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Homeowners facing foreclosure are receiving a simple piece of advice to help stall foreclosure: make the other side "produce the note." As it turns out, many lenders seeking to foreclose seem to have lost track of the original promissory notes for the mortgages in question. Though by no means a long term solution, forcing the lender to produce the note can delay foreclosure proceedings and give the lender increased incentive to negotiate.
While securitized bundles of toxic mortgages have been blamed for much of our current economic malaise, there is one bright spot they offer to some homeowners facing foreclosure. When their original lender sold off their mortgage, and it got packaged, sliced and diced into securities sold all over the world, many times the original promissory note got lost in the shuffle.
Along with others, the Consumer Warning Network is actively pushing the "produce the note" strategy as an effective means of delaying foreclosure and creating additional incentive for lenders to renegotiate payment terms.
As described in Consumer Warning Network's How-To, the strategy works as follows:
Consumer Warning Network's How-To includes free forms for requesting production of the promissory note, and also for filing a motion to compel. The group warns against scams offering "produce the note" forms for a fee.
Consumer Warning Network cites an increased tendency in judges to hold lenders to the letter of the law in the surging number of foreclosure cases, including the New York Times report of an Ohio federal judge who threw out 14 cases in 2007 when investors trying to foreclose could not prove ownership. April Charney, head of foreclosure defense for the Jacksonville, Florida Area Legal Aid also uses and strongly advocates the "produce the note" strategy. As reported in the Florida Union Times, she says that for some of her clients, it has put foreclosure on hold for years.