Q: Can equity lender foreclose on property, original mortgage is current, equity lender lost promisary note
Our primary mortgage is current, our equity loan is in default, can equity lender have lost the promisary note, can they foreclose?
A:
If the equity lender has all of its paperwork in order, it may foreclose. Many times they will not in a down real estate market as the primary lender gets paid first from the foreclosure sale.
Lost notes are getting to be less common. There are ways for lenders to avoid the difficulties arising from lost notes.
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