Oregon Court Wipes Out Secured Lender Who Fails To Perfect Security Interest In Mortgage Note

LexisNexis ( March 20, 2017, 12:42 PM EDT) -- One of the enduring principles of secured lending law is that the "mortgage follows the note."  Thus, even though a lender may think it has a perfected security interest in a piece of real estate through a recorded mortgage or deed of trust, failure to perfect against the note itself—by taking possession or filing a UCC financing statement—spells doom for the lender.  That lesson was learned the hard way in a recent bankruptcy case from Oregon.  We think the decision hits the target in the middle....