Produce the Note: the phrase on everyone's lips. Its hard to turn on the news or browse the web without hearing about foreclosures, bank closures, store closures, well how about just getting a little closure on this trying chapter of your life? If you are interested in learning more about the "Produce the Note" litigation strategy against a foreclosing lender, check out this new 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. Under due process, the plaintiff in a case has the "burden" to prove that what it is telling the court 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.

The essence of "Produce the Note" is challenging the bank's assertion that it has a mortgage, you owe it money, and it has a right to foreclose. 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. so, if you have not gone into default or had foreclosure filed against you, and still suspect the bank has lost your note, then find an attorney who will file a quiet title case against your bank. 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. First, shed light on the bank's failure to comply with your proper discovery request for the most relevant document in the case, then ask the judge to compel production of the note. 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. The bank cannot possibly 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 base your entire case on "Produce the Note." Any given case has dozens of potential claims and defenses, and you may be setting yourself up for disappointment to rely solely on "Produce the Note" is the bank has the original. See an attorney, know your rights, and have a back-up plan.

The preceding article and information are not intended to be used as or taken for legal advice, and are for entertainment and informational use 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.