Logo

What are the methods of transferring a note?

Bar Exam Prep Real Property Security Interests in Real Estate What are the methods of transferring a note?
😀 Real Property • Security Interests in Real Estate PROP#209

Legal Definition

A note may be transferred either by (1) indorsement and delivery (transferee becomes holder in due course), or (2) a separate document of assignment.

Plain English Explanation

A promissory note is a pretty important document, especially when it comes to a mortgage (since it usually represents a lot of money). In appreciation of just how important this document is, the law requires some pretty explicit and almost ceremonial actions in order to transfer it from one party to another. In other words, you can't just hand it to someone and say, "Here, this is yours now." You'll need to either sign it over and deliver it to someone, or execute a completely separate document that legally assigns the note.

Related Concepts

How do states treat a mortgage without a note? How do states treat a note without a mortgage? How is a mortgage's priority determined? How may a party be a holder in due course of a note? In lieu of foreclosure, what do many installment contracts prefer and how do courts address this alternative? Under which theories may a mortgagee take possession of a property and begin receiving rents before foreclosure? What are the 5 types of security interests in real estate? What are the benefits of the holder in due course status? What are the limitations of a junior interest? What interests does a foreclosure destroy? What is a deficiency judgment? What is a due on sales clause? What is a foreclosure? What is an installment land contracts? What is a receivership? What is a redemption in equity? What is a statutory redemption? What is the distribution order of proceeds from a foreclosure? What is the result of a grantee assuming the mortgage? What liabilities are associated with a mortgaged property that is transferred to another party? What occurs in intermediate theory states? What occurs in lien theory states? What occurs in title theory states? What results from a party purchasing a foreclosed property subject to a senior interest? What security interests exist under a absolute deed? What security interests exist under a deed of trust? What security interests exist under a installment land contract? What security interests exist under a mortgage? What security interests exist under a sale-leaseback? Who may transfer their interest in a mortgage?
Law School Boost Robot

Get Law School Boost for Free!

Law School Boost makes studying for law school and the Bar easier using our science-backed, A.I.-driven, adaptive flashcards with integrated hypos, plain English legal translations, and memorable illustrations. Start now for FREE!