Introduction:

If someone owed you a million dollars would you have a copy of the agreement, and would you safeguard that agreement?  Of course.  But what we are witnessing in our State and Federal Courts in California, Arizona and across the nation, is lenders who cannot legally prove they have the right to enforce your mortgage.  Why?  They don’t have the original promissory note.  The reason for this is complicated and we will talk about the secondary loan market in other posts on UltimateBK.com.  Suffice it to say that if you walked into a small claims court and demanded payment on a written contract, the judge would want to see a copy of the written contract.  However, when it comes to securitized loans (especially in private non-judicial foreclosure settings) apparently you don’t have a right to ask if the real lender is foreclosing on you.  If Wallmart sends you a Notice of Default and Notice of Sale for example, you are supposed to take their word for it that they can foreclose on you, and basically go quietly and gently into the foreclosure night.  You have no right after all, being a delinquent borrower and asking such questions.

Some might say you are simply “trying to get your house for free.”  But let me ask you this, if a “lender” is seeking to foreclose, or assert rights in a bankruptcy court, and if they cannot produce LEGAL EVIDENCE THAT THEY ARE THE OWNER OF THE LOAN (whether by purpose or by mistake), who is the one actually trying to get a house for free?  This is the question we are asking and trying to get an honest answer to.  The California Commercial Code and Arizona commercial code (the two states where we are licensed to practice law) both set forth specific rules for the enforceability of commercial notes.  Why is it asking too much that an alleged creditor be able to prove its legal status to collect on your loan?