How To Fight Foreclosure by making the bank "Produce the Note" (Q&A)
Q. I was just recently served with foreclosure papers on my home and don't have the money to pay my mortgage up to date. Is it worth me hiring a lawyer to fight when ultimately I won't be able to win? The bank is refusing to negotiate with me. A. Don't sound so darn defeated! Foreclosure is a process, and there are certain safeguards in the process to protect you, the borrower. But if you don't challenge your lender the court will simply allow the foreclosure to proceed. You must obtain all of your court dates and be sure to attend every one. The process will differ from case to case, so I can't offer you advice on how to proceed in your specific matter, but there are a few steps that I've found to be appropriate in most cases. In foreclosure, there are three very powerful words: "Produce The Note". When you request that the bank "produce the note" your goal is to make certain the institution suing you is, in fact, the owner of the note. The note proves you owe the debt. During the lending boom, most mortgages were flipped and sold to another lender or sold to investors as securitized packages on Wall Street. In the rush to close deals fast for huge profits, many of the new lenders did not get the proper paperwork to show they own the note, or have lost them along the way in storage facilities. This is the key to the "produce the note" strategy. Great caution must be taken before a judge can allow someone who can't produce the note to cash in on your home. The right to foreclose belongs only to the person who has legitimate possession of the original note - not a copy or electronic entry, but the original note itself. What often happens, however, is that the lender claims it lost the original note. In that instance the U.C.C. contains a specific provision (?3-309) which states that the bank can enforce a promissory note without having the original only where it can prove that (1) it no longer has the original note; (2) it was properly in possession of the note and entitled to enforce it when it lost the note; (3) it didn't "lose" possession by transferring the note; and (4) the original note was destroyed, forever lost, or stolen. Until the Court has been satisfied of all these elements, the foreclosure cannot proceed. At last, this process is not intended to help you get your house for free. The goal is to delay the foreclosure and put pressure on the lender to negotiate new terms. Despite all the hype about lenders wanting to help homeowners avoid foreclosure, most borrowers know that's not the reality. I believe many lenders bear responsibility for these defaults by putting borrowers into unfair loans using deceptive practices. Allowing lenders to continue foreclosing on home after home, destroying our neighborhoods and our economy hurts us all. So, make it hard for your lender to take your home. Make 'em produce the note! If you can afford a lawyer, there are many other ways to approach the case that will buy you time, if not victory. If you can't afford to hire an attorney, email me for sample "Produce The Note" forms.