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"Produce the Note" Strategy for Judicial and Non-Judicial States
(Technique Used to Stall Foreclosures)
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Content provided from www.consumerwarningnetwork.com and law firm of James, Hoyer, Newcomer, Smiljanich & Yanchunis, P.A. www.jameshoyer.com
When a homeowner is faced with a foreclosure suit, “Produce the Note” requires the lender to prove it has the actual authority to foreclose, by requiring it to officially produce the original promissory note in the lawsuit.
During the lending boom, most mortgages were flipped and sold to another lender or servicer or broken up and sold to investors as securitized packages on Wall Street. In the rush 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. Now, lenders (who are now servicing -- collecting money -- on the loans they made) are moving to foreclose on homeowners, and they actually do not have the proper paperwork to prove they have a right to foreclose.
Judicial States: See Are you in a Judicial or Non-Judicial State?
When you get a copy of the foreclosure suit, many lenders now automatically include verbage like this “…the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” See example. This is an admission that they do not 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. Note: See below procedure for requesting the Servicer or Lender to produce the note.
Non-Judicial States: See Are you in a Judicial or Non-Judicial State?
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.” Just sending a private letter to the lender “demanding” that it produce the original note to the borrower may be met with outright refusal by the lender.
What to do if you are in a non-judicial state.
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 non-judicial 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:
1. the lender has sent a Notice of Intent to Foreclose;
2. the homeowner is unsure as to whether the lender still possesses the original debt instrument, upon which the lender claims the right to foreclose;
3. the homeowner wants proof of such authority; and
4. 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 usually not a simple process. One Borrower from Alabama (non-judicial state), however, did report that he had followed the following process successfully - in one day - and received a 45 day stay immediately, just one day before foreclosure.
One Borrower's experience:
1. Went to the Circuit Court and obtained a hardship affidavit. This allowed me not to pay the $315 filling fee upfront, but it will be required at the end of the case. The affidavit has to be signed by a Notary and signed by a Judge.
2. Filed a Complaint to Enjoin (Stop) Sale.
3. The Complaint was filed, and given a case number.
4. Had to get an Emergency Order to stop Foreclosure Sale and get the Judge to sign it.
5. Faxed the signed Order to the Servicer's lawyer and the sale was stopped.
Important: Requirements as to what must be contained in a pleading, how the facts must be pled, 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 (see below) can be used.
Recommendation: Seek professional help, if possible, from an attorney licensed to practice in your geographical area. Also, there are “legal aid” organizations set up to assist individuals who may have difficulty paying for the services of an attorney. See the Legal Services Corporation website.
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.”
Produce the Note Procedure to request Servicer/Lender to produce the note:
A. If your lender has already filed suit to foreclose on your home:
- Fill in the blanks on this form Legal Request (Word format) (PDF format) 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 (Word Format) (PDF Format) with the court and request that the court set a hearing on your motion. This action 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. They are holding the lender to the law, requiring them to produce evidence that they are the true owners of the note.
B. If you are in default, but your lender/servicer has not yet filed suit against you:
- Fill in the blanks of this Letter to the Lender (Word format) (PDF format). This letter requests that the Lender/Servicer 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 in (A) above.
This information is provided free of charge by Operation Restoration. Donations are critically needed to help this mission move forward. If this material has helped you or someone you love, please click on the Donate button below. May God bless you.
- Anne Batte, Executive Director
 Copyright 2009 Operation Restoration
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