No note? Go ask a judge for one

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Foreclosure, inheritance for Cedar Key School hinge on promissory note

By Lou Elliott Jones, Editor

It’s a story right off the national news: Homeowners fighting to prevent foreclosure on their property ask a lender to produce the original promissory note in legal proceedings.

But in Levy County, it is the estate of Kathryn F. Causey, an accountant who died in January 2008, that is trying to stave off foreclosure by having the lender produce the promissory note.

The property parcel No. 00393-000-00 at 12421 State Road 24 in Cedar Key is a frame home built in 1930 that consists of two rooms and an unfinished screen porch, according to the appraiser’s office records. The County Property Appraiser’s Office sets a just market value of $118,242 on the building and property.

In 2005, the Levy County Clerk of Courts recorded a mortgage for Kathryn F. Causey of Cedar Key for $184,000 in book 981, page 552, for parcel No. 00393-000-00. The mortgage company was listed as Wells Fargo.

In 2007, Causey had an electronic mortgage registration for $217,500 recorded at the clerk’s office in Book 1058, page 674, for parcel No. 00393-000-00. The company was listed as New Century Mortgage Corporation.

Now the original mortgagor, Wells Fargo is asking 8th Judicial Circuit Judge David O. Glant to grant it “an action to enforce a lost, destroyed or stolen promissory note and mortgage.”

The mortgage giant, which filed the case as “Wells Fargo as trustee for certificate holders master asset-backed securities trust 2007-NCW Mortgage pass-through certificates, series 2007-NCW Mortgage” against Terry Hamill and Cedar Key School, the heirs of Causey.

Cedar Key School, with about 226 students in kindergarten through 12th grade is one state’s smallest schools.

Glant has scheduled a 10-minute hearing at 3:45 p.m. Monday, April 13, to consider a motion to dismiss the enforcement by Wells Fargo of the promissory note.

The promissory note, which is signed by the borrower is the last item sent to a mortgage company after the mortgage is filed with the county clerks of court in Florida.

It is basically an unconditional promise to pay a certain amount of money to the person who bears or holds the note.

It is also basically a negotiable instrument. The person who holds it can sign it over to someone else.

Like Countrywide Mortgage being able to sign over a series of notes to Wells Fargo who in turn can sign over the notes to, say, New Century Mortgage Corporation.

It is these promissory notes that were “bundled” and sold as “asset-backed securities.”

In news reports they are often called “mortgage backed securities.”

The promissory notes were sliced and diced and reassembled for sale as mortgage-backed securities, investments backed by the promise that the notes would be paid by homeowners.

And that is the situation in Wells Fargo v. Hamill and Cedar Key School.

The original note signed by Causey is not to be found even though Wells Fargo wants to enforce the note and possibly foreclose on the property.

The bank is asking Judge Glant to allow it to reestablish and enforce the note because it “cannot reasonably obtain possession of the note and mortgage because their whereabouts cannot be determined.”

The heirs have instead asked Glant to dismiss the foreclosure move because the terms of the promissory note are unknown due to it being lost, stolen or destroyed.

For some homeowners this would give them time to renogitate with the bank and prevent foreclosure, for the Cedar Key School, the outcome is unknown.