Written by: Attorney, Matthew Toll at Lusk, Drasites, Tolisano & Smith P.A.

99.999% of the time, the answer is no. There was a story that was shown on a number of news stations (and is all over the internet) telling people how to "beat" the mortgage company. The defense being presented is to force the mortgagee to "produce the note" and the story implies that if somehow the promissory note that was signed at closing cannot be found, the customer who borrowed the money from the bank is "off the hook".

This is very misleading. If you borrowed money to buy a house and put up the house as collateral for the loan, you will lose the house if you don't pay back the loan. That's the law, and it is remarkably simple. People sometimes seem to lack common sense. NOTHING is free in this world, and certainly not a house.

If the original note cannot be found, the Court can still enforce a "lost note". All that a mortgagee needs to do is file a "lost note affidavit" and add a count to the lawsuit to re establish a lost note.

It is true that there was an explosion the number of mortgage backed securities being offered by investment bankers between 2002 and 2007. Basically, instead of holding onto mortgages, banks re sold them so they could loan out more money and make more fees by processing more loans.

The mortgages were "packaged together" and then sold to investors. These "mortgage backed securities" were marketed as an extremely safe investments, because up until that time, default on residential home loans was very rare. Besides, even if one or two of the borrowers defaulted, the logic was the mortgage back security was made up of hundreds or even thousands of loans so the return on investment would barely be affected.

To make matters worse, some banks would "slice off" a segment of a number of different mortgage backed securities (each "slice" was known as a "tranche") and create a new mortgage backed security called a "collateralized debt obligation" ("CDO"). These CDO's were put into a trust, and a trustee, usually a bank, would be put in charge. The trustee would be responsible to foreclosing against delinquent borrowers and marketing the trust to investors. Trustees such as the Bank of New York and Deutche Bank are very common.

Unfortunately, more than "1 or 2" of the borrowers defaulted and these securities became anything but safe. As a result of the transfer of the mortgage from the original lender to the creator of the mortgage backed security and then to trustee of the CDO, it is often hard for the trustee to prove that it owns the mortgage in question.

The "produce the note" defense is exploited by this office by forcing the mortgagee to prove that it has "standing" to file the suit. In other words, we force the mortgagee to prove that it actually owns the mortgage in question.


However, we typically fo not file a "request for production" demanding that the opposing attorney physically "produce the note". All that filing a request for production usually will accomplish is to increase attorneys fees and encourage the filing of a lost note affidavit by the opposing attorney sooner.

If you hire a law firm to represent your interests and you have information that you believe would benefit your lawyer, you should always communicate with your lawyer. We may be the ones representing the clients, but the clients are the ones personally experiencing the trauma of litigation. However, we do ask that you defer to the discretion of your counsel on matters of litigation strategy. We will always explain why a particular path has been chosen for our clients.