Produce the Note: How to Save Your Home From Foreclosure

What is "produce the note"? Why is everyone talking about it? Does it apply to me? How can it help to save my home from foreclosure? All these questions will be addressed in this article.

What It Is: Produce the note is a defensive strategy that you can use to fight foreclosure and force the bank to prove that you owe it any money at all. In courts of law, the plaintiff has a "burden of proof", meaning that it has to put forth evidence that shows everything it says is actually true. However, when the plaintiff makes claims that the defendant does not challenge, then the court usually accepts the Plaintiff's claims on face value on the basis that you had a chance to contradict them and didn't.

When you say "produce the note" what you are doing is challenging the bank's assertion that you owe it money, that it has a mortgage on your house, and that it has the right to foreclose on you at all. One attorney has estimated that nearly 50% of mortgages have been lost or destroyed in the carnage of all the selling, pooling, servicing, tranching, and defrauding that went on in the years from 2001-2008 in the American Secondary Mortgage Market. 50-50 is pretty good odds of YOUR note coming up missing.

When Its Used:

Generally, during the discovery phase of litigation is the best time to employ "Produce the Note". That is, after you have sued the bank (say, for Quiet Title), or the bank has sued you (i.e., foreclosure). Discovery is the process by which each side of a pending lawsuit gets to ask the other side for all of the pertinent information with which it intends to prove its claims. For example, if you sue the bank for Quiet Title, then both parties have a right to request all the evidence in the other party's possession. The most basic piece of evidence here would be a "Note", which is the financial term for "mortgage" or other debt. Without a mortgage, then there is no document proving that you and the bank have an agreement, and therefore, the bank cannot prove its foreclosure claim against you.

Some proponents of "Produce the Note" suggest that ANYTIME is a good time for "Produce the Note" - even if there is no lawsuit going on. In some cases it may work, but the problem here is that there is no right to discovery outside of litigation. therefore, if you are not in foreclosure and you want to get the bank to have to produce the note, then find an attorney to evaluate your case for a quiet title case against whichever entity has a mortgage recorded against your home. Chances are, if the mortgage was sold more than once, SOMEONE forgot to make all the proper recordations, and you may just end up with your home free from any outstanding liens.

Third, an alternative used in bankruptcy, is to file Chapter 13 and list the bank note - NOT AS SECURED DEBT - but as UNSECURED DEBT. Similar to the discovery tactics above, this puts the bank of having to PROVE its mortgage in order to get the bankruptcy court to treat the debt as secured rather than unsecured debt.

How To Do It Right:

As hinted at above, if you want to get the most out of Produce the Note, you will wait until your guns are fully loaded: i.e., you are a party to an ongoing case, with a due process right to discovery. Send a "Request for Production of Documents" to the lender or servicer and demand examination of the original mortgage note at a place of your choosing. If the bank hasn't complied within 30 days, file a Motion to Compel Discovery. In your motion, refer the court to your proper Request for Production of Documents and to the bank's responses. Point out the bank's failure to comply with your request for it to produce the mortgage which it claims gives it a right to record a claim against your title, and ask the judge to compel discovery. If the bank has lost the note, then it will further fail to comply. At that point, file a motion to dismiss the bank's foreclosure action or at the very least to bar any evidence of a mortgage note as penalty for failure to comply with the court's order. It will be impossible for the bank to win. In the alternative, in a quiet title action, if the bank cannot comply, then you will be primed to win.

Word to the Wise: DO NOT rely solely on "Produce the Note." There are MANY possible claims and defenses that may come up in each case, and if you put all your eggs in one basket, you may get a rude awakening if your bank actually HAS your note. See an attorney, know your rights, and have a back-up plan.

The above article is not intended as legal advice, and is for informational use and entertainment only. If you are in need of legal advice or counsel, consult a licensed attorney in your jurisdiction who is competent in the area you need.