Often yes, though it narrows your field of buyers and can lower the price. Buyers want the original signed note. Where it cannot be found, a sworn lost note affidavit may be accepted in its place, depending on the buyer and on the rest of your file.
Work out which paper is missing
People say “the original” about two different documents, and losing one is far more serious than losing the other.
| Document | What it is | If you cannot find it |
|---|---|---|
| Promissory note | The borrower’s signed promise to pay. It is not normally recorded anywhere. | No public copy exists, so a lost note affidavit is needed. |
| Mortgage or deed of trust | The document that ties the debt to the property. It is normally recorded with the county. | The county recorder can generally supply a certified copy for a fee. |
A missing mortgage or deed of trust is the lighter problem, since the county holds a copy. Everything below concerns a missing note.
Why buyers insist on the signed original
The ink-signed original is what a holder generally produces to prove the right to collect and, if it ever comes to that, to enforce the debt. A photocopy shows the terms without showing who holds the note today. A buyer who goes ahead without the original carries a risk they have to price: the original could surface in someone else’s hands, or a court could ask for it years later.
Places to look before you call it lost
- The closing attorney or title company that handled the original sale, whose closing file may still hold it.
- A safe deposit box, a home safe, or the folder with your deed and closing statement.
- Any loan servicer or bank that has collected payments for you.
- The attorney who handled the estate, if you inherited the note.
The lost note affidavit
If the search comes up empty, the substitute buyers look for is a lost note affidavit, a sworn and notarized statement from you. It generally says that you own the note, that the original has been lost or destroyed and you have searched for it, that you have not sold, pledged or given it to anyone, and what its terms were. Attach a copy of the note if you have one.
Expect the buyer to ask for an indemnity as well. That is your written promise to cover their loss if the statement proves wrong or the original turns up with someone else. The promise outlasts the sale, so have an attorney explain how far it reaches under your state’s law before you sign.
A replacement note
A cooperative payer can sign a replacement note on the same terms, prepared by an attorney. The payer has no duty to sign one, so ask before you count on it.
What it does to your offers
Responses differ from buyer to buyer. One treats an affidavit as routine on an otherwise strong note, another lowers the price to cover the added risk, and a third has a firm rule against buying without the original. Because of that spread, a note with a missing original has more to gain than a clean one from being shown to several buyers.
The rest of your file has to do the work the original would have done. A copy of the note, the recorded security document, the closing statement and a clean payment record all make an affidavit easier to accept. Buyers treat the quality of your paperwork as a sign of how the loan has been run, so gather the other documents you need to sell a note before you go out for offers.
Say it in the first conversation
Tell every buyer at the outset that the original is missing. The paperwork is examined late in the sale of a note, after an offer has been accepted, so a gap nobody mentioned comes out at the point where it can cut the agreed price or end the deal. Disclosed on day one, it is priced once. When you ask us to price the note, say which papers you hold and which you do not, and whether you have already worked through the first steps after losing the original note. Hold off on having an affidavit drafted until a buyer has told you what wording they accept, since a buyer may insist on a form of its own.
Related questions
What is a lost note affidavit?
It is a sworn, notarized statement that you own the note, that the original is lost or destroyed, and that you have not transferred it to anyone. Expect the buyer to ask for an indemnity with it, and have an attorney explain what you are agreeing to.
Is a photocopy of the note enough to sell it?
A copy alone is not enough, because it shows the terms without proving who holds the note today. It does help support a lost note affidavit, so keep it.
What if I lost the mortgage or deed of trust, not the note?
That is the smaller problem. The security document is normally recorded, so the county recorder can generally provide a certified copy.