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A Simple Tactic To Delay Bank Foreclosure

by The Happy Rock on March 4, 2009

Predatory lending, dramatic home price increases, irresponsible lending, irresponsible borrowing, and the current economic climate is making foreclosures more common than ever.  Often people just walk away from their homes and let the banks easily assume control, but here is a way to help stall your foreclosure so that you can get back on your feet or renegotiate with the lender.   It requires just three simple words :

‘Produce The Note”

This isn’t a magic phrase to help you get a free house from the bank, but an attempt to use the legal system to help put off your foreclosure and put the pressure on banks to work out a deal.    What you are asking is for the lending company to produce the original papers that you signed when you initiated the mortgage. This is the key piece of evidence that proves you actually owe the bank the money.

The goal is to make sure the company attempting to sue you actually has the right.  If you don’t challenge the bank the courts will usually just let the foreclosure proceed without the proper paperwork. Companies are often unwilling to work with their delinquent payees unless their hand is forced.

Why does this work?

During the housing and mortgage bubble zealous lenders were often less than diligent with their paper filing and loans were often transferred around from company to company.    Often loans don’t even have the proper paperwork filled out at all.

Even if the lender does have the papers it might take them a while(months) to produce them.  If the lenders don’t have the papers, they are often eager to work out a new agreement and get a fresh signature.  Sometimes judges have been known to throw the foreclosure out a court all together.

The Consumer Warning Network was the original site to break the strategy and they have the best coverage of the produce the note strategy.  Here is the main how to article that includes video and text instructions along with legal templates to produce the appropriate letters. Here are some success stories of the “produce the note” strategy. Finally, below is Good Morning America(GMA) segement on the “produce the note strategy”.

{ 5 comments… read them below or add one }

ed March 4, 2009 at 3:13 pm

I don’t know, man. This seems kind of slimey. “If they can’t show proof that I owe them, then I’m not paying”.

Perhaps, I ought to try that even though I’m not in loan default…that would give me more time to save for that big screen TV I’ve been wanting.

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ed March 4, 2009 at 3:31 pm

I think this is morally wrong. These people know that they took out a loan and that they owe the bank. The one lady was an accountant for pete sake! They are just trying to create an obstruction to avoid paying they debtors. In short, they are lying. Shameful, shame on them.

Please do not emulate them. Pay your debts and avoid more debt.

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The Happy Rock March 4, 2009 at 3:57 pm

@ed – Obviously I don’t think we agree or I wouldn’t have posted the article.

First, you can’t get out of paying your debt and keep the house. You don’t own the house. If you don’t pay the owner gets to take it back, hence foreclosure.

The other area that we don’t agree is that people are using the tactic to abuse the system. Sure, people will abuse it just like anything else, but that doesn’t mean the strategy is evil. People aren’t saying that they don’t want to pay, people have already showed they can’t afford to pay. If they could pay, they wouldn’t be in foreclosure. How they got in the mess, doesn’t matter too much whether it was greed, mistake, lack of knowledge, predatory lending, etc. The point is that both parties are willing conspirators and are going to get hurt. This method is helpful to help people get back to paying after say a job loss or to encourage the bank to work out a deal so that they can afford the house. If it wasn’t worth the banks time and money they wouldn’t work deals. If they think foreclosure is a better option they will prove that they own the property and have the right to foreclose and you lose the house and have a huge black mark on your financial record.

Also I don’t see any lying going on. These are all legal documents and requests, so lying would be a big no no. Most people’s mortgages are also passed around from company to company like candy, so lots of mistakes do happen. There are stories of people be foreclosed on twice by two different companies, etc. Estimates put the missing or bad paperwork around 50% on loans done in the last few years.

Final point. You don’t “save’ for a big screen TV, you put it on credit cards, silly!

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Karla (threadbndr) March 12, 2009 at 3:55 pm

There’s another issue here – is the company that is involved even the one that actually HOLDS your note? My late husband and I had a mortgage when the LAST housing/bank melt down occured (anybody here old enough to remember the Savings and Loan debacle in the 1980s?)

Our mortgage was sold 8 times in 12 months. I kid you not, there was one time that we got notifications from two DIFFERENT banks in one billing cycle. It was a nightmare. We were never in arrears on the mortgage, but I spent a ton of time on the phone and had to do a couple of stop pays / reissue (with the resulting fees on checks).

It’s never a bad thing to have all your legal ducks in a row.

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Kevin Jones July 4, 2011 at 6:57 am

Yes indeed it becomes a nightmare. I am sorry to hear your story Karla.

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