The New York State Court of Appeals decided in Aurora Loan Services, LLC v. Taylor that a foreclosing plaintiff only needs to show that it has possession of the note at the time the foreclosure complaint is filed. Thus, if the foreclosing Plaintiff has possession of the note, the mere fact that it does not have an assignment of mortgage is essentially meaningless. The mortgage is merely incidental to the promissory note and the mortgage naturally follows the note; hence, whoever has possession of the promissory note will be entitled to foreclose even if an assignment of mortgage is in a different entity.
Notwithstanding, the promissory note secured by a mortgage is a negotiable instrument and is governed by the Uniform Commercial Code (UCC).
UCC 3-202[1] provides: [n]egotiation is the transfer of an instrument in such form that the transferee becomes a holder. If the instrument is payable to order it is negotiated by delivery with any necessary indorsement; if payable to bearer it is negotiated by delivery (emphasis added).
Based on this requirement that the note be physically delivered, the foreclosing plaintiff must demonstrate that the subject note was physically delivered, and it will do this by typically submitting an affidavit by someone with knowledge attesting to the circumstances surrounding the delivery of the note. If the affidavit is not thorough enough then it may not serve as sufficient evidence to support the claim of possession and or delivery.
Typically, the note is transferred more than once and the foreclosing plaintiff will usually provide allonges to prove the chain of ownership. There are many technical issues that come into play with allonges, and if the foreclosing plaintiff is not careful, the action could be dismissed for lack of standing.
Always seek out the advice of an experienced foreclosure attorney before it's too late!
Notwithstanding, the promissory note secured by a mortgage is a negotiable instrument and is governed by the Uniform Commercial Code (UCC).
UCC 3-202[1] provides: [n]egotiation is the transfer of an instrument in such form that the transferee becomes a holder. If the instrument is payable to order it is negotiated by delivery with any necessary indorsement; if payable to bearer it is negotiated by delivery (emphasis added).
Based on this requirement that the note be physically delivered, the foreclosing plaintiff must demonstrate that the subject note was physically delivered, and it will do this by typically submitting an affidavit by someone with knowledge attesting to the circumstances surrounding the delivery of the note. If the affidavit is not thorough enough then it may not serve as sufficient evidence to support the claim of possession and or delivery.
Typically, the note is transferred more than once and the foreclosing plaintiff will usually provide allonges to prove the chain of ownership. There are many technical issues that come into play with allonges, and if the foreclosing plaintiff is not careful, the action could be dismissed for lack of standing.
Always seek out the advice of an experienced foreclosure attorney before it's too late!
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