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  1. #1
    Senior Member redpony353's Avatar
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    New foreclosure defense: Prove I owe you

    http://www.msnbc.msn.com/id/29242063/?gt1-42003


    New foreclosure defense: Prove I owe you
    Homeowners demand lenders produce original documents — some can’t



    updated 12:59 p.m. PT, Tues., Feb. 17, 2009

    ZEPHYRHILLS, Fla. - Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork.

    And just like that, the foreclosure proceedings came to a standstill.
    Lovelace and other homeowners around the country are managing to stave off foreclosure by employing a strategy that goes to the heart of the whole nationwide mess.

    "I'm going to hang on for dear life until they can prove to me it belongs to them," says Kathy Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I'll try everything I can because it's all I have left."
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    During the real estate frenzy of the past decade, mortgages were sold and resold, bundled into securities and peddled to investors. In many cases, the original note signed by the homeowner was lost, stored away in a distant warehouse or destroyed.

    Persuading a judge to compel production of hard-to-find or nonexistent documents can, at the very least, delay foreclosure, buying the homeowner some time and turning up the pressure on the lender to renegotiate the mortgage.

    "I'm going to hang on for dear life until they can prove to me it belongs to them," said Lovelace, a 50-year-old divorced mother who owns a $200,000 home in Zephyrhills, near Tampa. "I'll try everything I can because it's all I have left."

    In interviews with The Associated Press, lawyers, homeowners and advocates outlined the produce-the-note strategy. Exactly how many homeowners have employed it is unknown. Nor is it clear how successful it has been; some judges are more sympathetic than others.

    More than 2.3 million homeowners faced foreclosure proceedings last year and millions more are in danger of losing their homes. On Wednesday, President Obama will unveil a plan to spend at least $50 billion to help homeowners fend off foreclosure.

    Chris Hoyer, a Tampa lawyer whose Consumer Warning Network Web site offers the free court documents Lovelace used to file her request, has played a major role in promoting the produce-the-note strategy.

    "We knew early on that the only relief that would ever come to people would be to the people who were in their houses," Hoyer said. "Nobody was going to fashion any relief for people who have already lost their houses. So your only hope was to hang on any way you could."
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  2. #2
    Senior Member LawEnforcer's Avatar
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    Very smart tactic.

  3. #3
    Senior Member azwreath's Avatar
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    Quote Originally Posted by LawEnforcer
    Very smart tactic.




    It is, but I'm torn on how I feel about it.

    I can understand it in a situation where someone has acted responsibly in obtaining a loan and then run into a legitimate problem they had no control over such as a layoff or health issue which caused them to fall behind and facing a lender who just didn't care and wouldn't work with them.

    BUT:

    Does the person who purposely put themselves in a position of taking on a loan they knew they couldn't afford, really have any right to utilize this tactic in effort to retain possession of a home they never should have purchased in the first place?

    Or, should the person who took on loans they shouldn't have just to purchase investment properties be allowed to get away with this?
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