Promissory Notes

News & Analysis as of

Typo Disastrous for Lender

The United States Court of Appeals for the Seventh Circuit recently issued a harsh opinion for lenders in In re: David L. Duckworth. The case provides a startling example of the drastic consequences of failing to carefully...more

Employee Who Was Sued By Former Employer Collects $271,000 From Employer

PCGH sued its former employee, Thomas Keck, to collect on an unpaid promissory note. Keck defended against the action by claiming that any money he owed PCGH was offset by monies PCGH owed him for unpaid bonus and severance...more

An Unlikely Condition Precedent to Foreclosure in Florida

Mortgage servicers beware. Mortgagors in Florida are defending residential mortgage foreclosures based on the allegation that the servicer failed to give them notice of assignment of the right to bill and collect on the debt...more

California Employment Law Notes - January 2015

$300,000 In Punitive Damages Upheld In Sexual Harassment Case Despite Nominal Damages Award - State of Arizona v. ASARCO LLC, 2014 WL 6918577 (9th Cir. 2014) (en banc). Angela Aguilar who worked in a copper mine...more

Documentary Stamp Taxes: Enforcing a Promissory Note and Mortgage Prior to Payment

While failure to pay Florida’s documentary stamp taxes on a promissory note or mortgage can subject the offender to criminal and financial sanctions, the state’s courts of appeal are split when it comes to determining whether...more

California Foreclosure Law: California Supreme Court Grants Review Of The Keshtgar Decision

As reported in our blog article below, in June the Second District Court of Appeal held that California’s non-judicial foreclosure statutes do not grant a defaulting borrower the right to enjoin a foreclosure sale by alleging...more

Real Estate Tip: Foreclosure Confusion

The financial crisis has taught us a great deal about the mortgage transfer business, secondary markets and loan securitization. In the Spring 2014 issue of the Real Property, Trust & Estate Law Journal, Prof. Dale A. Whitman...more

The Second District Court of Appeals Holds That Due To Inconsistencies Between The Provisions Of A Promissory Note And A Deed Of...

Facts - U.S. Bank's predecessor bank extended a $62,000,000 loan (Loan) to three legal entities (Borrowers). The Loan was secured by a deed of trust on real property. Mr. and Mrs. Yashouafar (Yashouafars) guaranteed...more

Authenticating Loan Records From Prior Lenders

In special assets litigation, a bank offers into evidence its own loan records as well as the records of other lenders who previously serviced the loan. However, Florida courts treat these records as inadmissible hearsay...more

5th Circuit Affirms Look Through of Partnerships for Installment Sale Limitation

In Mingo v. Comm’r the 5th Circuit upheld a Tax Court decision and denied installment sale treatment to the extent the partnership interest sold related to underlying unrealized receivables. The taxpayer sold its interest in...more

Death By Typo: Seventh Circuit Confirms That Security Agreements Must Be Error-Free

The most common, or at least the most preventable, way for a security interest to perish involuntarily is a drafting error made by the author of the security instrument. The Seventh Circuit recently confirmed a security...more

Banks Beware! Parol Evidence May Not Correct Drafting Errors When Enforcing Security Agreements

Secured transactions typically include two key documents, which are often executed simultaneously: a promissory note memorializing loan and repayment terms executed by the borrower in favor of the lender and a security...more

Promissory Notes: Who are you Promising to Pay?

Promissory notes are often issued in the course of business arrangements and financial transactions to record indebtedness and financial obligations. People who use these instruments, however, should be aware of the...more

District Court Issues Crucial Ruling on Pennsylvania's Recording Statute

The U.S. District Court for the Eastern District of Pennsylvania has held that the failure to create and record written instruments evidencing assignments of mortgages and transfers of promissory notes secured by mortgages on...more

Real Property, Financial Services & Title Insurance Update: September 2014 #1

REAL PROPERTY UPDATE - - Foreclosure/Standing: to establish a prima facie case for mortgage foreclosure, successor mortgagor must introduce evidence it was in possession of original note with blank endorsement at time...more

Bankruptcy Court Holds That Secured Creditors Can Be “Crammed Down” With Below-Market Rate Replacement Notes

On August 26, 2014, in the case In re MPM Silicones, LLC, Case No. 14-22503 (Bankr. S.D.N.Y.) (“Momentive”), the United States Bankruptcy Court for the Southern District of New York held that secured creditors could be...more

Standing To Foreclose– Revisited

There have been several articles posted on this blog on the subject of standing – the legal right to enforce a promissory note and/or mortgage. This continues to be a popular issue for defense counsel to raise and, as a...more

Appellate Court Notes

AC35632- U.S. Bank, N.A. v. Foote - Second time is the charm. Defendant succeeded in getting plaintiff’s foreclosure action dismissed for lack of standing due to the inability of the witnesses to establish that the...more

Real Property, Financial Services & Title Insurance Case Law Update: June 2014 #1

Foreclosure/Surplus Funds: subordinate lienholder who failed to file claim to surplus funds with clerk within sixty days of foreclosure sale as required by section 45.031(7)(b), Florida Statutes (2010) not entitled to surplus...more

Guarantors Remain Liable Under Renewed Promissory Note, Even Absent Notice or Consent, Where the Modifications Are Not Adverse To...

In a prior post, we discussed a grantor’s continuing liability under a promissory note that is renewed without his notice or consent where the guaranty is a continuing guaranty, meaning it contemplates revisions or extensions...more

Plaintiff Has the Burden To Prove Its Right to Enforce the Note Even If It Is Not Challenged By the Defendant In Its Pleadings

The legal right to enforce, by judicial proceeding, a promissory note and mortgage is referred to as “standing”. This has been a hot topic in Florida foreclosure cases with courts holding that standing must exist when the...more

Guarantors Are Liable For Renewal Promissory Notes Executed Without Notice or Consent Even After Revoking Guaranty

Promissory notes are often renewed and extended without the express written consent of, or even notice to, the guarantors of the note. A guarantor, faced with changing circumstances and wishing to cut off his liability under...more

Courts Tackle Meaning of “May” Under the Finance Lenders Law

Section 22340(a) of the California Financial Code provides that a licensee “may sell promissory notes . . . to institutional investors.” Does this mean that a licensee may only sell promissory notes to institutional...more

Florida Appeals Court Affirms Dismissal Of State Qui Tam FCA Lawsuit Alleging Failure To Pay Stamp Tax Upon Assignment

On November 21, the Florida First District Court of Appeals affirmed the dismissal of a qui tam false claims act lawsuit against a lender, securitization trust, and MERS for the recovery of allegedly unpaid documentary stamp...more

Question Certified to the Florida Supreme Court: Can Lenders Cure Standing Defects?

Establishing standing—the legal basis of a plaintiff’s right to bring suit—to enforce a promissory note is a critical aspect of any foreclosure action. Florida case law requires that the party seeking to foreclose have...more

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