Affidavit

An affidavit is a written statement of facts made voluntarily under oath or affirmation, signed by the declarant (called the "affiant") and notarized by a notary public or other officer authorized to administer oaths. Because the affiant swears to the truthfulness of the contents, making a false statement in an affidavit constitutes perjury — a criminal offense. This legal weight makes affidavits an essential tool for establishing facts in real estate and mortgage transactions where direct evidence is unavailable or where a formal record of facts is required.

Affidavits in Mortgage Note Investing

Note investors encounter affidavits at multiple stages of the acquisition and resolution process. The most common types include:

Lost Note Affidavit (LNA)

The lost note affidavit is the most frequently encountered affidavit in note investing. When the original promissory note cannot be located, the prior holder executes an LNA — a sworn statement acknowledging that the original note was lost and recreating its material terms (borrower name, loan amount, interest rate, maturity date, and payment terms).

Key requirements for a valid LNA:

• Wet ink signature — The affiant must sign the original document with a physical signature. A copied or digital signature is insufficient, just as it would be on the original note itself.
• Notarization — The signature must be witnessed and notarized.
• Executed by the party who lost the note — The LNA must come from the entity that last possessed the original. A downstream buyer cannot execute an LNA for a note they never held.
• Accurate recitation of terms — The LNA must reproduce the essential terms of the lost note.

An LNA does not prevent an investor from enforcing the loan, but its absence when the original note is missing creates a serious collateral file deficiency. During due diligence, a missing note without a properly executed LNA should be flagged on the exception report and resolved before closing.

Affidavit of Debt

An affidavit of debt (also called an affidavit of amounts due and owing) is a sworn statement detailing the current outstanding balance, interest owed, fees, and payment history on a loan. Servicers and lenders use this affidavit in foreclosure proceedings to establish the amount the borrower owes. Courts require this documentation to ensure the foreclosing party can prove the specific debt being enforced.

Affidavit of Ownership / Holder Status

This affidavit establishes that the party initiating foreclosure or other legal action is the rightful holder of the note and mortgage. It is particularly important when the assignment chain has gaps or when the loan has changed hands multiple times. The affidavit attests to the chain of ownership and the affiant's authority to act on behalf of the note holder.

Other Common Affidavits

Requirements for a Valid Affidavit

Regardless of type, every affidavit must contain:

1. Identification of the affiant — Full legal name and capacity (e.g., "as Vice President of ABC Servicing Company")
2. Statement of personal knowledge — The affiant must attest that the facts stated are based on personal knowledge or review of business records
3. Specific factual statements — Numbered paragraphs setting forth the relevant facts
4. Oath or affirmation — Language indicating the statements are made under penalty of perjury
5. Signature — Wet ink signature of the affiant
6. Notarization — Notary acknowledgment with seal, signature, and commission expiration date

Robo-Signing and the Importance of Proper Execution

During the 2008–2012 foreclosure crisis, widespread use of improperly executed affidavits — commonly called "robo-signing" — led to massive legal challenges across the mortgage industry. Bank employees signed thousands of affidavits without reviewing the underlying loan files, attesting to facts they had no personal knowledge of. The resulting lawsuits, settlements, and regulatory actions underscored that affidavits carry real legal consequences and must be prepared with care.

For note investors, this history reinforces the importance of verifying that any affidavit in the collateral file is properly executed — signed by an authorized individual with actual knowledge of the facts, notarized correctly, and consistent with the other documents in the file.