the note to complete the refi and the old mortgage company has been searching for it for the last two weeks. So far the only thing they have produced is a copy of paper on the ownership of my 03 Tahoe, which also has me confused. How would they get that and why would they have it?

JudyKayTee · Apr 27, 2013, 08:25 AM

I have no idea why the mortgage company would have a copy of your car loan papers (or something) but not the mortgage papers.

At any rate, the County Clerk would have the Mortgage on file.

Tuck66 · Apr 27, 2013, 08:25 AM

Originally Posted by JudyKayTee

I don't understand - you are selling your house and charging a lower rate of interest than the mortgage currently carries?

Or something else - ?

A Mortgage is public record. Did anyone check with the County Clerk?

How do you know what to pay if there's no note?

Just lowering interest rate but with a new company

Tuck66 · Apr 27, 2013, 08:29 AM

Originally Posted by JudyKayTee

I have no idea why the mortgage company would have a copy of your car loan papers (or something) but not the mortgage papers.

At any rate, the County Clerk would have the Mortgage on file.

The new mortgage company is telling us if they can't produce the note we can just quick claim it. I'm so confused None of this makes any sense. The new company won't proceed without the note.

AK lawyer · Apr 27, 2013, 08:42 AM

Originally Posted by Tuck66

The new mortgage company is telling us if they can't produce the note we can just quick claim it. I'm so confused None of this makes any sense. The new company won't proceed without the note.

The term is "quit claim". A quit-claim deed is a deed in which the grantor does not warrant that it has title. That, in the context of your issue, makes no sense at all. Are they asking the "old" mortgage company to quit-claim to you any interest (such as a mortgage) they may have?

The mortgage would be recorded. The mortgage note would not be. Mortgage obligations such as yours are bought and sold by financial institutions all the time and frequently the original notes get lost. Ask the "old" mortgage company to explain why you should continue to pay you anything if they cannot prove you owe it.

Tuck66 · Apr 27, 2013, 08:58 AM

Originally Posted by AK lawyer

The term is "quit claim". A quit-claim deed is a deed in which the grantor does not warrant that it has title. That, in the context of your issue, makes no sense at all. Are they asking the "old" mortgage company to quit-claim to you any interest (such as a mortgage) they may have?

The mortgage would be recorded. The mortgage note would not be. Mortgage obligations such as yours are bought and sold by financial institutions all the time and frequently the original notes get lost. Ask the "old" mortgage company to explain why you should continue to pay you anything if they cannot prove you owe it.

In that case if they can't produce the note showing I owe them something then what? I just stop paying them that does make sense to me either. Can they foreclose on me then? Mostly I just want to get this refi done I mean my new interest rate is more than half of the original one and at this point I'm worried they're jeopardizing that.

AK lawyer · Apr 27, 2013, 11:24 AM

Originally Posted by Tuck66

In that case if they can't produce the note showing I owe them something then what? I just stop paying them that does make sense to me either. Can they foreclose on me then? Mostly I just want to get this refi done I mean my new interest rate is more than half of the original one and at this point I'm worried they're jeopardizing that.

The law firm for which I work does mostly mortgage foreclosure litigation. Yours is what we call a "lost note" case. This means that the original note has been misplaced. Chances are that they have a copy of the note. If that's the case, and if the law in your jurisdiction is similar to what it is in this state, they could probably establish that you signed and owed the note. They could sue you for the balance due. Assuming that the mortgage has been recorded (highly probable), they could also foreclose. The only problem they would have is that they would not be able to obtain a deficiency judgment against you.

A mortgage note is a negotiable instrument. It's like a check, endorsed by the payee. Anyone who finds it can, in theory, cash it or, in your case, seek to foreclose the mortgage.

I suggest that you seek advice of legal counsel in your jurisdiction so as to avoid jeopardizing the re-fi. The "old" mortgagee should be willing to post a bond to indemnify you and the "new" mortgagee in the event the lost note later turns up.

ScottGem · Apr 27, 2013, 11:45 AM

This also doesn't make sense to me. The mortgage is recorded as a lien against the property. When you refi there will be a "closing". At the closing, the new lender issues a check to the current lender for the payoff balance. They will get a balance figure from the current lender. The current lender then issues a satisfaction letter (which you need to keep safe). There is no need for a copy of the note.