Consumer advocates are urging homeowners facing foreclosure to demand from their banks to produce the note they originally signed. A good many foreclosures currently in the works are done even though the mortgage lender cannot produce the note. Is it a useless delay tactic or savvy step of thwarting foreclosures?
Produce the Note Temporarily Halts Foreclosures
The Consumer Warning Network is making sure the word gets out that lenders ready to put mortgages in foreclosure are not always able to produce the note. The mortgage note, as you might have surmised, is the original document the homeowner signed. Much like the pink slip to a car, being able to produce the note means owning an interest in the home it secures.
This then begs the question why it is that banks without adequate proof of mortgage loan ownership (unable to produce the note) still have the right to proceed with foreclosures. The devil is in the details, and the Associated Press quoted a 2008 University of Iowa study which uncovered that foreclosure proceedings initiated by banks are fraught with negligence and in about 40% of the time evidence a missing note. Hence the drive to make banks produce the note.
Bank attorneys are not amused and resent having to jump through the extra hoops of either finding a way to produce the note, or getting a judge to agree to accept an affidavit in lieu of the paper. Of course, this sentiment comes from a group of professionals who do not bat an eye at delivering a 30 page questionnaire in divorce cases — calling it “discovery” — and demanding copies of checks from the last 10 years.
Real Estate Foreclosures Unmitigated
Whether it is Hope for Homeowners or President Obama’s mortgage rescue plan, the fact that real estate foreclosures are going through the roof is undeniable. The Countrywide Foreclosures Blog reports that as of 02-19, there are 15,905 foreclosed homes the lender has listed. The combined asking price is $2,547,478,845. In California alone, the lender owns 4,240 foreclosure properties.
On how many of these would Countrywide have been able to produce the note? How many homeowners might have given Countrywide sufficient headaches with demands to produce the note that rather than going through with a foreclosure, the lender might have more earnestly sought to modify the mortgages?
Produce the Note Stalls, Not Halts, Foreclosure
Make no mistake, if your bank has begun foreclosure proceedings because you defaulted on your mortgage, they have the legal right to do so, and before long the judge will allow the real estate to change hands and go into the bank’s possession.
That said, the demand to produce the note has the power to stall procedures long enough for you to come up with sufficient funds to cure the default, or for the bank to decide that a court battle is not worthwhile, and to negotiate with you more earnestly on a loan modification.
Visit the Consumer Warning Network for the forms you need file with the courts to compel your lender to produce the note when they want you to show them money – or get out.
Sourceshttp://countrywide-foreclosures.blogspot.com/2009/02/15905-homes-offered-for-sale-on.html; http://www.consumerwarningnetwork.com/2008/06/19/produce-the-note-how-to/; http://www.google.com/hostednews/ap/article/ALeqM5hLOuvy9fguykC2NydTDrkqqyybvQD96DHN5G0