Website The Consumer Warning Network is publicizing an intriguing technique that consumers facing home foreclosure can use to improve their leverage against the lender. It’s called the “produce the note” strategy and amounts to the consumer demanding that the lender furnish the original paperwork — the actual promissory note — that serves as the official legal record of the loan. It is a document that contains the homeowner’s signature and proves that the lender threatening foreclosure is in fact the owner of the mortgage.
The technique is proving effective because so many mortgages written during the latest housing boom were sold, resold, sliced, diced, aggregated, and securitized to the point that the original loan documents might have been lost or even destroyed. If the consumer demands the note and the lender can’t produce it, the foreclosure process could be stalled or, in some cases, stopped altogether. The Associated Press reports that a Cleveland judge threw out 14 foreclosures in 2007 because plaintiff Deutsche Bank National Trust Co. was unable to “produce the notes.”
For its part, the American Securitization Forum which represents banks, law firms, and investors, says the mortgage note almost always exists safely in electronic format, which is usually acceptable to a judge. Deputy executive director Tom Deutsch told the Associated Press that consumers who practice the produce-the-note technique are “making lawyers jump through procedural hoops to delay what’s likely to be inevitable.”
Still, slowing down the process by weeks or months can prove invaluable to consumers who are facing eviction from their homes.
To learn more, see the Associated Press article, as well as The Consumer Warning Network’s Produce The Note “How-To”, which includes templates for legal documents that consumers can use to pursue a produce-the-note strategy.
Lastly, here’s The Consumer Warning Network interviewing lawyer John Yanchunis about the strategy:
This article originally published at https://dc.urbanturf.com/articles/blog/produce_the_note._3_words_that_could_stave_off_foreclosure/555.
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