Produce the Note

[Z-man]

Interesting video on how people are stalling foreclosures. Link to article.
The premise is this: if you ask the foreclosure agent to "produced the note" of your original mortgage agreement, it may take months for them to show you a copy of this, given that the loan has probably exchanged hands, been bundled and traded ad nauseum on Wall Street. So this stall tactic can buy you some time, to supposedly find a job or another home to buy.

So if they can't 'prove' that you signed papers, then you doin't have to pay back your load! What a croc of bull! (If I were a loan collector, then I would counter with, "well, you need to prove that you are legally occupying this house - otherwise, you will need to vacate the premises." Then the home owner would be forced to produce their own note! )

A little of my background: in 2007, I paid off my mortgage. Granted, I didn't have that great of a mortgage payment (my dad helped out with a hefty downpayment), but still, I paid off my house the old fashioned way which nowadays means you pay the bank back what you agreed upon in your original loan.

So this video really gets my goat. Some highlights of what I mean:

Originally Posted by dumb lady- Kathy Lovelace from Tampa

I am going to fight them tooth and nail 'cause they are crooks! They're out there sitting in their million dollar homes while we're out here scrimping and no electricity...

So this has nothing to do with the fact that you lost your job and can't pay your mortgage? So now the banks are crooks because you lost your accounting job?
Funny, you didn't think of that when you signed the mortgage papers, did ya? If you didn't understand how the mortgage works, then you don't deserve to live in a house!
Yes, the banking industry has a lot of corruption - but did anyone ever hear of the good old fashioned phrase "buyer beware?"

Lady#2 owes $145k on a $39k house due to multiple refinancing

HEY LADY - the fact that you owe $145k on your dumpy 2 bedroom home is because you kept on refinancing and YOU SPENT THE FREAKIN' MONEY! Now, the banks want their money - that you legally owe them!
(At least she does say that she wants to pay and hold onto the house.)
But then she says this:

Originally Posted by Lady #2

I have a right as an American citizen to file something and put a stop to something myself.

WHAT?!?!? First off, she doesn't even know what she's fighting for - she just knows that requesting them to "produce the note" will delay the collectors from knocking on her door.

Originally Posted by lady #2

Well, if they can't prove that I owe them, why should I pay them!

WHAT?!?!??! Ok - so if she can't prove to the banks that she bought the house, why should they let her stay in the house?!?! This is lunacy!

Originally Posted by lady #2

Mortgage companies will not work with their borrowers. I've been told that I can't do a loan modificaiton there's not enough time...

During these days, the mortgage companies are working with their borrowers - they are doing more than they should - they don't want the houses - they want the money, which the borrowers agreed to pay them!

Now don't get me wrong - we are in dire straits. Times are difficult. The mortgage banking industry is in shambles and there have been a lot of corruption in that business. But geez folks - maybe if you didn't take out loans against your house to pay for stuff you probably didn't need, you wouldn't be in this predicament!

Old fashioned common sense is out the door. If I cannot afford something, I don't get it. If I were to loose my job and I have a mortgage payment, I'll go find a job - ANY job - to protect my house. I'll pump gas, work in retail - whatever.

Ok, end of rant...

What are your thoughts?
-Z-man.

[Porsche-O-Phile]

Why is this such a crock of bull?

Without this provision, what's stopping you or me from sending out a bunch of foreclosure notices to people claiming to be the legal holder of their note?

While I believe hands-down that the current crisis is overwhelmingly the fault of foolish/stupid individuals buying beyond their means, the banks and lenders who were simply doing "pump and dump" loans are partially culpable too. Let them get whacked for it. Maybe it'll send a message that (gee-whiz) maybe it's actually smart to keep good records or (god forbid) hold your own paper instead of using it as a leverage vehicle.

I can't say I have a lot of sympathy for ANYONE who got the muck from this recent housing bubble on their hands. EVERYONE who participated is to blame and if the banks can't produce the notes, then to hell with 'em.

[mudman]

Originally Posted by Z-man

Old fashioned common sense is out the door. If I cannot afford something, I don't get it. If I were to loose my job and I have a mortgage payment, I'll go find a job - ANY job - to protect my house. I'll pump gas, work in retail - whatever.

I'm with you all the way Z, but around here there is nothing going on. I wouldn't mind taking any job right about now (well, two/three weeks ago, things are fixed now) but there is nothing legit. I've been trying to pay bills doing odd jobs and doing better than if I was working a 40hr/wk job @$18 or so/hr. But for folks with less charisma and fewer skillz there aren't any gas pumping jobs near me.

NOT that that makes it reasonable to blame someone else for your stupidity or bad luck.

[Rick Lee]

I don't know exactly how a foreclosure works in practice, but I'm guessing the sherriff doesn't come to toss someone on the street without having the correct documentation from the lienholder. And I'm pretty sure they get a few days notice tacked up on their door after repeated attempts to contact them, collect payment, make some kind of arrangements or anything short of foreclosure that the homeowner simply ignores or cannot comply with. Remember - no one wins in a foreclosure. Everyone loses, bank, homeowner, renter, neighbors, HOA, city/county - everyone. And if they make it harder to toss out deadbeats, then it will also become harder - and more expensive - for responsible folks to buy houses. My guess is there will eventually be some kind of new standardized document you sign at closing agreeing to vacate the residence X number of days after umpteenth foreclosure notice and it will strip you of all recourse.

[ramonesfreak]

i didnt read the article but re:

Lady#2 owes $145k on a $39k house due to multiple refinancing

OK, the lady might be an idiot but what kind of lender loans this kind of money without doing due diligence...like doing a simple appraisal to see what the value of the house is?

I think its too easy for us to criticize many of these home buyers. I personally felt confident in my own home purchase, but, ive got a 4 year business degree and a law degree. Even with that, much of the fine print went in one ear and out the other

[Rick Lee]

Originally Posted by srandallf

i didnt read the article but re:

Lady#2 owes $145k on a $39k house due to multiple refinancing

OK, the lady might be an idiot but what kind of lender loans this kind of money without doing due diligence...like doing a simple appraisal to see what the value of the house is?

She probably got a 100% loan when the house was at its peak value in 2005. Now she's way upside down on it.

[Z-man]

Originally Posted by Rick Lee

She probably got a 100% loan when the house was at its peak value in 2005. Now she's way upside down on it.

Nope - the clip states that "after multiple refinancings, she owes $145k on the house." IE: She used the house as collateral multiple times. With with a variable rate mortgage, it would be impossible to swell a $45k loan to $145k. Betcha she's got a Lexus in the driveway...

-Z

[flatbutt]

but why go to the aid of a person that wasted the borrowed money instead of paying off the mortgage? I paid for my house and then got a new mortgage for necessary repairs. I only borrowed what was needed and even paid for some aspects of the job out of pocket when I could raise the money. NONE of my mortgage money went to a car or a TV or a vacation.

[Rick Lee]

Originally Posted by Z-man

Nope - the clip states that "after multiple refinancings, she owes $145k on the house." IE: She used the house as collateral multiple times. With with a variable rate mortgage, it would be impossible to swell a $45k loan to $145k. Betcha she's got a Lexus in the driveway...

-Z

On second thought, she might have just had an option ARM and only ever paid the minimum, building up a ton of negative equity.

[Zeke]

A notarized copy of the note is on file at the county offices. I really doubt a judge would require more than that.

[Noah930]

I'm with Z-man on this. It's despicable that home-occupiers (they're not really home-owners, anymore, are they?) would try this stall tactic. Total technicality they're bringing up. After all, they're reneging on their end of the bargain to pay off the note. The bank (or whomever) didn't renege on their end of the deal to provide the money to purchase the thing from the previous owner, after all.

But hey, if sleazy home-occupiers can use this argument of "show me the contract where I owe you money," then I think it's fair game for said banks to reverse the argument and require the home-occupiers to prove that they're legally allowed to live in the home. What's the difference between what these home-occupiers doing and being a squatter? Can't prove that you belong in this house? Well then, you're trespassing and you're gonna get tossed out on your kiester, effectively immediately.

[m21sniper]

Originally Posted by milt

A notarized copy of the note is on file at the county offices. I really doubt a judge would require more than that.

Obviously that's not the case milt, because this stalling tactic is said to be able to delay the process by months because these loans have been packaged and repacakged. The original owner of the note no longer owns it. It has changed hands innumerable times.

[m21sniper]

Originally Posted by Noah930

I'm with Z-man on this. It's despicable that home-occupiers (they're not really home-owners, anymore, are they?) would try this stall tactic. Total technicality they're bringing up. After all, they're reneging on their end of the bargain to pay off the note. The bank (or whomever) didn't renege on their end of the deal to provide the money to purchase the thing from the previous owner, after all.

But hey, if sleazy home-occupiers can use this argument of "show me the contract where I owe you money," then I think it's fair game for said banks to reverse the argument and require the home-occupiers to prove that they're legally allowed to live in the home. What's the difference between what these home-occupiers doing and being a squatter? Can't prove that you belong in this house? Well then, you're trespassing and you're gonna get tossed out on your kiester, effectively immediately.

Yes, god forbid that an honest middle class family who had both parents laid off should try to utilize all available means to hold onto their home while desperately searching for work.

Are you for friggin' real?

[teenerted1]

Originally Posted by Z-man

Nope - the clip states that "after multiple refinancing, she owes $145k on the house." IE: She used the house as collateral multiple times. With with a variable rate mortgage, it would be impossible to swell a $45k loan to $145k. Betcha she's got a Lexus in the driveway...

-Z

i look at it this way...what idiot gave $145 credit on $45k collateral.

wouldnt these multiple mortgages put up a red-flag " 'hey we might lose out on this one'...'NO YOU CANT HAVE THE MONEY' "

both partys are to blame here and if the one currently holding the note cant produce the note how are we to know the current note holder is the one due the money...sure some are using the system but if the system didn't allow all these swaps of notes the we wouldnt be in this mess.

[Zeke]

Originally Posted by m21sniper

Obviously that's not the case milt, because this stalling tactic is said to be able to delay the process by months because these loans have been packaged and repacakged. The original owner of the note no longer owns it. It has changed hands innumerable times.

When you sign the note, you also sign an agreement that it may be transferred to anyone, but the terms remain the same. The exchange of mortgagors has nothing to do with what you signed. Your signature, notarized, is all the judge needs to see. I say judge, because anyone holding the deed can get a judgment against you if you default.

Getting your car title when you finish off the payments is sometimes a tough thing to do. When the bank or lender signs off on a form, the DMV generates a new title. Forget seeing the original these days.

[Dueller]

Originally Posted by milt

When you sign the note, you also sign an agreement that it may be transferred to anyone, but the terms remain the same. The exchange of mortgagors has nothing to do with what you signed. Your signature, notarized, is all the judge needs to see. I say judge, because anyone holding the deed can get a judgment against you if you default.

Getting your car title when you finish off the payments is sometimes a tough thing to do. When the bank or lender signs off on a form, the DMV generates a new title. Forget seeing the original these days.

Jurisdictions vary but as a general rule, the note itself is not filed in public records. Typically you have the instrument of conveyance; i.e., the Warranty deed and the instrument of encumbrance; i.e., a mortgage or deed of trust. These are filed as public records to show a) you have the right to the property (deed) and that b) it has a lien/encumbrance on it (deed of trust) by your lender so you can't sell it without the lien for the note following it.

The deed of trust essentially deeds the property back to a trustee for your lender that has the right to foreclose on behalf of the lender if you don't make your payments according to the terms of the note. These terms are typically stated in the deed of trust but they are not the note itself. When a foreclosure occurs the trustee gives a Trustee's deed either to the buyer at foreclosure or the bank if there are no buyers or the bids are too low. Typically a bank will enter the first bid as the amount due and owing on the note.

So I can see where this would be a ploy to stall a foreclosure in light of the fact the note, as a negotiable instrument (i.e.; it can be bought and sold), could have gone thru mul;tiple owners. Each time that happens, the deed of trust should be updated in the public records to show who the note is assigned to....that is where you really can cause some confusion/delays. For example: I take out a note with Bank A who sells it to Bank 2 who sells it to Bank C who sells it to Bank IV....if Bank iv COMES TO FORECLOSE, THEY BETTER BE ABLE TO SHOW how they ended up with owning your note by the puiblic records. Most of them do a good job, but sometimes not.

[Zeke]

Originally Posted by Dueller

Jurisdictions vary but as a general rule, the note itself is not filed in public records. Typically you have the instrument of conveyance; i.e., the Warranty deed and the instrument of encumbrance; i.e., a mortgage or deed of trust. These are filed as public records to show a) you have the right to the property (deed) and that b) it has a lien/encumbrance on it (deed of trust) by your lender so you can't sell it without the lien for the note following it.

The deed of trust essentially deeds the property back to a trustee for your lender that has the right to foreclose on behalf of the lender if you don't make your payments according to the terms of the note. These terms are typically stated in the deed of trust but they are not the note itself. When a foreclosure occurs the trustee gives a Trustee's deed either to the buyer at foreclosure or the bank if there are no buyers or the bids are too low. Typically a bank will enter the first bid as the amount due and owing on the note.

So I can see where this would be a ploy to stall a foreclosure in light of the fact the note, as a negotiable instrument (i.e.; it can be bought and sold), could have gone thru mul;tiple owners. Each time that happens, the deed of trust should be updated in the public records to show who the note is assigned to....that is where you really can cause some confusion/delays. For example: I take out a note with Bank A who sells it to Bank 2 who sells it to Bank C who sells it to Bank IV....if Bank iv COMES TO FORECLOSE, THEY BETTER BE ABLE TO SHOW how they ended up with owning your note by the puiblic records. Most of them do a good job, but sometimes not.

You've done a better job than I explaining it. And,of course, you're correct about how the system works in CA. So, I missed a few details. But, I'll bet "Bank IV" has got their ducks in a row, in 99% of the cases.

The only original note I've ever recovered is when I refinanced a loan that I had set up myself for collection at a local bank. The first lender was private. On other refi's, I got copies of the paperwork signed by the county. Never got an original note back except as mentioned. I also got a new document for the pay off they call reconveyance, which was recorded.

[pwd72s]

I can dig Z-man's rant here...it's true that those who played by the rules are about to get hosed. We pay. Others get "stimulated".