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There is one thing that the law requires in almost any real estate action, at least in those states or in bankruptcy court, where there is a judicial action concerning foreclosure.  That is the requirement to produce the actual real estate note, or at least a reasonable copy of it.

One would think that a lender, wishing to litigate on its note, or wishing to foreclose, would not have that much difficulty producing the darn thing.  But, that appears to be wrong.

According to an article in HuffPo, and other media outlets, a small homeowner rebellion called "show me the note" or "produce the note" is taking off with some degree of success.

The truth of the matter, in this  computer day and age, as these mortgages have been sliced up and transferred with great regularity, it just seems impossible for many creditors to produce the original mortgage note, as they must do if challenged.  This has provided an opportunity for lawyers to get foreclosures stopped and get modifications negotiated.

As quoted in the article, "You wouldn't imagine that the lenders would be that slovenly that they would not be able to produce adequate documentation of the debt," said House Financial Services Committee member Rep. Brad Miller (D-N.C.). "But apparently a lot of times they really have been unable to."

When involving North Carolina's legal assistance to homeowners facing foreclosure, roughly one of every three mortgages has been found to have some substantial legal discrepancy.

During the securitization boom, millions of mortgages were sold and packaged into bonds -- often many times over, metastasizing into esoteric financial instruments -- for sale to investors. Each time, the paperwork should have been changing hands and the homeowner should have been notified that someone new held the note. But just as deciphering the true holder of the mortgage has become more and more difficult for homeowners -- Is it the servicer? Investor? Trustee? Original lender? -- the paperwork has also become difficult to track.

This also comes on top of the trend with the legal aid attorney in Florida, requiring proof as to actually owned the debt.  Now they are filing quiet title actions attempting to get title to the client's home.

In dismissing 14 foreclosure cases in 2007 based on a lack of proper documentation, a federal judge in Ohio admonished the lenders, stating their argument that "'Judge, you just don't understand how things work'...reveals a condescending mindset and quasi-monopolistic system where financial institutions have traditionally controlled, and still control, the foreclosure process."

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