Legal Question in Real Estate Law in California

Re: Bankruptcy and Mortgage

As a follow-on to Attorney Whipple's post, he is correct in that the "produce the note" defense has limited applicability in California. In Bankruptcy, however, it is a question of the Federal Rules of Evidence - who actually owns and posseses the note; and as I understand it, that is where to some degree they have been successful. I'm not clear, however as to what this has to do with your discharge? Your discharge will come shortly after the bar date for objections to discharge or complaints to determine non-dischargeability - usually 60 days after your meeting of creditors. The entry of your discharge, however, can be held for a few reasons. First, a complaint to determine non-dischargeability has been filed and no order entered by the court; or an objection to your discharge has been filed by a creditor or the Trustee or the US Trustee's office. You need to check your court file and see what is holding it up. A motion for relief from stay generally won't stop the discharge from being entered.

*Due to the limitations of the LawGuru Forums, The Gibbs Law Firm, APC's (the "Firm") participation in responding to questions posted herein does not constitute legal advice, nor legal representation of the person or entity posting a question. No Attorney/Client relationship is or shall be construed to be created hereby. The information provided is general and requires that the poster obtain specific legal advice from an attorney. The poster shall not rely upon the information provided herein as legal advice nor as the basis for making any decisions of legal consequence.

Re: Bankruptcy and Mortgage

I know that in some states foreclosures have been held up by the borrower/debtor demanding that the foreclosing creditor produce the original note. I have done a little research on California law, and I don't think the "lost-note defense" is going to be much help here. Some of the reasons:

1. A party claiming to be the creditor on a lost note can post a bond.

2. Production of the original note may not be necessary. A copy will suffice.

3. The debtor cannot honestly deny the making of the note or his obligation to pay someone. If done in court, it would be perjury.

4. The existence and other terms of a note or other forms of instruments can sometimes be proven to the satisfaction of the court by other evidence even when the original is lost.

5. The legal need for the note may be overestimated. Neither foreclosure trustees nor bankruptcy judges necessarily need to see original instruments in order to carry out their duties.