Mortgage Modification: “Produce the Note”
We are headed for an extended economic downturn and who knows where home values will be when we stabilize. No one knows how we will cope with the new housing market realities…what assistance will be lent, what sacrifices will have to be made, etc. So, fighting to keep your home seems more important than ever. Whatever the outcome of this tumble it will be (as it’s always been) better to own than not to own.
I’m advising all my clients to file aggressive mortgage modification requests and negotiate hard. It’s time to get good mortgage mods fast.
A client in WA this week used a strategy called “Produce the Note”. He has applied for loan mods on several of his rental homes but his current income (construction tradesman) fails to qualify him for them. He decided to take a stand and try every measure to keep his primary residence in WA. He anticipates that his income will be up by summer. He filed a formal Request for Documentation with the county court in the jurisdiction of the home. A copy of the form he used is below.
By filing this request he is asking the court to force the lender to produce the original loan docs to prove that they were executed properly and that the current “owner” of the note (investor) actually has a right to pursue the foreclosure. Apparently, the lenders have not been diligent about keeping a great paper trail in the sales/resale/re-resale of these mortgages. Doesn’t that just surprise us?! All foreclosure activity will stop until the lender can comply
A University of Iowa study last year suggested that companies servicing mortgages are often negligent when it comes to producing the documentation to support foreclosure. In the study of more than 1,700 bankruptcy cases stemming from home foreclosures, the original note was missing more than 40 percent of the time, and other pieces of required documentation also were routinely left out.
Democratic Rep. Marcy Kaptur of Ohio endorsed the strategy in a fiery speech on the House floor during debate on the federal bank bailout last month. “Don’t leave your home,” she said. “Because you know what? When those companies say they have your mortgage, unless you have a lawyer that can put his or her finger on that mortgage, you don’t have that mortgage, and you are going to find they can’t find the paper up there on Wall Street.”
April Charney, head of foreclosure defense for Jacksonville Area Legal Aid in Florida, said the strategy has been so successful for her that she now travels around the country to train other lawyers in how to use it. She said she has gotten cases delayed for years by demanding that lenders produce paperwork they cannot find.
How to Get a Loan Modification?
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