Form

• Most jurisdictions offer a form for the affidavit like the one found at the Rutherford County North Carolina Register of Deeds. The form contains language indicating that the person or entity signing the note is the holder of the note and has the authority to sign the document. The affidavit goes on to state that after making an effort to find the note it is lost. The North Carolina form states that the note has been paid in full and should be canceled along with the lien of the deed of trust. Like all affidavits it is signed before a notary public under oath.
  
  

Cancellation of Debt

• In North Carolina the purpose of the affidavit found at the Rutherford County website is to enable cancellation of a deed of trust or mortgage without the original promissory note. The requirement to present the original note is to ensure that the person attempting to cancel the note is in fact the true holder of the note. The affidavit is a sworn statement that the person is the holder and has the authority to cancel the note. For the borrower it becomes a paid receipt in lieu of receiving the original promissory note marked paid in full.
  
  

Foreclosure

• In addition to cancellation of a debt, the other time a lender needs to produce the original promissory note is when the borrower defaults in payment of the debt. The lender then commences a foreclosure action to enforce the lien and take possession of the property. Possession of the original promissory note ensures that the party filing the foreclosure is the proper party. The affidavit of lost note takes the place of the original and is a sworn statement to the court affirming the right to foreclose.
  
  

Problems

• An affidavit of lost note is only to be used when the lender has made a good-faith effort to locate the original note and it is nowhere to be found. It is not meant to be used routinely in place of making an effort to locate the document. It always raises the possibility that the company signing the affidavit is not the true holder of the note and that someone else may show up with the original. These problems cause some homeowners to challenge in court the practice of allowing affidavits of lost note. Use of the affidavit casts doubt on the validity of the foreclosure action and some courts will not allow its use in that situation.