What happens if the bank can't produce the note upon PAYOFF?

[Klukie]

My original lender sold my loan to another a few years back without anything more than a letter 10 days before it happened (Which I thought was bullcrap). I have never been behind in my mortgage...but if they have no note to produce when I pay it off ..what happens then?

[tridim]

1. Find out now. www.wheresthenote.com

Don't wait.

A lawyer on MSNBC the other day said NOBODY knows who actually owns any real-estate purchased or refinanced since 1980.

[CurtEastPoint]

2. I think the proper site is...

http://action.seiu.org/page/speakout/wheresthenote

[tridim]

4. Thanks, changed to www.wheresTHEnote.com

[aquart]

3. The site is tracking dollar bills? What am I missing?

[jtuck004]

5. http://www.wheresthenote.com/

http://www.wheresthenote.com/

This sends you to the site CurtEastPoint mentioned above

[Klukie]

6. Thanks you all..but I guess what I am asking is...

what are my current obligations to the lender if they don't have a note to give me when my obligations are fulfilled?

[TNDemo]

7. I got my mortgage with my bank seven years ago.

They have never sold me. Should I have any concerns about who owns the note??

[dixiegrrrrl]

8. If they never sold the mortgage, you are ok.

For peace of mind, go in and ask them.

There ARE some bank loans that were not part of the securitization game. You may be lucky enough to have one.

[Po_d Mainiac]

13. Why do you think your note has not been sold?

Yes you should be very concerned who holds your paper..If your loan is for more than 10yrs, the odds of the bank that originated the note, still holding it are very small.

Just because you send the check to the bank that originated the loan does not insure that they are not just the servicer now.

[truedelphi]

15. + 1. n/t

[dixiegrrrrl]

9. A few people have said on web blog comments they had that problem.

Which is why there is a mass produce the note movement.
What I read on other sites essentially was this:

If you can get a good lawyer to help you write a letter to ask for the note ( be sure to send it registered and get a signature back)
then some courts are working with people to establish a court account for the mortgage payments until lack of note is determined, at which time you are out from under the mortgage. ( quiet title, I think I heard it is called).
But...you still are bound to an unsecured promissory note to pay the money back to ....someone.
The house just stops being part of the deal.
First step is find a damn good real estate lawyer.
Better to find out now than 20 years down the road.
( I am not a lawyer and this is not legal advice)

[704wipes]

10. yes, but then couldn't one do this

I do remember the promissory note being part of the mortgage, never realized that it was in case the property ever became unhinged as security for the loan. But, if you got to this point couldn't you say screw it, I have the title to the house. I default on the promissory note, fuck you ! (to whomever claims to be owed on the promissory note?)

[dixiegrrrrl]

11. Yep, you can.

Worse case scenario, they sue you, put a lien on the house or something.
but....if they sue, then you get to find out if they have the paperwork to prove ownership.
again the question becomes, WHO is entitled to the money you are supposed to pay?

IRS might look askance at the result of getting out of a mortgage, tho.
I hear they tax the difference between actual mortgage and sort sale income.

[pokercat999]

12. Hmmmmm...let me see, pay the mortgage $334,897.00

($698,000 with interest) or pay the IRS 35% of $334,897.00? I do like to pay my taxes.

[Po_d Mainiac]

14. No

The IRS will whack you for the difference if it's a short sale...If you pay off the note it does not change your tax status other than the interest deduction on your 1040.