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Home / Courts / N.C. Court of Appeals Unpublished / Real Property – Mortgage Foreclosure – Lost Note Statute – Evidence – Affidavits

Real Property – Mortgage Foreclosure – Lost Note Statute – Evidence – Affidavits

In re Iannucci (Lawyers Weekly No. 012-033-17, 7 pp.) (Richard Dietz, J.) Appealed from Buncombe County Superior Court (Sharon Tracey Barrett, J.) N.C. App. Unpub.

Holding: By affidavit, an employee of the petitioner-bank’s servicing agent attested that (1) the original note had been lost while in the bank’s possession, (2) the bank was entitled to enforce the note when loss of possession occurred, (3) the loss of possession was not the result of a transfer by the bank or a lawful seizure, and (4) the bank cannot reasonably obtain possession of the instrument because its whereabouts cannot be determined; accordingly, the record supported the trial court’s findings and conclusion that the note is enforceable under G.S. § 25-3-309(a). The trial court properly concluded that the bank is the holder of a valid debt and was permitted to proceed with foreclosure under the terms of the deed of trust.


The affiant’s statement that the bank “is the holder of the Note” does not affect the affidavit’s admissibility because that type of legal conclusion in an affidavit may simply be disregarded by the trial court.

The affiant’s statements concerning the transfer of the note from the original lender to the bank were admissible under the business records exception to the rule against hearsay. The affiant’s affidavits say that the affiant, an employee of the bank’s servicing agent, is familiar with the system that generates the records concerning note transfers, that entries in the system are made in the regular course of business at or near the time the transfer occurs, that the entries are made by employees of the company with personal knowledge of the transaction, and that it is the company’s practice to record this information in the system. This testimony satisfies each portion of the test in N.C. R. Evid. 803(6).


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