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33. Does the investor have the right to foreclose?
The buyer's defense in the foreclosure action is that the investor is not the mortgagee and therefore has no right to foreclose.
The buyer made timely payments to the investor for two years but then defaulted on the loan. After the buyer failed to cure the default, the investor accelerated the debt and commenced a foreclosure action.
Six months later, the bank assigned only the promissory note to an investor. The assignment made no express reference to the mortgage and was not recorded in the public land records. The bank immediately sent the buyer a notice of the assignment, which provided the address of the investor and explained that the bank was no longer servicing the loan.
A buyer purchased a commercial building and financed the purchase by executing both a negotiable promissory note and a mortgage to the bank to secure repayment of the loan. The mortgage was promptly recorded.
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A is incorrect. This answer misstates the law. The assignment of the note automatically assigns the mortgage.
B is incorrect. A mortgage is not extinguished by a transfer of the note; rather, the assignment of the note also transfers the mortgage to the assignee.
D is incorrect. Transfers of a mortgage are not required to be recorded to be valid in a dispute between the mortgagor and the holder of the note. The investor is permitted to foreclose by virtue of being the assignee of the note.