Tell your bank – Produce The Note!

Published: March 12, 2009

Tell the Banks – produce The Note!

Don’t Leave Your Home – Squat.

That’s the advice of Representative Marcy Kaptur, 14 term Democratic Representative from Ohio and the House’s longest serving woman legislator.

Of course the ‘Produce The Note’ theory isn’t exactly new and it’s not exactly successful, but it’s a novel idea and good for a little free press. You can read a full article here: Kaptur – Don’t Leave Your Home.

You should know that Kaptur serves a slice of Ohio that graces the shore of Lake Erie from just west of Cleveland over to Toledo. Even in the good old days this area was referred to as ‘The Rust Belt’. Two of America’s Fastest Dying Cities, ( are in an adjacent district and another three are just up the road in Michigan. Unemployment bumping 25% and higher in some locales has produced an epidemic of foreclosures. She has been critical of the Presidents programs stating they do not adequately address the foreclosure issue in her district.

Of course we already know the Presidents programs don’t adequately address the foreclosure issue in California either. With qualifications including Fannie & Freddie owned loans (not many in CA), and the loan to value range of 80% to 105% (try 150%), fewer than 2% of Californians may benefit. . Two very different circumstances – same result – no help.

Anyway, the theory goes, Because of the way sub-prime loans were made, parceled, bundled into securities and sold and resold, the foreclosing bank may not actually have your original note. The contract between you and the bank. It exploits a legal technicality that says your note must be available for the final settlement to occur.

In a recent speech before Congress Kaptur suggested:

“Don’t leave your home. 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.”  Possession is nine-tenths of the law, therefore, stay in your property. Get proper legal representation … [if] Wall Street cannot produce the deed nor the mortgage audit trail … you should stay in your home. It is your castle. It’s more than a piece of property. … Most people don’t even think about getting representation, because they get a piece of paper from the bank, and they go, ‘Oh, it’s the bank,’ and they become fearful, rather than saying: ‘This is contract law. The mortgage is a contract. I am one party. There is another party. What are my legal rights under the law as a property owner?”

“If you look at the bad paper, if you look at where there’s trouble, 95 to 98 percent of the paper really has moved to five institutions: JPMorgan Chase, Bank of America, Wachovia, Citigroup and HSBC. They have this country held by the neck.”

Kaptur recommends calling the local Legal Aid Society, Bar Association or 888-995-4673 for legal assistance.

Is it working? There have been some intermittent successes but more often than not the only result is to prolong the inevitable. According to the American Securitization Forum, a group that represents banks, law firms and investors, the original note is almost always electronically stored and will eventually be retrieved. Judges are increasingly willing to accept electronic documents these days but it creates a delay, which, according to a spokesman for the Group, is what it’s all about. Homeowners are making lenders jump through procedural hoops at a time when lenders have fewer resources to deal with more paperwork. Assembling the paperwork and providing documents to a judges satisfaction takes time but does little to change the eventual outcome – foreclosure. But if homeowners can buy a little time sometimes that’s victory enough.

Why am I posting this now? Because we are seeing seminars on this, or similar, procedures cropping up in the marketplace. I recently posted on the high-profile squatter scam in Sacramento – it’s definitly another wave of potential fraud against the unwary.

I’m not here to validate the legitimacy of either the program or the practitioners – but if you are approached by someone touting this type of program, even if she’s a Congress(wo)man, always follow Kaptur’s advice and check with the Riverside County legal aid society, the California Bar Association or call 888-995-4673 for assistance. Even Congress(wo)men have been known to get it wrong from time to time.

Oh, and if you’re contemplating advising people to squat – you might want to read this ActiveRain feature article first: Fixin to Get Cooked In The Squat.

Last modified: November 13, 2019 at 4:46 pm | Originally published: March 12, 2009 at 11:59 am
Printed: September 27, 2020