Last Minute Strategy to Stop Foreclosure - Produce The Note

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Services for Real Estate Pros with Marketing with Kate

 

     Good Morning America ran a special report on a last minute strategy to stop Foreclosures this morning. 

         It's Called:  PRODUCE THE NOTE

 

        The basics:  Produce the Note encourages homeowners to make the lender prove that they have the actual authority to foreclose.   The only way to prove this is by producing the original promissory note.  Because of the way mortgages were packaged and resold in recent years, it is very difficult for the lender to come up with the note.  It is likely that they will eventually find it in their electronic database, but in the meant the foreclosure is delayed.   

Watch the Video Here:  The Consumer Warning Network 

The stragegy varies based on whether you live in a Judicial or Non-Judical state. 

Judicial States (those states where a lawsuit is required to foreclose) require that the homeowner simply file a request with the court.

In Non-Judicial states such as Callifornia, it's a little harder.  The homeowner must actually file a lawsuit against the lender and have the lender properly served.  More planning is involved and a lawyer should be consulted - but hey, it's your home!  Here are the details for using the strategy in non-judicial states.

Pass this information along so anyone you know that is searching for strategies to buy time and stop foreclosures.  Tell em to PRODUCE THE NOTE

 


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Topic:
ActiveRain Community
Location:
California Shasta County Redding
Groups:
California Short Sales, REO's, and Foreclosures
Dedicated Bloggers
Foreclosure Help and Prevention
Mortgages
Realtors®
Tags:
produce the note
stop foreclosure
foreclosure strategies
saving homes

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Rainmaker
598,820
Donne Knudsen
CalState Realty Services
Los Angeles & Ventura Counties in CA

Kate - Great info for the homeowner in trouble to know.  I actually heard about this practice a couple of months ago from a Realtor friend who had a client who tried it (we're in CA) and you were right that it really had no effect on the big national lender (who took bailout money) until the homeowner hired an attorney.

Just recently, I met with a woman who was referred to me by a friend who said her friend needed to refi her loan.  In the first 60 seconds of talking to this wowan, I realized that refing her loan was the least of her problems.

I mentioned this foreclosure delaying tactic but informed her that she would need legal representation in order for the strategy to buy her some time to get caught up on her mortgage (as well as take care of another legal matter she had).

She has since retained an attorney and they are moving forward with getting the lender to "produce the note".  I'm going to stay in touch with the woman; we really clicked when we met and I like her and care about what happens to her.  But it will be interesting to see how this will play out in a CA court.

February 25, 2009 09:37 AM
Rainmaker
289,811
Kate Bourland
Onlilne Marketing Mobile Marketing
Marketing with Kate

Donne, thanks for sharing your experience.  I was wondering if anyone had any experience here in California.  Please do drop back by and let us know how your client is doing.

This is encouraging. 

February 25, 2009 10:39 AM
Rainer
36,058
Libby Cousins
Contract Mortgage Processor
Extraordinary Processing

I can see how that could be a great tactic. I am sure there are several "lost" notes out there. At the very least, the lender will have to get to their paper files which is usually stored at a separate facility near their corporate office. I had to request some documentation from files several years ago when I worked at GMAC Mortgage and that could take a month or more. I can only imagine how long it would take now.

I'll check back and see what others have to say about this as well.

February 27, 2009 01:22 AM
Rainer
3,400
Joanne Johnson

I had heard of this strategy recently also and although it is a bit "cheeky" I think it could be a great trump card to play in a situation where a bank is dragging out a short sale and the homeowner is at risk of running out of time.

June 02, 2009 07:03 PM
Rainer
34,589
Steve Hula
All Star Real Estate - Team Hula
All Star Real Estate

I have been told, by an attorney, that an individual can sell their home, as long as it is closed prior to the Foreclosure Auction date posted on the Foreclosure notice? An individual who is being foreclosed on has to be given 3 - 4 months prior notice from their lender.

June 12, 2009 11:14 AM
Rainer
47,149
Robin Basichis
Rosen Company West/Diversified Real Estate Consultants L.L.C

Asking the lien holder to produce the note is a good stalling tactic.  However there is a loophole in the law that allows the lien holder to produce an affidavit as to the of loss of original note from an unfortunate occurrence like a robbery, fire or a flood.  The lien holder must submit the affidavit to the court at least twenty days before foreclosure proceedings.  If they do not submit an affidavit of loss of note they are not supposed to be able to foreclose at time of sale.  They are then givien time to submit the affidavit and set up another sale date. What this move does it buy you or your client time to try and work out an agreement with the lender so he won't foreclose.    

December 01, 2009 04:56 PM
Rainmaker
289,811
Kate Bourland
Onlilne Marketing Mobile Marketing
Marketing with Kate

Robin, this is good information.  As I understand it, the process works better in judicial states than it does in non judicial states like CA.

It's certainly worth a try if you really think that there is a way to keep the home with a solid loan modification.

December 03, 2009 02:28 AM
Anonymous #10
Anonymous
Bruce Edminster

Response to Robin Basichis,

If the Lender were to file an affidavit alleging that the original note was stolen or lost in a fire, they then would be asked to produce the loss report to their insurance company in the case of fire or a Police report in the case of a robbery. Most of the time they will not be able to produce such documents, or will not because of the risk of being charged with pugery, because these are almost allways fraudulent claims made by lenders to get out of the problem of trying to produce the note. That is the tact I would pursue. 

December 05, 2009 10:48 AM
Rainmaker
289,811
Kate Bourland
Onlilne Marketing Mobile Marketing
Marketing with Kate

Bruce, this is turning into an interesting thread.  Thanks for sharing.

December 06, 2009 12:56 AM
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Rainmaker
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Kate Bourland

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