Ready to say goodbye to student loan debt for good? Learn More

The Lender Won’t Show Me the Note. Can It Foreclose Anyway?

5 minute read Upsolve is a nonprofit that helps you get out of debt with education and free debt relief tools, like our bankruptcy filing tool. Think TurboTax for bankruptcy. Get free education, customer support, and community. Featured in Forbes 4x and funded by institutions like Harvard University so we'll never ask you for a credit card.  Explore our free tool

In a Nutshell

Asking the lender to show you the note is a defense you can use to stop or delay mortgage foreclosure. How well this defense works will depend on your state's laws. It often only buys time for you to work on other foreclosure alternatives. This article explains what the show-me-the-note defense is, how it works in different states, and where it’s most likely to work.

Written by Lawyer John Coble
Updated November 6, 2021

To foreclose on your home, the mortgage company must be able to show you the promissory note, right? The answer is "maybe." Asking the lender to show you the note is a defense you can use to stop or delay mortgage foreclosure. How well this defense works will depend on your state's laws. It often only buys time for you to work on other foreclosure alternatives. 

This article explains what the show-me-the-note defense is, how it works in different states, and where it’s most likely to work.

What Is the Show-Me-the-Note Defense?

With the show-me-the-note defense, the homeowner demands proof from the mortgage company that it has legal standing to foreclose on their home. To do this the mortgage company needs to prove that it's the owner of the note. This used to be a simple process, but as mortgage lending has changed, it’s gotten more complicated. 

Understanding Securitization

In the past, you would go to your local bank and take out a mortgage loan to buy a house and become a homeowner. You made payments to that bank until the mortgage was paid off. You and the bank were the only parties to the mortgage. Though some mortgages still work this way, the vast majority now go through securitization.

Securitization is a process of pooling multiple mortgages together and then selling ownership rights in the pool of mortgages. These ownership rights are called mortgage-backed securities (MBS). These are like stocks and bonds purchased by investors. The process of pooling your mortgage and turning the pool into securities is complex. But the result is that your mortgage isn’t just between you and your bank. After securitization, many parties are involved. 

Because your mortgage note has been transferred among so many different parties, the party that attempts to foreclose on your home may not be the rightful owner of the note. It may be difficult to find the true owner of the note. And this is where the show-me-the-note defense comes in. 

The problem is made more complicated by robo-signing. Robo-signing is when someone with no knowledge of the documents signs off on a transfer. This can result in the transfer not being valid. Invalid transfers make determining the rightful owner of the note even more difficult.

Understanding the Parties Involved in Securitization

Your lender is called the originator of the mortgage. The lender-originator then transfers your mortgage to a "sponsor" who transfers the mortgage to a "depositor." The depositor transfers the mortgage into a trust, and the trustee pools your mortgage with similar mortgages in what's called a pooling and servicing agreement (PSA). After the mortgages are pooled, the pool is broken into mortgage-backed securities (MBS) that are sold to investors.

This is a simplified version of a very complicated process. It doesn't even get into the role of guarantors like Fannie Mae or the role of the servicers — the companies you make payments to. Usually, you'll think of the servicer as your mortgage company. There are also third-party companies that try to keep up with this complex process such as Mortgage Electronic Registration Systems (MERS). 

Can the Foreclosing Party Legally Foreclose?

To understand who has the right to foreclose on your home, you first have to understand the components of your mortgage. There are two parts to your mortgage loan: a security instrument and a promissory note. The security instrument is either called a mortgage or a deed of trust. It gives the lender the right to sell the collateral for the loan (your home or real estate) at a foreclosure sale if you do not pay the note. 

The other part of the mortgage loan is the promissory note, which is the right to payment. This is called a negotiable instrument and is considered personal property. As such, it’s governed by Article III of the Uniform Commercial Code (UCC), which is a set of laws widely adopted across states. The UCC says the owner of the note doesn't have to have possession of the note to enforce it and foreclose on the home. But they must be able to prove they’re entitled to enforce the original promissory note if the note was lost or they’ve acquired ownership of the note from a party that was entitled to enforce it.

Each state’s courts interpret the UCC differently. This means that proving foreclosure rights is different in each state. In most states where the show-me-the-note defense works, the foreclosing party only needs to show that it owns the note. In some states, the foreclosing party must prove they own the note and the mortgage. In other states, the foreclosing party doesn't have to prove it owns the note or the mortgage. These are the states where the show-me-the-note defense won't work.

In essence, the show-me-the-note defense doesn't usually require the foreclosing party to produce the note, but it does require them to prove that they’re the rightful owner of the note and have the power to foreclose.

Usually, after you've successfully stopped a foreclosure with the show-me-the-note defense, the proper party will either step forward to complete the foreclosure or the foreclosing party will receive a valid transfer of the note. The foreclosing party may have to restart the foreclosure process. This buys you time to use other loss mitigation techniques such as refinancing, mortgage modification, a short sale, or a deed in lieu of foreclosure.

Upsolve Member Experiences

1,830+ Members Online
Silas Path
Silas Path
★★★★★ 3 days ago
Easy to use and answered all my questions
Read more Google reviews ⇾
chris berger
Chris Berger
★★★★★ 4 days ago
Upsolve makes the process so easy!
Read more Google reviews ⇾
Teresa Logan
Teresa Logan
★★★★★ 7 days ago
Thank you for assisting with the paperwork! It was easy!
Read more Google reviews ⇾

How the Show-Me-the-Note Defense Works in Different States

When it comes to using the show-me-the-note defense, there are three kinds of states:

  • Judicial foreclosure states, which all require proof of ownership of the note to foreclose;

  • Nonjudicial foreclosure states that require proof of ownership of the note to foreclose; and

  • Nonjudicial foreclosure states that don't require proof of ownership of the note to foreclose. 

In some states, the foreclosing party must go to court and get a judge's permission before it can foreclose. This is called a judicial foreclosure. The states that require judicial foreclosures are Connecticut, Delaware, Florida, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, and Vermont. A few states have no procedure for judicial foreclosures. 

In other states, the foreclosing party doesn’t need to go to court as part of the foreclosure proceedings. These are called nonjudicial foreclosure states. Most states have judicial and nonjudicial foreclosure statutes. In these states, lenders pursue nonjudicial foreclosures more often. That’s because it’s quicker and less expensive for the foreclosing party. Nonjudicial foreclosure sales happen with borrowers who have deeds of trust instead of mortgages. (Though you probably call your deed of trust a mortgage.) These foreclosure sales may be called a trustee's sale.

Each state interprets foreclosure laws and the UCC differently. In a 2011 lawsuit — Hogan v Washington Mutual Bank — the Arizona Supreme Court held that that state's nonjudicial foreclosure statute doesn't require the foreclosing party to prove the right to foreclose before the trustee exercises its power of sale in a deed of trust foreclosure.

What's the law in your state? If your state has a judicial foreclosure statute, the show-me-the-note defense should work if the foreclosing party can't prove it owns the note. If you're in a nonjudicial state, the best way to determine if the show-me-the-note defense will work is to consult with a local attorney or a foreclosure defense specialist

Let’s Summarize…

If your home is being foreclosed, you want to know the company foreclosing has the legal right to foreclose. In all judicial foreclosure states, the show-me-the-note defense is a valid claim to raise. As for the nonjudicial foreclosure states, some allow the show-me-the-note defense, and some don't. It's important to consult with an experienced attorney to determine your options under your state's laws.

If you're successful with the show-me-the-note defense, it will buy you time, which you can use to try other ways of avoiding foreclosure. You may be able to keep your home by modifying your loan, refinancing, or filing Chapter 13 bankruptcy. If you're unable to keep your home, you may be able to use other loss mitigation techniques to minimize the impact on your credit.

Written By:

Lawyer John Coble


John Coble has practiced as both a CPA and an attorney. John's legal specialties were tax law and bankruptcy law. Before starting his own firm, John worked for law offices, accounting firms, and one of America's largest banks. John handled almost 1,500 bankruptcy cases in the eig... read more about Lawyer John Coble

It's easy to get debt help

Choose one of the options below to get assistance with your debt:

Considering Bankruptcy?

Our free tool has helped 13,566+ families file bankruptcy on their own. We're funded by Harvard University and will never ask you for a credit card or payment.

Explore Free Tool
13,566 families have filed with Upsolve! ☆

Private Attorney

Get a free evaluation from an independent law firm.

Find Attorney

Learning Center

Research and understand your options with our articles and guides.

Go to Learning Center →

Already an Upsolve user?

Read Support Articles →

Upsolve is a 501(c)(3) nonprofit that started in 2016. Our mission is to help low-income families resolve their debt and fix their credit using free software tools. Our team includes debt experts and engineers who care deeply about making the financial system accessible to everyone. We have world-class funders that include the U.S. government, former Google CEO Eric Schmidt, and leading foundations.

To learn more, read why we started Upsolve in 2016, our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.