Introduction By Professor Michaela White

The Permanent Editorial Board for the Uniform Commercial Code released its report, “Application of the Uniform Commercial Code to Selected Issues Relating to Mortgage Notes” (“Report”) on November 14, 2011. The Report asks and answers four questions:

  • Who is the person entitled to enforce a mortgage note and, correspondingly, to whom is the obligation to pay the note owed?
  • How can the owner of a mortgage note effectively transfer ownership of that note to another person or effectively use that note as collateral for an obligation?
  • What is the effect of transfer of an interest in a mortgage note on the mortgage securing it?
  • May a person to whom an interest in a mortgage note has been transferred, but who has not taken a recordable assignment of the mortgage, take steps to become the assignee of record in the real estate recording system of the mortgage securing the note?[i]

The Report provides examples and explanations of the operation of relevant UCC rules in a variety of timely fact scenarios.

The Report concludes that the “enforcement of real estate mortgages by foreclosure is primarily the province of a state’s real property law, but legal determinations made pursuant to the four sets of UCC rules described in this Report will, in many cases, be central to administration of that law. In such cases, proper application of real property law requires proper application of the UCC rules discussed in this Report.”[ii] To read the Report, click here.


[i] Report at 4.

[ii] Report at 14.

No Author Biography has been linked to this Article.

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