BiggerPockets

I'd call that a stale note! I'd first want to know who was in the property. I'm not familiar with Cali but if the s/l was 4 years for contracts and unsecued notes I'd put my money betting on 4 years.

I'd weigh the option of proceeding regardless of the s/l as the borrower would need to bring that as a defense, I'd bet they don't if no payment was ever made.

Another issue, if a payment was never made it sounds like mortgage fraud that is another category getting to criminal charges, the s/l will be longer, 7, 10, 12 years, not sure, it depends too if the original was an insured lending institution or a private individual.

It also depends if the note was generated from an installment sale or was made as a cash loan, purchase or refi.

It will also depend on whois in the property and if the property has been sold over the past 16 years, we just had an example of a subject 2 deal going sour with subsequent sales and that can limit your security if the note holder fails to act in a timely manner.

Frankly, I wouldn't fool with this one, 16 years old, foreclosure notice gievn and never followed through, that's pretty much allowing the note to go stale and abandoning the claim of the amounts owed.

If the maker of the note is still in the property and you can contact them by phone or in person, you might be able to negoiate something holding the fraud claim over thier head, forgive some of it and modify it back to life, but they need to agree and you can certainly bluff your way along to a point. If another owner is in there and your note / dot was never picked up in title searches but was filed, you may have a claim with the title company, but I'd doubt you'd get far after 16 years, not sure the cloud wouldn't be quickly blown away by a judge. Really, I wondn't mess with it. Too much work and no guarantee at the end. :)

Very true William, a form of estoppel, laches as a failure to make a timely claim (you must be an attorney !) and is the underlying issue with "stale" notes. Been awhile since I've heard that! While claims in equity may survive as a practicle matter, if my security interests are not actively sought in a timely manner I may be barred from recovery. In Missouri we don't have a limitation to foreclosure, but the issue pointed out by William still applies and if a lender or creditor fails to actively seek remedies your security interest may be limited. However, a few months ago I had a note paid off arising from a sale transaction and it was stale, about 5 years old and a small amount remaining. A long story but I didn't make continued collection efforts and wrote it off, then got a phone call from the title company. The borrower wasn't represented and simply went to closing where he learned he was paying off the balance, what a surprise! He didn't admit being in default and I didn't mention it either, just took the money as if there was never a problem.

But 16 years old? I wouldn't go there unless a Cali attorney felt confident about collecting, or if you could work it out as I mentioned.

Lost this thread since reading it back in 2012 (ok, 12/30/2012).

Got the definitive answer: properly recorded trust deed can be foreclosed on judicially or non-judicially for 10 years following the due date, if identified on the recorded security instrument (i.e., trust deed), or 60 years, I not so identified.

I must have been eating magic mushrooms to not immediately recall this, guys. Around 2003 I was involved with a very high profile probate attorney's whereby the decedent had fouled up title to the primary estate asset in a defunct corporation and clouded with some 23 judgment liens junior to a private party 1st.

The clean solution was to track down the little old lady who owned the ancient 1st TD which had not been paid on since about 1988. The bene had even lost the original note so I had her give me a lost instrument indemnification agreement along with the assignment of note/TD. I subbed in my corp as trustee, added 15 + years of back payments and completed a "friendly" foreclosure with the blessing and cooperation of the heirs.

This had the effect if wiping off the liens as no 3rd party bidders resulted in title reverting to me as assignee. Now that I had title, I negotiated a sale back to the estate, financed paying off the attorney's fees and my fee, as well as the foreclosure costs. Damn, this one was fun!