OfflineI wrote this information on another thread but fealty it very useful for everyone to have.
A note is the definition of payment. It notes on paper how the loan will be repaid, what the interest is and how long the payments will go for.
The mortgage is a separate document that is the security to the note. So, if the note does not get paid the lender uses the mortgage to foreclose on the property. The mortgage can also be called a lien.
You may find some instances where the note and mortgage are combined but for all intents and purposes they are different contracts / documents.
Also the note is not usually recorded. The mortgage is.
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This is a common questions. I am glad nstreet approached this. Knowing this will help answer a lot of questions such as buying notes and what actually is used for a foreclosure.
If a note is stand alone without a mortgage it has no true ability to foreclose until a lien has been created.
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