Locating Lost Notes

by Lorelei Stevens, President
Wall Street Brokers, Inc.
Copyright © 1998 All Rights Reserved

The first rule of selling your seller-financed note is to deliver the original note, and not a copy. You may believe that the note is in a known location, but sellers like you are often surprised to discover that what they thought was the original is only a copy. You may discover that the original is missing and that there is only a copy available.

You know that you cannot sell anything but the original note. So, you may have to become a detective and find it. But where do you look?

This can be a long and frustrating chore, so it pays to have an orderly approach planned in advance. Most sellers don't realize the importance of having the original and may panic or become flustered when they discover the original note is missing. Your first task is to look in likely places. What are the most likely places to locate a lost original note?

DO YOU HAVE IT?: In many cases, the seller actually has the note somewhere but has misplaced it. mmake a thorough search of YOUR home, in the basement, in the garage, under the bed, in the closet, in the desk drawer, in the attic, and any other likely place you might put papers. If it doesn't turn up at home, check your safe deposit box, your place of business, or places used for storage.

SERVICING AGENT: If a professional servicing agent is collecting the note payments, ask them. The servicing agent may be a title insurance company, an escrow company, a lawyer, a real estate broker, or any type of servicing/collection company. Some servicing agents have strict policies demanding possession of the note, while others do not want the liability and refuse to keep the note. Contacting the servicing agent is not a foolproof way to locate a lost note, but it frequently produces results.

ORIGINAL PROPERTY CLOSER: Contact the original closer who did the paperwork to close the sale of the property. The original closer is usually the first person to have possession of the note and it may still be in their file. If the note itself is not in their file, there may be correspondence indicating where, and to whom, it was delivered. This gives you a new trail to follow. If the original closer is now out of business, you can check with its state licensing authority see if a contact name and address is available for locating the defunct closer's old files.

YOUR LENDER: Did you ever a loan taken out and use the note as collateral? If so, the note is likely to still be in the possession of the lender. Keep in mind that if money is still owing, the lender will not surrender the note until your loan has been paid off. Even if the loan has been repaid, the lender may have neglected to return the note to you and may still have it in their file.

PARTIAL SALE: Have you sold part of the note at some previous time? You may have sold a certain number of payments on the note to another party. If the payments have been completed, the previous buyer may have forgotten to return the note to you. If money is still owing to that purchaser, it will have to be paid before the note will be surrendered.

EXAMINE THE SECURITY DOCUMENT: The deed of trust or mortgage is recorded with a county authority. The security document often has an address showing where to send it after recording. That address can be an important clue to tracing the note.

FAILED TRANSACTIONS: Have you previously tried to sell the note to another party or borrow against it, and then had the deal fall through? The person or agent handling that sale or loan may never have returned it to you and still has it in their file.

MULTIPLE OWNERS: Do you own this note with other people? A note may have multiple owners and you and others may want to sell your position in the note. You or the others may have forgotten which among you has possession of the original note. In such cases, be sure to ask all of the other owners.

KEY PEOPLE: The variety of people who may have possession of the original note can be exasperating. To simplify your search, here is a checklist of key people to ask: your lawyer; the payor's lawyer; your ex-spouse, ex-partner, or ex-guardian; parents, accountants, and controlling persons; the payor (who may have received the original by mistake); your creditors, such as the IRS, state tax lienholders, or judgment creditors; a court file if there was a past dispute between you and the payor.


In your search for a lost note, you are likely to encounter non-interested, unmotivated and uncompensated people. They may have little reason to cooperate with you so you must apply salesmanship and possibly even money payments to enlist their help. You should expect delays at best.

If you apply due diligence to your search using these guidelines, you will have a much better chance of locating the lost note.

If, after lengthy search, you still cannot find the lost note, click here.

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