Legal Question in Real Estate Law in California

There seems to be a belief that a lender cannot foreclose for noncompliance with the terms of a promissory note if it cannot physically produce the original of the note. I don't know the source of this legend, but it isn't true.

There are other ways in addition to production of the note. I believe one method provided by statute is for the foreclosing lender to post a missing-document bond.

Another wayis for the lender to foreclose judicially (in court), rather than by trustee sale. The lender's attoney will then put the defaulting borrower on the witness stand and have him or her admit under oath that he signed the note and accepted the loan money. The fact that the recorded deed of trust refers to the note is excellent evidence that a note once existed, so there is little opportunity for the borrower to lie under oath and get away with it.

Finally, there will be plenty of evidence of what the borrower owes the lender in the form of monthly loan statements from the lender to the borrower, supplemented by pictures of checks the borrower wrote to the lender prior to the default. All of this is satisfactory proof of an indebtedness secured by the property being foreclosed.