Good Morning America, CNN and others have highlighted a new tactic that home owners facing foreclosure are using to stall the foreclosure process: asking the bank to produce the note. The basic idea is that the home owner facing foreclosure is entitled to a copy of the original note that they signed mortgaging their house. With the convoluted origination, securitization and servicing structures that sprung up during the boom this simple request is harder to fulfill than you might imagine.
Home owners are using this to buy months of additional time in their home by sending banks on the sometimes wild goose chases that can result in trying to fulfill their home owner’s request to produce the note.
A web site, Consumer Warning Network, provides the paperwork and know-how borrowers need to fire the “produce the note” salvo and slow down the foreclosure train.
Here’s the segment on the produce the note foreclosure stalling tactic from Good Morning America:
Now, to me this just seems like a way to increase the costs of banks which in the end make home lending more expensive. And the woman who refinanced her home from $39,000 to almost $150,000 isn’t the shining example of responsibility; but when you’re desperate you’re desperate. Regardless if you’re behind on your payments or not you’re entitled to certain rights. One of those rights is the right to a copy of the note your signed.
It may make sense if you’re close to getting a loan modified or selling your home or starting a new job or winning the lotto, but most likely not. However, if you don’t feel responsible for mortgaging your home to the hilt, you probably don’t care so much about gaming the system to stay in it longer.
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