Must a mortgage holder prove their ownership of the mortgage debt to the owner of the encumbered property by producing the original promissory note and chain of mortgage assignments before a trustee’s foreclosure sale can take place?

Facts: A homeowner defaults on a mortgage encumbering their residential property. The mortgage holder initiates a trustee’s foreclosure and the trustee’s sale is scheduled. Before the trustee’s sale takes place, the homeowner makes a demand on the mortgage holder to produce evidence they own the mortgage by turning over the original promissory note and documentation of the chain of ownership to the mortgage debt. The mortgage holder rejects the demand.

Claim: The homeowner claims the mortgage holder cannot complete a trustee’s sale until they produce the original promissory note and the chain of ownership to the mortgage.

Counterclaim: The mortgage holder claims the trustee’s sale does not require presentation of the original promissory note or a chain of ownership to the mortgage since the trustee’s sale is a private remedy and not a judicial foreclosure action.

Holding: A California court holds the sale may take place without the mortgage holder presenting the original promissory note and chain of its ownership since a nonjudicial foreclosure does not require evidence of the debt, and the homeowner did not provide facts showing the mortgage holder was misidentified. [Gallusz v. LLP Mortgage, Inc (2025) __ F4d __]

Gallusz v. LLP Mortgage, Inc

Word-of-the-Week: Nonjudicial foreclosure