In an attempt to save, or at least stall the foreclosure process on, their home some people are using a “Produce the Note” strategy.  Featured on MSNBC this week, the goal of this strategy is to assure that the financial institution suing the homeowner actually owns the note and has the right to proceed legally.

When mortgages were bought and sold behind the scenes and on Wall Street during the housing boom, many of the new lending companies did not receive the proper paperwork to show they actually own the notes on the homes.  According to the Consumer Warning Network, this is the key element of this strategy.  If the lenders can’t produce the paperwork showing the right to foreclose on a home, some cases are being stopped or dropped during the legal process.

The primary goal of this strategy is to give homeowners the chance to delay the foreclosure and put pressure on the lender to negotiate so that they can keep their home.  And in some cases, it seems to be working.

It makes sense to confirm the actual owner of any debt, even your mortgage.  Just as you should for a collection agency sending a bill for $50 worth of medical expenses, using your consumer rights to ask for proof of their right to collect protects you now and in the future.   There have been cases where a homeowner lost their house to foreclosure and then received a foreclosure notice from another lending company a few months later on the same house that the person no longer had.  This can have a severe and long-lasting effect on credit scores if it shows up as TWO foreclosures and one of them has a delinquent balance.

NOTE: This information is not legal advice and should not be construed as such.  However, these are not typical times.  Exploring all options to protect your financial future makes sense.  We’d love to hear from you if you’ve tried this or decide to do it.