New Battle Cry in the Foreclosure Wars: 'Show Me the Note!'
A new battle cry has begun to spread among homeowners fighting to keep their homes out of foreclosure: “Show Me the Note!”
CBS San Francisco reports that a key foreclosure document -- the promissory note that borrowers sign in which they promise to pay the mortgage to the lender -- is increasingly difficult for lenders to produce. Consumerist adds that if the lender can't quickly produce the note, homeowners may be able to buy some more time in the process.
While notes can remain at the bank that issued the mortgage, notes are also commonly traded or sold to other institutions. CBS reports that about 10 years ago, Wall Street created an electronic system for tracking and registering such trades called MERS – the “Mortgage Electronic Registration System.” However, because the transactions are all electronic, MERS never gets the original promissory note.
Attorneys for foreclosed upon homeowners argue that foreclosures that proceed without production of the actual promissory note are illegal. “It’s an industry-wide fraudulent scheme,” said one such lawyer. The parties that are foreclosing have no authority to foreclose and take the property away from these borrowers and homeowners.” Lawsuits have now been filed against MERS and hundreds of banks alleging illegal foreclosures due to the lack of the notes.
MERS told CBS that its system is not fraudulent, and the company expects to "settle these foreclosure battles in its favor."
Posted by Bruce Carton on November 19, 2010 at 01:42 PM | Permalink
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