The foreclosure defense strategy of producing the original promissory note in California is the subject of this article. Will requiring a lender or loan servicer to produce the original promissory note as a foreclosure defense strategy work in California? In almost all cases, the answer is no. The main reason the original promissory note is not required is that California is a non-judicial foreclosure state. At least most foreclosures in California are not judicial.
Production of the original promissory note would be required in a judicial foreclosure in California, as the court clerk must manually cancel the original promissory note when entering the foreclosure decree.
Non-judicial foreclosure under a deed of trust is governed by the provisions of California Civil Code section 2924, which provides in pertinent part that a “trustee, mortgagee, or beneficiary or any of their authorized agents” may carry out the foreclosure process”.
California courts have held that the provisions of the Civil Code “cover all aspects” of the foreclosure process and are “intended to be comprehensive.”
Anyone who is under the impression that the “show me the note” defense will work in California should consider the information contained in this article. In California, the lender or other business listed in Civil Code section 2924 is not required to produce a Note to perform a non-judicial foreclosure, also known as a Trustee Sale. This is due to the fact that the power of sale comes from the Deed of Trust, NOT the Note.
Anyone who uses the promissory note defense risks not only losing in court, but also losing the opportunity to present some sort of valid defense to the judge that might convince them to at least grant a temporary restraining order to delay the sale of foreclosure. .
Several United States District Court cases from various districts located in California have stated that there is NO requirement under California law to produce the original notice in order to proceed with a non-judicial foreclosure. And the company that started the foreclosure proceeding can always post a bond to get around any issuance of a lost bill.
Another key issue to keep in mind is that many judges are not very sympathetic to the technical challenges of a foreclosure, particularly when it is clear from the complaint and other documents filed with the Court that the borrower is delinquent on the loan. . In fact, when reviewing many of the more recent court cases, both in the California Courts and in the United States District Courts, the fact that no document filed either in the original case or in the appeal dispute that the homeowner is not in default is mentioned prominently in the decision.
Subsequent articles will discuss some other common misconceptions regarding California foreclosure defense strategy.
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stan burman