Foreclosure When the Original Note Was Lost

Eric Lanigan, Winter Park, Florida, foreclosure lawyer talks about cases where the bank claims in the foreclosure action that it doesn't have the original note because it was lost.

Often, the bank will say the note really wasn't lost, that it was destroyed or misplaced in the securitization process.

First: Where is the Note?

The reality is it doesn't really matter if it was destroyed because under the Florida statute that deals with establishing the validity of a lost instrument, the note can either be destroyed or it can be a situation where the whereabouts are just unknown.

It can be a situation where the whereabouts are unknown but in the possession of someone who shouldn't have it and refuses to relinquish it. So you can have anyone of those situations and it falls under the lost note statute. So you have to prove one of those things to begin with.

Second: Proof the Note Wasn't Transferred 

The second thing that the bank has to prove is that the note was not transferred by the person who last had lawful physical possession of the note to somebody else. This is significant when the copy of the note, which theoretically the lender does have in a foreclosure action, but they just can't produce the original. 

It may show that it was a blank endorsement. In other words the endorsement just says, “pay to the order of” and then, it's a blank and then the original lender has signed it.

Third: What are the Terms of the Note?

The third thing that the bank must establish-- it's a multi-part third element--is what are the terms of the note. In other words, how much is it for? What's the interest rate and what's the payment schedule?

They have the right to enforce the note. In other words, one of those other things has not occurred. That there wasn't a lawful transfer of the note by someone in possession before it allegedly was supposed to be transferred to the bank now seeking to enforce it.

Prove One, Two, Three

The bank has to prove all three of these elements proving competent evidence through documents and testimony that comply with the rules of evidence.

If you get served with foreclosure papers or you've got a pending foreclosure and there's a count in there to establish a lost note, you need to get to someone who's competent in the rules of evidence and how to cross examine people in court.

Lanigan and Lanigan. Experienced attorneys with a personal touch. 407-740-7379