Legal Question in Real Estate Law in California

California UCC � 9-318(a) says: "A debtor that has sold an account, chattel paper, payment intangible, or promissory note does not retain a legal or equitable interest in the collateral sold."

My question is, who is the debtor that � 9-318(a) is referring to? It can't be the homeowner, who doesn't possess the note and who would be far better advised to shred the note than to sell it. But rather, is it referring to the party that used to be the lender and is now a servicer, expected to pass the payments on to the new creditor after selling the note? Thanks.


Asked on 8/21/09, 6:18 pm

1 Answer from Attorneys
Bryan Whipple Bryan R. R. Whipple, Attorney at Law

For some reason, we are getting duplicate postings of user questions. I just answered what seems to be the same question. Just in case, let me summarize: Division 9 of the UCC does not apply to real property transactions or lending. There are a few very limited-scope exceptions, but this section is not one of them.

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Answered on 8/21/09, 7:07 pm


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