Last Minute Strategy to Stop Foreclosure - Produce The Note

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.

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.

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.

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.

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.