Standing up to the banks: how to challenge your foreclosure

In response to an article I posted recently called “Standing Up to the Banks,”, a number of people have written to ask for help in defending their foreclosure actions.  I started to put together materials, when I discovered that it had already been done.  The Consumer Warning Network is an excellent website providing specific directions on how to raise the produce-the-note defense —

It states: 

Using the “produce the note” strategy is something all homeowners facing foreclosure can do. If you believe you’ve been treated unfairly, fight back. We have created templates for a legal request, a letter to your lender and a motion to compel to help you through the process.


Your goal is to make certain the institution suing you is, in fact, the owner of the note (see steps to follow below). There is only one original note for your mortgage that has your signature on it. This is the document that proves you owe the debt.

During the lending boom, most mortgages were flipped and sold to another lender or servicer or sliced up and sold to investors as securitized packages on Wall Street. In the rush to turn these over as fast as possible to make the most money, many of the new lenders did not get the proper paperwork to show they own the note and mortgage. This is the key to the produce the note strategy. Now, many lenders are moving to foreclose on homeowners, resulting in part from problems they created, and don’t have the proper paperwork to prove they have a right to foreclose.


If you don’t challenge your lender, the court will simply allow the foreclosure to proceed. It’s important to hold lenders accountable for their carelessness. This is the biggest asset in your life. It’s just a piece of paper to them, and one they likely either lost or destroyed.

When you get a copy of the foreclosure suit, many lenders now automatically include a count to re-establish the note. It often reads like this: “…the Mortgage note has either been lost or destroyed and the Plaintiff is unable to state the manner in which this occurred.” In other words, they are admitting they don’t have the note that proves they have a right to foreclose.

If the lender is allowed to proceed without that proof, there is a possibility another institution, which may have bought your note along the way, will also try to collect the same debt from you again.

A Tennessee borrower recently had precisely that happen to her. Her lender, Ameriquest, foreclosed on her in July of 2007. About three months later, another bank sent her a default notice for the mortgage on the house she just lost. She called to find out what was going on. After being transferred from place to place and left on hold for lengthy periods of time, no one could explain what happened. They said they would get back to her, but never did. Now, she faces the risk of having her credit continually damaged for a debt she no longer owes.


This process is not intended to help you get your house for free. The primary goal is to delay the foreclosure and put pressure on the lender to negotiate. Despite all the hype about lenders wanting to help homeowners avoid foreclosure, most borrowers know that’s not the reality.

Too many homeowners have experienced lender resistance to their efforts to work out a payment structure to keep them in their homes. Many lenders bear responsibility for these defaults, because they put borrowers into unfair loans using deceptive, hard-sell practices and then made the problem worse with predatory servicing.

Most homeowners just want these lenders to give them reasonable terms on their mortgages, many of which were predatory to begin with. With the help of judges who see through these predatory practices, lenders will feel the pressure to work with borrowers to keep them in their homes. Don’t forget lenders made incredible amounts of money by using irresponsible practices to issue and service these loans. That greed led to the foreclosure crisis we’re in today. Allowing lenders to continue foreclosing on home after home, destroying our neighborhoods and our economy hurts us all. So, make it hard for your lender to take your home. Make ‘em produce the note!


A. If your lender has already filed suit to foreclose on your home:

  1. Use the first form. It’s a fill-in-the-blank legal request to your lender asking that the original note be produced, before it can proceed with the foreclosure. In some jurisdictions, the courts require the original request to be filed with the clerk of court and a copy of the request to be sent to the attorney representing the lender. To find out the rules where you live, call the Clerk of Court in your jurisdiction.
  2. If the lender’s attorney does not respond within 30 days, file a motion to compel with the court and request that the court set a hearing on your motion. That, in effect, asks the judge to order the lender to produce the documents.
  3. The judge will issue a ruling at your hearing. Many judges around the country are becoming more sympathetic to homeowners, because of the prevalence of predatory lending and servicing. In the past, many lenders have relied upon using lost note affidavits, but in many cases, that’s no longer enough to satisfy the judge. They are holding the lender to the letter of the law, requiring them to produce evidence that they are the true owners of the note. For example:
  • In October 2007, Ohio Federal Court Judge Christopher Boyko dismissed 14 foreclosure cases brought by investors, ruling they failed to prove they owned the properties they were trying to seize.

B. If you are in default, but your lender has not yet filed suit against you:

  1. Use the second form. It’s a fill-in-the-blank letter to your lender which also requests they produce the original note, before taking foreclosure action against you.
  2. If the lender does not respond and files suit against you to foreclose, follow the steps above.
UPDATE: CNN features The Consumer Warning Network and the “Produce The Note” strategy. Borrowers are putting this plan into action and getting results!

Consumer Warning Network Featured on CNN

THE LATEST: Borrower wins more time to fight foreclosure! At a court hearing Tuesday, a Pinellas County, Florida Judge denied Wachovia the right to proceed with its foreclosure against borrower Jacqueline O’Brien (profiled in the CNN story).  Instead, O’Brien was granted a continuance, as she pursues the produce the note strategy.  Wachovia expressed interest in renegotiating the terms of the loan, rather than continuing the court battle. 
Chris Hoyer adds in an email:
When people ask for individual lawyers we either refer them to their local bar referral system or, when they can’t afford a lawyer (most often), we give them this link :
which allows them to find free legal advice in their area.  We have had lots of people show success recently from the feedback we have gotten.

58 Responses

  1. […] friend forwarded me this intriguing post from Ellen Brown’s Web of Debt blog. I mentioned in February how some homeowners were […]

  2. This is a great resource! Great steps to follow. Thank you . I found it really helpful. I have been everywhere informing myself on the entire process and this is great. Another great tool is “Defeat Foreclosure” by William Dorich and Merle Horwitz. (website, if interested, )

    The authors are a Real Estate expert and trial lawyer, so it is very helpful and actually really easy to read. I just wanted to share this tool because I think there is so much information out there and we need to be educated to save our houses and credit.

    Thank you again!

  3. Even though we are told of instances of foreclosure in terms of statistics, to so many, it’s a story of a family member or friend that they know.

    I’m not sure who to blame – the owner who could’ve taken different actions to avoid foreclosure or the banks and government who do such a poor job of keeping homeowners informed with all their small-print info.

    It’s a spiral where everyone is chasing and blaming someone else. But one thing that we all can agree on in difficult times like this is that it’s a downward spiral that is collectively drowning us as a whole nation that once was prosperous and less wounded.

  4. I agree, the larger question than who is at fault is what do we do about it. I think we have to have some massive court action, just to get Congress to listen.

  5. Ellen:

    Here’s the problem with negotiation with the “lender” which is ordinarily nothing more than a payment processor. You will still never know if the lender/payment processor actually has the right to negotiate with you if it does not hold the note and/or if it can not produce evidence of the right to collect on behalf of the note holder.

    My case is beginning to look like the lender/payment procesor will never be even able to come forth with proof that it has the right to demand payments of me.

    And of course, when the note has “been lost,” if it later turns up and is sold, then you owe the new noteholder, not the lender/payment processor you negotiated with.

    The only safe way to do this is to let the people stay in their homes, remove the cloud on their title, return their money, and if a noteholder ever shows up and demands payment, negotiate or litigate with the new noteholder.

    But I don’t think negotiation with a lender/payment processor, which can not prove it has the right to demand payment on behalf of a noteholder, makes any sense.

  6. Typo. Should have said “if it can produce evidence” in the third line of my previous post.

  7. Great site, and thanks for personally responding in my journal.

    Years ago, I practiced my typing skills at a law firm specializing in foreclosure. Business was brisk. I was continually amazed at the number of lost notes. . . until I actually had to call some of these firms for business. Some of them were the most incompetent “organizations” with which I have ever had the displeasure of dealing.

    And that was 20 years ago.

    After that experience, nothing in this present day surprises me.

  8. Hi Peristaltor, I practiced my typing skills at a law firm too! I was a legal secretary, and fronted for my boss with his feet on the desk dictating bad prose. I thought “I could do that” and went to law school. Needless to say, it wasn’t as easy as it looked.

  9. I have a good one for all of you. My client was loosing her home (single Mum with two kids), limited funds to deal with Country Wide (CW) (my company did not do the loan). CW tells her that she has to be 3 payment down before they will deal with her, that is, go into mortgage modification. She gets there and the benevolent CW plays hard ball with her via the mortgage modification. CW says “all we can do is add the amount defaulted on to the loan and continue with the payments (I have this on recording). Needless to say this plan wont work. By the time I got into it with CW at the request of this Mum, CW said this to me (about this woman) and I quote, “We dont have to do that”. What I asked of them is that in lieu of putting the woman out on the street, why not let her stay in the property given the fact CW did the loan to start with. I asked again and got, I quote, “Sir, we dont have to do that”. Can you believe the arrogance of this companies, not to mention the idiots that run F Mae and F Mac. Bill R

  10. Ellen: In Washington State, persons needing assistance should look at – that will get them to NW Justice and their resources. The local Bar’s Lawyer Referral service only connects to attorneys who pay for referrals.

    I defended a collection case where the plaintiff could not produce any evidence of the debt and STILL prevailed. (Not my favorite case, obviously). My take? Local cronyism.

    Re-writing mortgages to fixed rates on a case by case basis and scrutinizing distressed property transfers would reduce the abuses of the system.

    Elizabeth Powell

  11. does anyone have a link or info about hte lady in tennessee that was forclosed on the first time by someone that did not own the note, then sued for flroclsure a second time by the real note holder?

  12. There is a case like that mentioned on the Consumer Warning Network (

  13. Is producing the note for your mortgage applicable in the UK. And does a bridging loan come in to the same play as a mortgage?

    I would so appreciate an early reply as I have a court hearing on the 18th November 08.

    Thank you.


  14. Dear Ellen,
    I have been reading everything u write and emailing the links to everyone I know. I have just initiated the ‘produce the note’ tactic with my lender.I am current with my payments but I am approaching the point where I can’t afford it. My question is……. how do I calculate if its worth staying in my home or just walking away? My husband and I are having terrible fights about this.
    Your thoughts would be greatly appreciated,

  15. Hi Marth, unfortunately that’s not my area of expertise. I’m an attorney and writer but don’t have any practical experience in the real estate business. I did forward your question to 2 people who might know though. Good luck, Ellen

  16. It will be interesting to see if the bankruptcy law that is being considered in Congress will pass.
    It seeks to allow a bankruptcy judge modify a mortgage contract.
    It will have a huge impact on many loans, and could push more people into Chapter 13 bankruptcy.
    Also, it is being said that Obama may sign a moratorium on foreclosures for 90 days. This will be interesting as well.

  17. The produce the note strategy can be used for credit card debt , line of credit, medical bills and repos for negotiations and settlement as well. I like what is being discussed in this blog it is very helpful and in line with our debt settlment companies objectives.

  18. Look up “credit river decision” where a judge ruled federal reserve notes where not legal money and therefore the plaintiff didn’t get anything of “consideration” in the loan and didn’t owe the bank any mortgage payments. He kept his property. If everyone challenged the banks when in forclosure citing this case they could keep there property.

  19. This seems to be a great remedy for a lot of sub-prime victims.
    Saw this question posed on another site and it kinda makes sense:
    If a lender funds a loan with a “warehousing line of credit” from a commercial bank-and-all that bank does is type in some numbers, basically creating that money out of thin air- and- if that money is not really BACKED my anything, then- how is there any REAL negotiable instrument?
    As I understand it- the Promissory Note becomes the instrument but how can you promise to pay something back that DOES NOT EXIST?
    My head is spinning!!

  20. Ellen,

    What about a rash of Jerome Daly defenses?

    Maybe the banks would actually have to appeal this time.

  21. Just read somewhere that the Daly case has no validity in case law because it was a “Justice of the Peace” and not a Judge. (?)
    can anyone expand on that?

    • It’s valid, just not precedent for cases in other judiciary systems. The justice of the peace system was big in the 19th century, when there were traveling judges who went to remote towns and held court. They were more independent and free-thinking than the big-city system. But the usefulness of the justice of the peace system has been pretty much whittled down to marriage licenses and such now.

  22. michelle, on March 4th, 2009 at 5:59 am Said:

    Just read somewhere that the Daly case has no validity in case law because it was a “Justice of the Peace” and not a Judge. (?) can anyone expand on that?

    It is because the Justice Court is not a “court of record.” Transcripts are not taken and evidence is not recorded. The Justice of the Peace may be but is not required to be a lawyer. So trials in Justice Court are not found in law books and are not referred to in precedent.

    The Credit River decision was overturned on appeal in a “Trial de Novo” which means that an entirely new trial was held. Appeals from Justice Court are handled in “trials de novo.” Trials de novo are held in courts that are courts of record and may result in precedent.

    Daly, the litigant, was a lawyer who was eventually disbarred over this matter.


  23. Thank you for clearing that up. So does that mean that a defendant could not use that same argument in their defense?

  24. and… Daly was disbarred but what happened with his house?

  25. “Thank you for clearing that up. So does that mean that a defendant could not use that same argument in their defense?”

    Not successfully.

    “and… Daly was disbarred but what happened with his house?”

    The foreclosure was eventually sustained. In most tellings of the story the foreclosure involved a home. But I have been unable to determine if the property was anything more than a vacant lot.


  26. Dear Brock-
    would you be so kind as to post a link to that info and case- I would greatly appreciate it.
    Also- would that argument work today?

    • Michelle; I do not know if Brock posts a link to Jerome Daly farther down in this blog, but here it is anyway;

      As you can see that is the law library containing “ALL” the records on the Daly case. You can “right click” and download every file by clicking on “save target as”. I have all the Daly case files I can find and am planning on putting them into a zip file to send to those who want it.

  27. oops- saw that you already answered that.
    why do you think it would not be successful?

  28. Dear Brock-
    would you be so kind as to post a link to that info and case- I would greatly appreciate it.
    Also- would that argument work today?

    oops- saw that you already answered that.
    why do you think it would not be successful?

    For the very same reason the argument didn’t work in the Daly case. I posted some extended excerpts from the Minnesota State Law Library web site to this thread on February 28. That posting in the archive immediately precedes your first posting yesterday morning.

    “The landowner’s [meaning Daly’s] defense had been that the bank had not lent him any actual money, but had simply created credit on its books, and therefore, since nothing of value had been advanced by the bank, it was not entitled to the property that had been given as security for the loan.”

    This is simply a crank argument that has no basis in reality.


  29. Dear Brock-
    So please help me understand all of this a little better.

    As I understand it in order for a contract to be legal 3 elements must exist:
    1) Offer
    2) Acceptance
    3) Consideration

    What was the “something of value” or “Consideration” the bank exchanged for Mr. Daly’s Promissory Note?

    It seems to me that every time the bank(s) sell a Promissory Note (a negotiable instrument that has value) they are committing fraud because there is no real consideration.

    Also – I am having trouble finding your 2/28 blog excerpt. Does the Minnesota State Law Library have record of the overturned on appeal case?

  30. how would that work if a class action was filed

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