Facing Foreclosure: The Homeowner’s “Produce the Note” Defense

UPDATED: Jul 13, 2023Fact Checked

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Jeffrey Johnson

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Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

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Mary Martin

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UPDATED: Jul 13, 2023

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UPDATED: Jul 13, 2023Fact Checked

The “Produce the Note” defense is used by the homeowner to demand that the foreclosing party prove a legal right to the mortgage payments under the promissory note attached to the mortgage. This strategy to show ownership of the debt by producing the note can buy time for the homeowner. It works better in jurisdicitions requiring judicial rather than non-judicial foreclosure.

Type of Foreclosure Used in Homeowner’s State

In a judicial foreclosure, a lawsuit is filed by the foreclosing party. The homeowner can easily present the “Produce the Note” defense as a response. If the homeowner does not challenge ownership of the debt in the legal action by way of a defense to the foreclosure, the court will not bring it up, and it is lost forever. In a non-judicial foreclosure state, the lender does not file a legal action. It is up to the homeowner to initiate a costly lawsuit, with all the fees associated with it, to prevent the foreclosure from continuing. This is a more demanding process for the homeowner in the fight to keep his/her house.

Demanding the Foreclosing Party Produce the Note

This defense is a plausible argument for the homeowner because of the way the secondary mortgage market works. Mortgages are often passed around, so the loan can be sold multiple times during home ownership. The mortgage documents are kept by a custodian or sent along later. Promissory notes can be lost or misplaced. In most cases the lenders can fix whatever mistakes they have made and produce the note, but demanding the note can buy the homeowner some time.

Giving the Homeowner Extra Time

While all of this is true, it is not safe to assume that sending a letter asking for the note will stop any foreclosure. But, it will give the homeowner extra time in his/her home. You should talk to a lawyer who specializes in foreclosure to explore this defense along with other claims to stop a foreclosure.

Leveraging Insurance in the “Produce the Note” Defense: Case Studies on Foreclosure

Case Study 1: Title Insurance and Ownership Disputes

Jennifer is a homeowner facing foreclosure due to a dispute over the ownership of her mortgage. The foreclosing party claims to have the right to foreclose, but Jennifer believes there are irregularities in the chain of ownership. She had purchased title insurance when she initially bought her home. Jennifer contacts her title insurance company and provides them with the details of the dispute.

The title insurance company investigates the issue and finds that there is indeed a cloud on the title. They initiate legal action on Jennifer’s behalf to defend her ownership rights. Thanks to her title insurance, Jennifer is able to assert the “Produce the Note” defense and protect her home from foreclosure.

Case Study 2: Homeowner’s Insurance and Property Damage

Mark is a homeowner facing foreclosure after a natural disaster severely damages his property. He had maintained a comprehensive homeowner’s insurance policy that covers property damage. When the foreclosure proceedings begin, Mark uses the “Produce the Note” defense to challenge the foreclosing party’s right to foreclose.

In the meantime, he files an insurance claim for the damages caused by the natural disaster. His homeowner’s insurance company assesses the damage, and Mark receives a substantial payout to repair and rebuild his property. This financial support from his insurance allows Mark to negotiate with the foreclosing party and potentially find a solution to save his home.

Case Study 3: Mortgage Insurance and Financial Hardship

Rachel is a homeowner facing foreclosure due to financial hardship. She had taken out a mortgage insurance policy when she purchased her home. As she prepares her defense using the “Produce the Note” strategy, Rachel also contacts her mortgage insurance provider to explore options. The mortgage insurance policy she holds includes provisions for financial hardship and potential foreclosure.

Rachel provides the necessary documentation to demonstrate her financial difficulties, and her mortgage insurance company agrees to provide temporary financial assistance to help her avoid foreclosure. This assistance gives Rachel the time and resources she needs to stabilize her financial situation and potentially find alternatives to foreclosure.

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Jeffrey Johnson

Insurance Lawyer

Jeffrey Johnson is a legal writer with a focus on personal injury. He has worked on personal injury and sovereign immunity litigation in addition to experience in family, estate, and criminal law. He earned a J.D. from the University of Baltimore and has worked in legal offices and non-profits in Maryland, Texas, and North Carolina. He has also earned an MFA in screenwriting from Chapman Univer...

Insurance Lawyer

Mary Martin

Published Legal Expert

Mary Martin has been a legal writer and editor for over 20 years, responsible for ensuring that content is straightforward, correct, and helpful for the consumer. In addition, she worked on writing monthly newsletter columns for media, lawyers, and consumers. Ms. Martin also has experience with internal staff and HR operations. Mary was employed for almost 30 years by the nationwide legal publi...

Published Legal Expert

Editorial Guidelines: We are a free online resource for anyone interested in learning more about legal topics and insurance. Our goal is to be an objective, third-party resource for everything legal and insurance related. We update our site regularly, and all content is reviewed by experts.

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