Are you facing foreclosure? Are you desperately searching for a way to keep the bank from taking your house long enough for you to get back on your feet? Watch how Kathy Lovelace and Kim Kolaski are doing it, then download the documents you'll need, below.
HOW THIS WORKS
Your goal is to make certain the institution suing you is, in fact, the owner of the note. (See info to follow below.) There is only one original note for your mortgage that has your signature on it. This is the document that proves you owe the debt.
During the lending boom, most mortgages were flipped and sold to another lender or servicer or sliced up and sold to investors as securitized packages on Wall Street. In the rush to turn these over as fast as possible to make the most money, many of the new lenders did not get the proper paperwork to show they own the note and mortgage. This is the key to the produce the note strategy. Right now, many lenders are moving to foreclose on homeowners, resulting in part from problems they created, and they don’t have the proper paperwork to prove they have a right to foreclose.
KNOW YOUR RIGHTS
If you don’t challenge your lender, the court will simply allow the foreclosure to proceed. It’s important to hold lenders accountable for their carelessness. This is the biggest asset in your life. It’s just a piece of paper to them, and one they likely either lost or destroyed.
When you get a copy of the foreclosure suit, many lenders now automatically include a count to re-establish the note. It often reads like this: “...the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” In other words, they are admitting they don’t have the note that proves they have a right to foreclose. If the lender is allowed to proceed without that proof, there is a possibility another institution, which may have bought your note along the way, will also try to collect the same debt from you again.
A Tennessee borrower recently had precisely that happen to her. Her lender, Ameriquest, foreclosed on her in July of 2007. About three months later, another bank sent her a default notice for the mortgage on the house she just lost. She called to find out what was going on. After being transferred from place to place and left on hold for lengthy periods of time, no one could explain what happened. They said they would get back to her, but never did. Now, she faces the risk of having her credit continually damaged for a debt she no longer owes.
FIGHT FOR YOUR HOME
This process is not intended to help you get your house for free (although that may very well be the end result if the lender Cannot Produce the Note). The primary goal is to delay the foreclosure and put pressure on the lender to negotiate. Despite all the hype about lenders wanting to help homeowners avoid foreclosure, most borrowers know that’s not the reality. Too many homeowners have experienced lender resistance to their efforts to work out a payment structure to keep them in their homes. Many lenders bear responsibility for these defaults, because they have put borrowers into unfair loans using deceptive, hard-sell practices, and then made the problem worse with predatory servicing.
Most homeowners just want these lenders to give them reasonable terms on their mortgages, many of which were predatory to begin with. With the help of judges who see through these predatory practices, lenders will feel the pressure to work with borrowers to keep them in their homes. Don’t forget--lenders made incredible amounts of money by using irresponsible practices to issue and service these loans. That greed led to the foreclosure crisis we’re in today. 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 them Produce the Note!
HOW TO USE PRODUCE THE NOTE IN JUDICIAL STATES
(In some states, a lender can foreclose on your home without going to court. These are called non-judicial foreclosure states. You can still use the “Produce the Note” strategy in these states, but it takes a few more steps on your part. See PDF Form 4, below, to see if your state is judicial or non-judicial.)
Steps To Follow:
If your lender has already filed suit to foreclose on your home:
Use PDF FORM 1. It’s a fill-in-the-blank legal request to your lender asking that the original note be produced, before it can proceed with the foreclosure. In some jurisdictions, the courts require the original request to be filed with the clerk of court and a copy of the request to be sent to the attorney representing the lender. To find out the rules where you live, call the Clerk of Court in your jurisdiction.
If the lender’s attorney does not respond within 30 days, file a motion to compel with the court and request that the court set a hearing on your motion. (Use PDF FORM 2, below.) That, in effect, asks the judge to order the lender to produce the documents.
The judge will issue a ruling at your hearing. Many judges around the country are becoming more sympathetic to homeowners, because of the prevalence of predatory lending and servicing. In the past, many lenders have relied upon using lost note affidavits, but in many cases, that’s no longer enough to satisfy the judge. They are holding the lender to the letter of the law, requiring them to produce evidence that they are the true owners of the note.
For example, in October 2007, Ohio Federal Court Judge Christopher Boyko dismissed 14 foreclosure cases brought by investors, ruling they failed to prove they owned the properties they were trying to seize.
If you are in default, but your lender has not yet filed suit against you:
Use PDF FORM 3. It’s a fill-in-the-blank letter to your lender which also requests they produce the original note, before taking foreclosure action against you.
If the lender does not respond and files suit against you to foreclose, follow the steps above.
HOW TO USE PRODUCE THE NOTE IN NON-JUDICIAL STATES:
In some states, a lender can foreclose on your home without going to court. These are called non-judicial foreclosure states. You can still use the “Produce the Note” strategy in these states, but it takes a few more steps on your part.
Here’s how it generally works:
In some states, a lender can foreclose on your home without going to court. These are called non-judicial foreclosure states. You can still use the “Produce the Note” strategy in these states, but it takes a few more steps on your part.
In a state with nonjudicial foreclosure procedures, a foreclosure sale can be initiated by the lender without using court proceedings.
Homeowners receive a “Notice of Intent” letter informing them that a foreclosure sale will be scheduled unless the overdue debt is paid within a certain amount of time.
If the debt is not paid accordingly, a “Notice of Sale” is then sent informing the homeowner that a foreclosure sale will take place at a particular time and place.
No lawsuit is ever initiated by the lender and the courts are not involved.
Without a lawsuit, you cannot use judicial procedures to require the lender to “produce the note.”
Merely sending a private letter to the lender “demanding” that it produce the original note to the borrower may be met with utter disregard or outright refusal by the lender.
Here’s what you can do:
In a nonjudicial foreclosure state, in order to protect yourself by demanding that the lender “produce the note,” it will be necessary for you to first actually file your own lawsuit. Even in such nonjudicial foreclosure states, no law prohibits you from instituting your own lawsuit challenging the right of a lender to foreclose on your property. The lawsuit would allege that:
The lender has sent a Notice of Intent to Foreclose
The homeowner is unsure as to whether the lender still possesses the original debt instrument, upon which the lender claims the right to foreclose
The homeowner wants proof of such authority
The court should intervene and prevent the foreclosure from taking place unless and until such proof is presented.
Note:
Initiating litigation to protect your rights is never a simple process. Requirements as to what must be contained in a pleading, how the facts must be plead, who should be named in the pleading, and how the pleading should be officially “served” on the lender, all differ from state to state.
Once a lawsuit is initiated, however, all states have judicial procedures that allow a party to require the other side to produce relevant documents, and the “produce the note” strategy can be used.
Often times, the best way to protect your rights in these situations is to seek professional help from an attorney licensed to practice in your geographical area. Getting involved in a lawsuit by representing yourself, especially if you file the lawsuit yourself, is not easy, but you can do it. Every citizen is able to represent themselves and file a lawsuit on their own. It’s called pro se, which means “on ones own behalf.”
If you can afford a lawyer, then by all means, hire one. There are attorneys who specialize in real estate matters, and either advertise or can be found in the yellow pages. Most areas have bar associations that maintain lists of attorneys willing to help in specific areas of the law.
Finally, there are usually “legal aid” organizations around set up to assist individuals who may have difficulty paying for the services of an attorney. A good place to begin your search is by going to the Legal Services Corporation website or contact your local United Way to see if you qualify for legal aid through their network. So, even if you are in a non-judicial foreclosure state, you can use “Produce the Note.” This is your home, and if you want to fight for it, you do have a way. Contact us if you need help understanding this process.
Here are the forms you'll need to use. All may be opened with the free Adobe Acrobrat Reader. This program comes pre-installed on most computers and usually will open these forms as soon as you click on the links. If you don't have it yet, you can download it for free on the Adobe website
PDF Download Form 1 (Legal Request to Lender)
PDF Download Form 2 (Motion to Compel)
PDF Download Form 3 (Letter to Your Lender)
PDF Download Form 4 (List of Judicial & Non-Judicial States)
If you need any help filing these, or finding information,
please don't hesitate to contact us!