Lenders inability to produce original loan documents.
Posted by Foreclosure Prevention in Real EstateArticle written by 911-Foreclosure.com
“What if Your Lender CAN’T Produce the Note?” is an article written by Terry Smiljanich and published on the Consumer Warning Network in March 2009. It makes compelling reading and contains vital information for all homeowners who may be facing foreclosure by their lending institution.
The article gives the homeowner a great opportunity to buy more time when faced with foreclosure by their financial association. and many homeowners facing foreclosure are using the principles contained in it as part of their defence in Court. This is not a legal loop-hole or technicality, but a serious and important issue that needs to be properly understood by all homeowners and lenders as well as the Courts.
Before a house can be put into foreclosure, the home owner can require that the lender provide proof that they have legal rights over the property. The lender, or person to whom the money is owed, proves this by producing the original note containing the signature of the person who they claim owes them money. The note cannot be a copy of any kind, not even an electronic entry.
Before a Lender can proceed with the foreclosure process, “the homeowner has the right to force the lender to present the original promissory note in the courts”, affirms Smiljanich But what happens if the lender claims that they have “lost” the original copy of the note?
In the “Uniform Commercial Code” “, a specific provision was created to handle with the subject. It states that certain conditions must be met before a promissory note can be enforced without the original being produced. It is up to the lender to legally prove all 4 conditions.
The Court will determine whether or not the lender has proven their right to foreclose. The Court needs to be thorough in its investigation to whether the lender had the note in his possession when it was lost or destroyed. The Courts need to understand that this matter is not a mere technicality and enforce the “full proof”, because it is the homeowner or borrower who stands to lose if the incorrect person is allowed to foreclose on the property.
As Smiljanich explains, “even if a Court has found that the original note is lost and the foreclosure sale is finalized, if someone later turns up with the original note and proves that it is the proper holder of the note……. The original borrower is STILL LIABLE.”
This article comes at an inportant time and homeowners faced with foreclosure need to be aware of the requirements of the law so that they can properly protect themselves and their property.
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