Lenders Must Produce The Note

By
Real Estate Agent with GreatWest Realty DRE# 00827565

Awhile back, I was alerted by a past client of a video posted on CNN titled, "Lenders Must Produce The Note."  The video speaks to the current arena of home mortgages, where troubled homeowners are often twarted in their efforts to negotiate with their lenders to avoid foreclosure.  Because so many mortgages were bundled, packaged and sold as derivatives on Wall Street, actually finding the entity that has your note can sometimes become difficult.  There is only one original note for your mortgage that has your signature on it. This document proves you owe the debt and they should know WHO OWNS THE NOTE?

According to the video, knowing three words, "Produce the Note" can delay foreclosure and create negotiating space.  Here's a link to the video and a couple links to articles relative to the topic.

Who Owns Your Mortgage: 

http://www.huffingtonpost.com/2009/09/22/whos-got-the-mortgage-pro_n_294169.html

Produce the Note:

http://www.ajc.com/services/content/business/stories/2009/02/24/produce_the_note_foreclosure.html?cxtype=rss&cxsvc=7&cxcat=6

If nobody owns your mortgage note then you are in luck Lance Wiggs says you are in luck:

http://lancewiggs.com/2008/07/28/if-nobody-owns-your-mortgage-note-then-you-are-in-luck

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Ambassador
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Paul S. Henderson, REALTOR®, CRS
RE/MAX Northwest. - Tacoma, WA
Tacoma Washington Agent/Broker & Market Authority!

Recently, I had 2 transactions recently where the note was no where to be found...

Sep 29, 2010 11:51 AM #1
Rainmaker
1,317,476
Joan Whitebook
BHG The Masiello Group - Nashua, NH
Consumer Focused Real Estate Services

Myrl ~  This is quite interesting.  I wonder how often no on knows where the original note is. I'll have to watch the video when I have a few moments.

Sep 29, 2010 12:01 PM #2
Rainmaker
2,519,231
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Paul - The thing that worries me, is that some of the lenders when they sell these foreclosures, want to use their "own" title and escrow companies.  I recall one of these title companies, appeared out of nowhere, had an unusual name, and was using office furniture that was mix and matched.  I worry about the quality of those titles, in this environment.  I suspect that a lot of those companies will disappear in the dead of night.

Sep 29, 2010 12:05 PM #3
Rainmaker
2,519,231
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Joan - The video is very interesting!  I think you will learn a lot watching it!

Sep 29, 2010 12:06 PM #4
Rainer
321,406
Jack Mossman - The Nines Team at Keller Williams in Stockton
The Nines Team At Keller Williams - Stockton, CA
The Nines Team at Keller Williams in Stockton

OK .. time to haul some of my files down to the attorney!  I've files where owners have asked for signed "contracts" and don't even have them, much less the note!  Thanks Myrl ... for sharing and getting me thinking in a more aggressive and pro-active way!

Sep 29, 2010 01:06 PM #5
Rainmaker
2,519,231
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Jack - I have sometimes wondered if some of the bank delays in short-sales, etc., are caused because the banks simply don't have their ducks in a row when it comes to these notes!

Sep 29, 2010 01:41 PM #6
Ambassador
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Richard Iarossi
Coldwell Banker Residential Brokerage - Crofton, MD
Crofton MD Real Estate, Annapolis MD Real Estate

Myrl,

It's a complicated world we live in. I'm sure the Courts will eventually figure it out.

Rich

Sep 29, 2010 02:49 PM #7
Rainmaker
2,519,231
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

Rich - It really is!  I have had that conversation with myself almost on a daily basis the last few years!  Things are changing so rapidly.  And it isn't simple changes!

Sep 30, 2010 01:21 AM #8
Ambassador
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Myrl, A loophole in their record keeping. I like that. One of your comments above  about the owner not finding their own contract can be aleiviated by using the on line transaction like one produced free for CA agents, RELAY.

But there are others and it would have everything including communications. This may be manadortry one day and people should understand the value that it can serve.

Sep 30, 2010 05:09 AM #9
Rainmaker
2,519,231
Myrl Jeffcoat
GreatWest Realty - Sacramento, CA
Greater Sacramento Real Estate Agent

William - Any transaction system which would assist in communication between all parties should be helpful.  One of my bigger concerns, is that many of these transactions have lenders demanding that we use THEIR title and escow companies.  I remember one REO transaction with a buyer of mine.  The bank required that we use a title company that just popped up a couple of months earlier in our area.  The furniture in that place was mix-matched.  There was a shortage of file cabinets, and files were stacked shoulder high against walls and desks.  I felt really uneasy during much of that sale.  I checked and double checked every document that came out of that place before my client signed.  

The revolving doors which promissory note paper was being slammed through, in those crazy days of credit default swaps still leaves room for reveal.  It wasn't uncommon for homeowners to get payment coupons from a new lender every couple of months or so.  I remember one month, a friend of mine received two coupons, from two seperate lenders for the same mortgage! 

Sep 30, 2010 05:21 AM #10
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Myrl Jeffcoat

Greater Sacramento Real Estate Agent
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