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Alabama Foreclosure - What Is the Difference Between the Note and The Mortgage in Alabama?

Written by: John Griffin Watts

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Posted almost 2 years ago. Applies to Alabama, 3 helpful votes, 0 comments

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Note - The Debt

The note is simply the debt. It is the document that establishes how much you have borrowed, who you borrowed it from, how long you owe it, and what the repayment plan is - fixed or variable interest rate. The note will also contain some terms such as fees and expenses that can be charged, how the variable interest rate can change, etc. The note is important itself - like an actual check - in that it is critical that whoever is trying to foreclose on you must have a properly endorsed note to the foreclosing company. This is just the same as you taking a check to a bank - if it is not made out to you then you need to show proper endorsements. This is so often lacking in foreclosures today in Alabama because the foreclosing company simply can't prove it truly owns the note - which is the debt.

Mortgage - Ties The Debt To The Dirt

The mortgage is what makes the difference between an "unsecured" debt and the note being tied to your house. The note is just the money you owe - the mortgage says to the bank "I'll put my house on the line to promise you I'll pay it back." Sometimes this is called "tying the debt to the dirt" - the note to the home. The mortgage will list (along with the note) the manner in which notice is to be given to you if you default. Its important to read carefully through your note and mortgage if you are facing foreclosure. You need to check and make sure that the mortgage company is following the requirements set forth in the mortgage and note.

Conclusion

Both the mortgage and note are important when looking at a foreclosure. We have to see if the mortgage company that is foreclosing actually has followed the terms of the note and mortgage. If not then this may lead to a lawsuit to stop the foreclosure or a counterclaim once an ejectment lawsuit is filed. We will continue to explore foreclosure in Alabama so be sure and check out our other guides.