Does a Lender Have to Own the Note in Order to Foreclose or Can They Just be the Holder of Note?

When homeowners borrow a mortgage loan to purchase a property, they sign both a mortgage (or deed of trust) and a promissory note. The promissory note (not the actual mortgage contract) is the document that contains the promise to repay the amount borrowed from the lender. The owner of that promissory note (Note) is the only party that technically has the legal right to collect the debt owed on the property if you don’t make payments.

If a homeowner has fallen behind in making payments to a lender, the lender does not necessarily have to own the Note to file suit against you. The holder of the note is also able to initiate a foreclosure proceeding. However, assignments or blank endorsements are required for a Holder of Note to have standing to foreclose. If the lender potentially pursuing a foreclosure against you only holds the Note, you may be able to defend your case if they cannot produce the proper assignment documentation or blank endorsement.

Assignments of Note track transfers of the servicing of the loan as well as ownership. If the Holder of Note cannot properly establish the assignment or endorsement, they may not have standing to pursue the foreclosure as they lack the ability to prove ownership interest in the property (remember, the owner is the party that is able to initiate a foreclosure, but if they have given ownership interest to another party, that party can also sue the homeowner now, as long as the documentation is proper). Even when the Holder of Note does not provide clear assignment or endorsement, they may still be able to sue for the debt on the owner’s behalf in the State of Florida, so it is important to have an attorney involved in matters concerning Holders of Note.

Potential foreclosures are one of the times that you need to seek professional counsel to help you navigate the precarious situation. Even the smallest risk of losing your home isn’t worth taking without having an attorney who regularly handles foreclosures assist you in fighting to save your home. If you are concerned about possible foreclosure proceedings, call now to speak to a qualified, experienced real estate attorney who will be able to evaluate your case and help you determine the best way to approach your particular case.

Stephen K. Hachey, a Florida foreclosure attorney, can help your wade through this process and determine a positive solution. Contact him at 813-549-0096.

The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.