Does the Mortgage Follow the Note or Vica Versa?

The key to all successful foreclosure defense strategies is to test the facts instead of assuming you know.

Most people have their eyes glaze over as soon as you start talking about this. Does the mortgage follow the note or does the note follow the mortgage? The real  question in the minds of nearly every layperson, lawyer, and judge is “who cares?” But because everyone wants to seem as though they are informed and nobody wants to look silly they pretend to know what this is all about and then litigate, judge or rule based upon a set of assumptions that are hidden out of sight and which are wrong.

At the base of this issue, which is extremely important to understanding the legal rights and obligations of parties, is the undeniable fact that in our system of law there are vast legal differences between debts, notes, and mortgages. All three are legal fiction but nearly everyone ignores that simple fact.

As a result, nearly everyone refers to the so-called transaction with homeowners as a loan, debt, note or mortgage as though all those terms were interchangeable. And they ARE interchangeable in everyday conversation because everyone is referring to the same thing.

But when you go to court, failure to recognize the legal differences between those terms will often result in a homeowner making admissions of fact and law that are wrong. Law is entirely about the codification of rules governing behavior, not thoughts. If you think about killing someone you are not violating any law unless you act on it.

In theory all law regarding loans, debts. notes and mortgages are about behavior, not thoughts. But when we get confused, we start arguing law as though it is about thoughts and not behavior.

So in a foreclosure, the object is to recover losses on an unpaid debt owed to the person or entity that is losing the money because of a missed scheduled payment by the homeowner. And because some company is claiming the homeowner has missed a payment and is threatening foreclosure, homeowners almost always revert to the thought that they have a loan,  they failed to make a payment and the company claiming rights to collect and enforce has every right to do so.

By focusing on their own private thoughts rather than practicing what President Reagan called “trust but verify.” Homeowners miss the entire point of foreclosure in the context of claims of securitization. And they proceed to default or lose cases in court because they have a thought in their head that does not match the facts.

My analysis of successful foreclosure defense strategies reveals one simple fact: they all refuse to admit anything and they persist in testing each supposition advanced by the foreclosure mill.

So the “loan”is basically a legal and factual conclusion rather than an actual legally recognized event or behavior in the real world. It means a transaction in which someone loaned you money. That means that the person or entity that gave you the money intended to get a promise from you to pay back the money and that they had the intent to create a loan receivable account.

  • If they didn’t have that intent (regardless of YOUR intent) then the payment is something other than a loan; you should not be thinking that it was a loan just because that is what you asked for.
  • Consumer litigation is filled with debris from what consumers thought they were getting versus what they actually received.

An obligation is what legally arises when you receive money. In order to form a complete enforceable transaction, you must agree to provide service, payments, or property in exchange for the money. The obligation arises regardless of whether any document was prepared, executed or signed.

The debt arises when the law says that there is a debt That means there is some act (behavior) that can be or is memorialized in writing that describes the obligation. In the case of homeowners, the debt is described in a promissory note; contrary to the nearly universal error committed by judges, lawyers, and lay people, the note is not the debt (it a description of the debt).

The note is a description of the debt and the terms for repayment. If the note does not describe or otherwise relate to an actual transaction in which the maker (homeowner) received money from the Payee (or an agent of Payee) then the note describes a debt and obligation that does not exist.

  • This is important for the doctrine of merger of the debt and the note to occur to prevent double liability — once for the debt and once for the note. So the note, to be truly legally effective, must describe the outcome of actual behavior in the real world. If it doesn’t, then there is no doctrine of merger because the note is not describing any actual debt or obligation existing between the homeowner and the Payee on the note.
    • By definition, merger does not apply when the presumed obligation is not related to the Payee on the promissory note. therefore any attempt to enforce the note is NOT an attempt to collect on an obligation.
  • While there are some restrictive circumstances where the note could be enforced anyway, none of them apply to foreclosures because the law in every U.S. jurisdiction insists, as a condition precedent to enforcement, that the claimant has paid value for the underlying obligation (see above).
    • In the context of securitization, this basic element is never present and any allegation, assertion, argument or implication to the contrary is simply untrue.
    • However, if the allegation or implication is present in the court record, failure to test, challenge and object will result in a court ruling that is based upon the presumption that there is an obligation, debt and note that currently exists and which is enforceable.
    • This is not court bias as many suggest. it is the law of procedure. In any organized society there must be rules and the courts are requried to follow them.

The mortgage is a document that is generally described as ancillary to the obligation, debt, and note. But it is generally intended to be included when the word “loan” is used. It is not the obligation, debt, or note. It is a separate agreement stating that if the terms set forth on the note are breached in a specific manner, then the mortgage agreement (deed of trust in non-judicial states) may be used to pursue a forced sale of homestead property to cover or mitigate any losses sustained by the Payee who is also mortgagee or a person or company who has purchased, for value, the title to an existing loan receivable and who has received an assignment of the mortgage agreement.

  • In nearly all jurisdictions, there is a presumption (i.e., “thought”) that an assignment and delivery of the promissory note means that title to the obligation and debt has been transferred and that compliance with Article 9 §203 UCC has therefore occurred.
  • Because of the custom and practice of destruction of the original promissory notes concurrent with the apparent closing of so-called “loan” transaction, foreclosure mills and their clients have taken to replicating them through electronic and/or mechanical means or by claiming them lost.
    • Most allegations of receipt, possession or control over the original promissory note are false. But the presumption is otherwise, which takes us back to the necessity of testing, challenging, and objecting to evidence in a persistent, aggressive manner.
  • Confusion as to the legal status of a mortgage has led to bizarre court rulings that create, for example, an entirely new statute of limitations on the claim to force the sale of the property to pay off the claimed debt.
    • In Hawaii, for example, the courts are now attempting to apply the adverse possession statute (20 years before the claim can be brought) to the collection on a debt or note (6 years).
    • The mortgage is not an instrument that creates or describes the obligation or debt. It does not create the terms of repayment or set the amount to be repaid.
    • In attempting to protect the banks claiming relief in wrongful foreclosure claims, the courts are inventing doctrines that are already causing confusion in a marketplace where certainty is king and uncertainty is to be avoided at all costs. The treatment of a mortgage as the debt, obligation or note for any purpose creates that confusion.

So the moral of the story is that if homeowners want to successfully defend foreclosures, they must pay attention to details in life (behavior), substantive law (what is required) and procedural law (how disputes are settled with finality).

The article below discusses one aspect of this entire area of law — the question of whether the note follows the mortgage or the mortgage follows the note.  for the past 25  years the real answer has been that neither one applies.



It is generally the rule in Florida that the transfer of a mortgage note transfers with it the related mortgage. The mortgage note is regarded as the principal item with the mortgage being regarded as a mere accessory. 6 Fla. Jur. 2nd, Bills and Notes, Section 123. Hence the adage “the mortgage follows the note.” . The Restatement (Third) of Property provides in  Mortgages section 5.4(a) (1997) that “[a] transfer of an obligation secured by a mortgage also transfers the mortgage unless the parties to the transfer agree otherwise.”  Florida law is apparently in accordance with the Restatement. The stated objective of the Restatement is to avoid economic waste to the lender and a windfall to the borrower if the note and mortgage are split rendering the mortgage note as a practical matter unsecured. The Restatement cites the case of Carpenter v. Longan, 83 U.S. 271 (1827) which held that “[a]ll the authorities agree that the debt is the principal thing and the mortgage an accessory.”

The Restatement’s exception provides that a transfer of a mortgage note is possible without the transfer of the mortgage if the parties so agree, but the effect of such a transfer would be to make it impossible to foreclose the mortgage unless the transferor of the mortgage note is made the assignee’s agent or trustee with authority to foreclose on the behalf of the assignee of the mortgage note.

Assignment of the Mortgage

The opposite situation is presented if a mortgage is transferred without the transfer of the mortgage note. The apparent rule in Florida is that an assignment of a mortgage without an assignment of the related mortgage note is deemed a nullity and creates no right in the assignee because a mortgage is a mere lien incidental to the obligation it secures. 37 Fla. Jur. 2nd, Mortgages, Section 511. See e.g., Sobel v. Mutual Development, Inc., 313 So.2d 77 (Fla. 1st DCA 1975). Vance v. Fields, 172 So.2d 613 (Fla. 1st DCA 1965).

(305) 891-4055 – Jordan E. Bublick is a Miami Bankruptcy Lawyer with over 25 years of experience in filing Chapter 13 and Chapter 7 Bankrkuptcy Cases.


Nobody paid me to write this. I am self-funded, supported only by donations. My mission is to stop foreclosures and other collection efforts against homeowners and consumers without proof of loss. If you want to support this effort please click on this link and donate as much as you feel you can afford.
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Neil F Garfield, MBA, JD, 74, is a Florida licensed trial and appellate attorney since 1977. He has received multiple academic and achievement awards in business and law. He is a former investment banker, securities broker, securities analyst, and financial analyst.

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2 Responses

  1. Sounds like this could be a big cause of title issues. Only the “mortgage” is satisfied, cancelled, or discharged of Record, and only by the “Lender.” The note is supposed to be returned stamped paid – it rarely is. Further, satisfied, cancelled, or discharged can all have different meanings. For crisis loans, the stated Lender is gone. Investors in “trusts” are not Lenders to borrowers. Appears to be TILA violation to state security investors in trusts are “lenders.” Believe the government stated they are not by codified opinion defining creditor or covered person under TILA – which does not include investors in MBS, REMICs etc. Thus, it is impossible for legal title to exist. The only way to get around the short TILA SOL is by alleged fraud. No one agreed to not have a “Lender.” In fact, your Lender might be the first one you would apply to for a refinance. This is because they may provide a better rate to keep you. Who do you apply to for a refinance if the “account” is assigned to a trustee to a BS trust? Perhaps, this is why borrowers can only get a modification – if lucky.

  2. The only thing that grants the monies to purchase the house or refinance the house is the Note that is signed and the Deed of Trust (DOT) allows a lien to be attached by the entity that has lent or purchased the debt.

    Now there been a disruption in the process with the pooling of Government Backed loan into the Ginnie Mae MBS where the requirement is to use UCC3 to endorse the Note in “blank” that once the blank Note is transferred physically the entity that has physical possession is the owner of the Note but not the debt when they don’t pay for it.

    So in explaining the separation of Note and debt, it because Ginnie Mae cannot own any mortgage debt. As what is different from Fannie and Freddie who do purchase the debt and place them into MBS, they do have the Assignment of DOT into there names and they do foreclose on the Properties.

    The non-judicial foreclosures of all Gov Back loan are done so illegally as the DOT are not assigned to Ginnie the owner of the blank Note. As the process is uniform for every pooled loan, we know for a fact that every pooled loan must be handled the same way when attaching the loans to the Ginnie MBS.

    Take Washington Mutual Bank who is seized on Sep 25, 2008, without having any assignments of DOT from the bank to Ginnie as Wells Fargo Ban who is servicing and custodian of records of 1.3 million FHA & VA loans which Wells has Kozeny & McCubbin assigns to Wells Fargo the DOT and forecloses as if they purchased the debt as WAMU stop existing on Sep 25 when the FDIC declares it a “failed bank”!

    Ginnie Mae is not a member of MERS so there not passing of title between two member banks but some internal naming of Ginnie as the title holder, while not informing the local register that while pooling the loans the UCC3 process was used to transfer ownership of the Note while not paying for the debt.

    The Note is the contract but without owning the debt that contract is not enforceable. WAMU has not and cannot approach the court due to the fact they do not exist and the only financially interested party is the homeowner!

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