Get Out Of Your Mortgage
Get out of your Mortgage!
Lost Promissory Note
Here is one HUGE tip for all you homeowners out there and especially *former* homeowners who have lost a home in this bad market.
If your mortgage is ever sold to another bank/entity, make the new note holder SHOW YOU THE ORIGINAL NOTES WITH YOUR SIGNATURE! If they can't you can probably get out of the promissory note portion. Seriously!
Truly? How often?
This happens more often than you would think. But DO consult a lawyer on this first. And DON'T get too hopeful. I would guesstimate it happens on 1 in 500 or 1 in 1000 loans. But that is a darn sight better than 1 in a million. And with all the backlog, paper shuffling, and mergers and failures of banks in the last 3 years, it is probably a lot higher now. You can't imagine how much physical paper has been boxed up and shipped around as loans have been sold, consolidated, bundled, re-sold, and sometimes, just plain lost or thrown out.
Show me the note!
Just because they have you in the computer doesn't mean they can enforce a loan in court, and just because they can't find the note, doesn't mean they can't try to sell it to someone who will try to enforce it. A lot of stuff falls through the cracks.
They may still have a lien (recorded at the county against real property), but they typically can't come after you on remainders from foreclosure or short sales or interest or past payments above the lien amount.
And that could be worth THOUSANDS AND TENS OF THOUSANDS of dollars to you maybe HUNDREDS OF THOUSANDS!
I've seen it happen!
I worked at a place where I saw notes get lost. It really really happens. The big banks lose original notes all the time. Especially on second mortgages or home equity loans. They sell them anyway especially on non-payment cases and issue a 'certificate' or paper that says 'We lost the note, but really, we gave this guy money for his house'. Kinda worthless in court.
In many cases a note holder (the second bank or note holder who typically buys the note from a bigger bank for a fraction of the cost) tries to pursue the remaining balance on these notes sometimes after the house has been sold, been turned in for deed-in-lieu (DIL) or foreclosed! It is amazing how often this actually happens.
I have also seen many cases in the paper and on the news where a judge has ruled if the note holder doesn't have the original note, or original agreement with signatures, it is an invalid claim and throws it out! I know where I worked, that was a major concern to not let the homeowner know if the note was lost because it basically meant they could cause a real fuss and probably get out of their agreement if no agreement was to be found!
The reality of business and goodwill in America
One thing I learned at this place I worked, it is all business and the letter of the law rules, not the spirit. If you can legally get out of paying your note, you should. And a judge will typically back you up on that for the bank or note holder being stupid. On the flip side, if a company can legally come after you, regardless of circumstances, they will. So mind your obligations. These people are not lending you money to be nice. It was proved to me over and over if I didn't have it on paper, it was meaningless.
Disclaimer
These are my opinions and these are things I have actually seen. However, I am not a lawyer, though I pretend to be one in real life on occasion (pro se, not in any kind of impersonating a lawyer kind-of-way). I recommend you do your own research on your case. You can always ask for a copy of your original note and then go from there. If a note holder can't produce it, DO consult with a lawyer.
CachedSince:{ts '2024-04-20 10:58:01'}
