Foreclosure Rescue Scams:  How to tell a Helping Hand from a Hand Grenade.

The filing of a foreclosure action or notice of lis pendis is a matter of public record.  As such if the bank files a lawsuit against you to take back your home a large number of people are going to know about it.  Many of these people are con artists who prey upon unsophisticated consumers in a time when the homeowner is stressed out and vulnerable.  In times of old the most common scam was an attempt to steal the homeowner’s equity.  The foreclosure rescue consultant / con artist usually would trick the homeowner into quit claiming the deed to the consultant, a third-party straw buyer, or a shell corporation which would pay off the mortgage and pay little if anything to the seller at the closing.  This rescue consultant would justify this action by telling the homeowner ‘we need to get the house out of your name.’  The new owner of the home would then lease it back to the former homeowner.  Many times the homeowner would not even realize that all of the legal papers he or she was signing were transferring ownership of the home.  The new owner would then refinance the property or take a second mortgage to pocket the difference between the amount paid by the “rescuer” and the value of the home.  At this point the “rescuer / con artist” would stop making payments on the new mortgage(s) while continuing to collect rent from the prior owner.  The former owner realizes he has been duped when he is served with a foreclosure action as a tenant in his own home.  By this time the amount of the mortgages that encumber the property may be double the amount the original owner owned on the property. 

 

Florida has passed a NEW foreclosure rescue scam prevention law which I have reproduced at the end of this post. This statute PROHIBITS foreclosure consultants from charging any fee prior to the completion of foreclosure consulting services.  Attorneys are exempt from this statute.  This means that if a homeowner engages the services of a loan modification company or other foreclosure consultant the homeowner should not pay any fee until the service is completed. 

 

We have had clients come to us who hurt badly when they failed to show around for a home mortgage and were put in high interest subprime loans when their credit rating would have qualified them for a 30 year fixed prime loan at a much lower interest rate.  These same clients upon being served with foreclosure paid $1,500 to $2,500 to non-lawyers to assist them with their foreclosure case.  The non-lawyer often did absolutely nothing or wrote only a single letter to the lender or lender’s attorney.  In one case the consultant hand wrote a “pro se” (self-represented) answer for the client to sign.  One of the companies offering these foreclosure services was run by a disbarred lawyer.  Hiring a non-lawyer to represent you in a Court proceeding, when the non-lawyer cannot appear in Court, is about as smart as hiring a car mechanic to perform heart surgery.  What is truly said is that for the price some of our clients paid non-lawyers they could have obtained competent representation from one of several law firms.  The non-lawyers “services” was no help but rather a hand grenade.  Thankfully we were retained early enough to repair the damage.  This far the disbarred lawyer has refused to return our client’s money.  When we sue this guy and his company we will post the suit on this blog. 

 

OK – for those that are interested here is the statute:

501.1377  Violations involving homeowners during the course of residential foreclosure proceedings.--

(1)  LEGISLATIVE FINDINGS AND INTENT.--The Legislature finds that homeowners who are in default on their mortgages, in foreclosure, or at risk of losing their homes due to nonpayment of taxes may be vulnerable to fraud, deception, and unfair dealings with foreclosure-rescue consultants or equity purchasers. The intent of this section is to provide a homeowner with information necessary to make an informed decision regarding the sale or transfer of his or her home to an equity purchaser. It is the further intent of this section to require that foreclosure-related rescue services agreements be expressed in writing in order to safeguard homeowners against deceit and financial hardship; to ensure, foster, and encourage fair dealing in the sale and purchase of homes in foreclosure or default; to prohibit representations that tend to mislead; to prohibit or restrict unfair contract terms; to provide a cooling-off period for homeowners who enter into contracts for services related to saving their homes from foreclosure or preserving their rights to possession of their homes; to afford homeowners a reasonable and meaningful opportunity to rescind sales to equity purchasers; and to preserve and protect home equity for the homeowners of this state.

(2)  DEFINITIONS.--As used in this section, the term:

(a)  "Equity purchaser" means any person who acquires a legal, equitable, or beneficial ownership interest in any residential real property as a result of a foreclosure-rescue transaction. The term does not apply to a person who acquires the legal, equitable, or beneficial interest in such property:

1.  By a certificate of title from a foreclosure sale conducted under chapter 45;

2.  At a sale of property authorized by statute;

3.  By order or judgment of any court;

4.  From a spouse, parent, grandparent, child, grandchild, or sibling of the person or the person's spouse; or

5.  As a deed in lieu of foreclosure, a workout agreement, a bankruptcy plan, or any other agreement between a foreclosing lender and a homeowner.

(b)  "Foreclosure-rescue consultant" means a person who directly or indirectly makes a solicitation, representation, or offer to a homeowner to provide or perform, in return for payment of money or other valuable consideration, foreclosure-related rescue services. The term does not apply to:

1.  A person excluded under s. 501.212.

2.  A person acting under the express authority or written approval of the United States Department of Housing and Urban Development or other department or agency of the United States or this state to provide foreclosure-related rescue services.

3.  A charitable, not-for-profit agency or organization, as determined by the United States Internal Revenue Service under s. 501(c)(3) of the Internal Revenue Code, which offers counseling or advice to an owner of residential real property in foreclosure or loan default if the agency or organization does not contract for foreclosure-related rescue services with a for-profit lender or person facilitating or engaging in foreclosure-rescue transactions.

4.  A person who holds or is owed an obligation secured by a lien on any residential real property in foreclosure if the person performs foreclosure-related rescue services in connection with this obligation or lien and the obligation or lien was not the result of or part of a proposed foreclosure reconveyance or foreclosure-rescue transaction.

5.  A financial institution as defined in s. 655.005 and any parent or subsidiary of the financial institution or of the parent or subsidiary.

6.  A licensed mortgage broker, mortgage lender, or correspondent mortgage lender that provides mortgage counseling or advice regarding residential real property in foreclosure, which counseling or advice is within the scope of services set forth in chapter 494 and is provided without payment of money or other consideration other than a mortgage brokerage fee as defined in s. 494.001.

(c)  "Foreclosure-related rescue services" means any good or service related to, or promising assistance in connection with:

1.  Stopping, avoiding, or delaying foreclosure proceedings concerning residential real property; or

2.  Curing or otherwise addressing a default or failure to timely pay with respect to a residential mortgage loan obligation.

(d)  "Foreclosure-rescue transaction" means a transaction:

1.  By which residential real property in foreclosure is conveyed to an equity purchaser and the homeowner maintains a legal or equitable interest in the residential real property conveyed, including, without limitation, a lease option interest, an option to acquire the property, an interest as beneficiary or trustee to a land trust, or other interest in the property conveyed; and

2.  That is designed or intended by the parties to stop, avoid, or delay foreclosure proceedings against a homeowner's residential real property.

(e)  "Homeowner" means any record title owner of residential real property that is the subject of foreclosure proceedings.

(f)  "Residential real property" means real property consisting of one-family to four-family dwelling units, one of which is occupied by the owner as his or her principal place of residence.

(g)  "Residential real property in foreclosure" means residential real property against which there is an outstanding notice of the pendency of foreclosure proceedings recorded pursuant to s. 48.23.

(3)  PROHIBITED ACTS.--In the course of offering or providing foreclosure-related rescue services, a foreclosure-rescue consultant may not:

(a)  Engage in or initiate foreclosure-related rescue services without first executing a written agreement with the homeowner for foreclosure-related rescue services; or

(b)  Solicit, charge, receive, or attempt to collect or secure payment, directly or indirectly, for foreclosure-related rescue services before completing or performing all services contained in the agreement for foreclosure-related rescue services.

(4)  FORECLOSURE-RELATED RESCUE SERVICES; WRITTEN AGREEMENT.--

(a)  The written agreement for foreclosure-related rescue services must be printed in at least 12-point uppercase type and signed by both parties. The agreement must include the name and address of the person providing foreclosure-related rescue services, the exact nature and specific detail of each service to be provided, the total amount and terms of charges to be paid by the homeowner for the services, and the date of the agreement. The date of the agreement may not be earlier than the date the homeowner signed the agreement. The foreclosure-rescue consultant must give the homeowner a copy of the agreement to review not less than 1 business day before the homeowner is to sign the agreement.

(b)  The homeowner has the right to cancel the written agreement without any penalty or obligation if the homeowner cancels the agreement within 3 business days after signing the written agreement. The right to cancel may not be waived by the homeowner or limited in any manner by the foreclosure-rescue consultant. If the homeowner cancels the agreement, any payments that have been given to the foreclosure-rescue consultant must be returned to the homeowner within 10 business days after receipt of the notice of cancellation.

(c)  An agreement for foreclosure-related rescue services must contain, immediately above the signature line, a statement in at least 12-point uppercase type that substantially complies with the following:

HOMEOWNER'S RIGHT OF CANCELLATION

 

YOU MAY CANCEL THIS AGREEMENT FOR FORECLOSURE-RELATED RESCUE SERVICES WITHOUT ANY PENALTY OR OBLIGATION WITHIN 3 BUSINESS DAYS FOLLOWING THE DATE THIS AGREEMENT IS SIGNED BY YOU.

THE FORECLOSURE-RESCUE CONSULTANT IS PROHIBITED BY LAW FROM ACCEPTING ANY MONEY, PROPERTY, OR OTHER FORM OF PAYMENT FROM YOU UNTIL ALL PROMISED SERVICES ARE COMPLETE. IF FOR ANY REASON YOU HAVE PAID THE CONSULTANT BEFORE CANCELLATION, YOUR PAYMENT MUST BE RETURNED TO YOU NO LATER THAN 10 BUSINESS DAYS AFTER THE CONSULTANT RECEIVES YOUR CANCELLATION NOTICE.

TO CANCEL THIS AGREEMENT, A SIGNED AND DATED COPY OF A STATEMENT THAT YOU ARE CANCELING THE AGREEMENT SHOULD BE MAILED (POSTMARKED) OR DELIVERED TO  (NAME)  AT  (ADDRESS)  NO LATER THAN MIDNIGHT OF  (DATE) .

IMPORTANT: IT IS RECOMMENDED THAT YOU CONTACT YOUR LENDER OR MORTGAGE SERVICER BEFORE SIGNING THIS AGREEMENT. YOUR LENDER OR MORTGAGE SERVICER MAY BE WILLING TO NEGOTIATE A PAYMENT PLAN OR A RESTRUCTURING WITH YOU FREE OF CHARGE.

(d)  The inclusion of the statement does not prohibit the foreclosure-rescue consultant from giving the homeowner more time in which to cancel the agreement than is set forth in the statement, provided all other requirements of this subsection are met.

(e)  The foreclosure-rescue consultant must give the homeowner a copy of the signed agreement within 3 hours after the homeowner signs the agreement.

(5)  FORECLOSURE-RESCUE TRANSACTIONS; WRITTEN AGREEMENT.--

(a)1.  A foreclosure-rescue transaction must include a written agreement prepared in at least 12-point uppercase type that is completed, signed, and dated by the homeowner and the equity purchaser before executing any instrument from the homeowner to the equity purchaser quitclaiming, assigning, transferring, conveying, or encumbering an interest in the residential real property in foreclosure. The equity purchaser must give the homeowner a copy of the completed agreement within 3 hours after the homeowner signs the agreement. The agreement must contain the entire understanding of the parties and must include:

a.  The name, business address, and telephone number of the equity purchaser.

b.  The street address and full legal description of the property.

c.  Clear and conspicuous disclosure of any financial or legal obligations of the homeowner that will be assumed by the equity purchaser.

d.  The total consideration to be paid by the equity purchaser in connection with or incident to the acquisition of the property by the equity purchaser.

e.  The terms of payment or other consideration, including, but not limited to, any services that the equity purchaser represents will be performed for the homeowner before or after the sale.

f.  The date and time when possession of the property is to be transferred to the equity purchaser.

2.  A foreclosure-rescue transaction agreement must contain, above the signature line, a statement in at least 12-point uppercase type that substantially complies with the following:

I UNDERSTAND THAT UNDER THIS AGREEMENT I AM SELLING MY HOME TO THE OTHER UNDERSIGNED PARTY.

3.  A foreclosure-rescue transaction agreement must state the specifications of any option or right to repurchase the residential real property in foreclosure, including the specific amounts of any escrow payments or deposit, down payment, purchase price, closing costs, commissions, or other fees or costs.

4.  A foreclosure-rescue transaction agreement must comply with all applicable provisions of 15 U.S.C. ss. 1600 et seq. and related regulations.

(b)  The homeowner may cancel the foreclosure-rescue transaction agreement without penalty if the homeowner notifies the equity purchaser of such cancellation no later than 5 p.m. on the 3rd business day after signing the written agreement. Any moneys paid by the equity purchaser to the homeowner or by the homeowner to the equity purchaser must be returned at cancellation. The right to cancel does not limit or otherwise affect the homeowner's right to cancel the transaction under any other law. The right to cancel may not be waived by the homeowner or limited in any way by the equity purchaser. The equity purchaser must give the homeowner, at the time the written agreement is signed, a notice of the homeowner's right to cancel the foreclosure-rescue transaction as set forth in this subsection. The notice, which must be set forth on a separate cover sheet to the written agreement that contains no other written or pictorial material, must be in at least 12-point uppercase type, double-spaced, and read as follows:

NOTICE TO THE HOMEOWNER/SELLER

 

PLEASE READ THIS FORM COMPLETELY AND CAREFULLY. IT CONTAINS VALUABLE INFORMATION REGARDING CANCELLATION RIGHTS.

BY THIS CONTRACT, YOU ARE AGREEING TO SELL YOUR HOME. YOU MAY CANCEL THIS TRANSACTION AT ANY TIME BEFORE 5:00 P.M. OF THE THIRD BUSINESS DAY FOLLOWING RECEIPT OF THIS NOTICE.

THIS CANCELLATION RIGHT MAY NOT BE WAIVED IN ANY MANNER BY YOU OR BY THE PURCHASER.

ANY MONEY PAID DIRECTLY TO YOU BY THE PURCHASER MUST BE RETURNED TO THE PURCHASER AT CANCELLATION. ANY MONEY PAID BY YOU TO THE PURCHASER MUST BE RETURNED TO YOU AT CANCELLATION.

TO CANCEL, SIGN THIS FORM AND RETURN IT TO THE PURCHASER BY 5:00 P.M. ON  (DATE)  AT  (ADDRESS) . IT IS BEST TO MAIL IT BY CERTIFIED MAIL OR OVERNIGHT DELIVERY, RETURN RECEIPT REQUESTED, AND TO KEEP A PHOTOCOPY OF THE SIGNED FORM AND YOUR POST OFFICE RECEIPT.

I (we) hereby cancel this transaction.

 Seller's Signature 

 

 Printed Name of Seller 

 

 Seller's Signature 

 

 Printed Name of Seller 

 

 Date 

 

(c)  In any foreclosure-rescue transaction in which the homeowner is provided the right to repurchase the residential real property, the homeowner has a 30-day right to cure any default of the terms of the contract with the equity purchaser, and this right to cure may be exercised on up to three separate occasions. The homeowner's right to cure must be included in any written agreement required by this subsection.

(d)  In any foreclosure-rescue transaction, before or at the time of conveyance, the equity purchaser must fully assume or discharge any lien in foreclosure as well as any prior liens that will not be extinguished by the foreclosure.

(e)  If the homeowner has the right to repurchase the residential real property, the equity purchaser must verify and be able to demonstrate that the homeowner has or will have a reasonable ability to make the required payments to exercise the option to repurchase under the written agreement. For purposes of this subsection, there is a rebuttable presumption that the homeowner has a reasonable ability to make the payments required to repurchase the property if the homeowner's monthly payments for primary housing expenses and regular monthly principal and interest payments on other personal debt do not exceed 60 percent of the homeowner's monthly gross income.

(f)  If the homeowner has the right to repurchase the residential real property, the price the homeowner pays may not be unconscionable, unfair, or commercially unreasonable. A rebuttable presumption, solely between the equity purchaser and the homeowner, arises that the foreclosure-rescue transaction was unconscionable if the homeowner's repurchase price is greater than 17 percent per annum more than the total amount paid by the equity purchaser to acquire, improve, maintain, and hold the property. Unless the repurchase agreement or a memorandum of the repurchase agreement is recorded in accordance with s. 695.01, the presumption arising under this subsection shall not apply against creditors or subsequent purchasers for a valuable consideration and without notice.

(6)  REBUTTABLE PRESUMPTION.--Any foreclosure-rescue transaction involving a lease option or other repurchase agreement creates a rebuttable presumption, solely between the equity purchaser and the homeowner, that the transaction is a loan transaction and the conveyance from the homeowner to the equity purchaser is a mortgage under s. 697.01. Unless the lease option or other repurchase agreement, or a memorandum of the lease option or other repurchase agreement, is recorded in accordance with s. 695.01, the presumption created under this subsection shall not apply against creditors or subsequent purchasers for a valuable consideration and without notice.

(7)  VIOLATIONS.--A person who violates any provision of this section commits an unfair and deceptive trade practice as defined in part II of this chapter. Violators are subject to the penalties and remedies provided in part II of this chapter, including a monetary penalty not to exceed $15,000 per violation. 

If the bank lost the note, will I get my house for free?

Welcome to the first installment of the Florida Foreclosure Defense Blog.   This Blog is brought to you by the law firm of Shuster & Saben, LLC, a firm with offices in Miami, Florida and Plantation, Florida that defends or is available to defend Florida homeowners in Dade, Broward, Palm Beach, Collier, Lee, St. Lucie, Indian River, Brevard, and Orange counties.  In the weeks ahead we will discuss the foreclosure crisis, what is happening in defended foreclosure cases, common questions about the foreclosure process, the origins of this crisis and potential solutions to the problem.  The opinions expressed herein are purely those of the blog authors and are not meant as legal advice. Homeowners who have been served with a foreclosure should consult and attorney and if they are indigent, unemployed, or qualify for legal aid, are likely to be able to obtain legal assistance for free or at nominal cost.

For our first topic I address the question often presented by potential clients:  If the Bank Lost the Note will I get my house for free?

Homeowners who have received their homes for free have reached the status of Urban Myth on the Internet.  Does it happen in the real world?  It does, but it does not occur that often.  In Florida Statute 71.011 provides for the Reestablishment of papers, records, and files in limited circumstances.  The statue in pertinent part provides as follows:

71.011 Reestablishment of papers, records, and files.--All papers, written or printed, of any kind whatsoever, and the records and files of any official, court or public office, may be reestablished in the manner hereinafter provided.

(1)  WHO MAY REESTABLISH.--Any person interested in the paper, file or record to be reestablished may reestablish it.

(2)  VENUE.--If reestablishment is sought of a record or file, venue is in the county where the record or file existed before its loss or destruction. If it is a private paper, venue is in the county where any person affected thereby lives or if such persons are nonresidents of the state, then in any county in which the person seeking the reestablishment desires.

(3)  REMEDY CONCURRENT.--Nothing herein shall prevent the reestablishment of lost papers, records and files at common law or in equity in the usual manner.

(4)  EFFECT.--

(a)  Any paper, record or file reestablished has the effect of the original. A private paper has such effect immediately on recording the judgment reestablishing it, but a reestablished record does not have that effect until recorded and a reestablished paper or file of any official, court or public officer does not have that effect until a certified copy is filed with the official or in the court or public office where the original belonged. A certified copy of any reestablished paper, the original of which is required or authorized by law to be recorded, may be recorded.

(b)  When any deed forming a link in a chain of title to land in this state has been placed on the proper record without having been acknowledged or proven for record and has thereafter been lost or destroyed, certified copies of the record of the deed as so recorded may be received as evidence to reestablish the deed if the deed has been so recorded for 20 years.

(5)  COMPLAINT.--A person desiring to establish any paper, record or file, except when otherwise provided, shall file a complaint in chancery setting forth that the paper, record or file has been lost or destroyed and is not in the custody or control of the petitioner, the time and manner of loss or destruction, that a copy attached is a substantial copy of that lost or destroyed, that the persons named in the complaint are the only persons known to plaintiff who are interested for or against such reestablishment. 

Our law firm has found that in over 50% of the foreclosure cases we are defending the lender has included a count to "reestablish" a "lost" note.  I think this statute was designed to protect the bank that 50 promissory notes in their vault on Monday, gets hit by a category 4 Hurricane on Tuesday, and takes diligent action to reestablish the notes as soon as the hurricane has past.  From time to time banks make mistakes and this statute could prevent a forfeiture from a clerical error.  In the foreclosure cases we are seeing it is a stretch to say the banks lost the note.  It appears readily apparent that the mortgage brokers who were selling their loans before the ink was dry on the closing real estate closing documents, and the banks forgot the meaning of the word "underwriting" were in such a hurry to write loans, bundle the loans  and sell the loans, that nobody was bothering to take physical possession of the note.  When the loan changes hands three of four times and the fourth holder of the loan says they lost the note, how can they lose something that they never had.  Many times the lender who brought the foreclosure action has no idea which bank lost the note.  

In the real world if the foreclosure complaint has a count to reestablish the note, the bank will have a much more difficult time in the foreclosure cases.  When a bank realizes that it does not have the evidence it needs to prevail and that obtaining such evidence may take years the bank is often amenable to settlement under terms very favorable to the homeowner.  While every case is different when faced with the possibility of losing banks offered homeowners settlements that cut the loan balance in half and reduce the interest rate to 4%.  

While some judges rulings, like the one below (Not our firms case) have set the bar to reestablish a note quite low others have held the banks feet to the fire.  An example of a case where the bank was allowed to reestablish the note follows:

 GLENDALE FEDERAL BANK, FEDERAL SAVINGS BANK, Plaintiff, v. PHILIP L. FRYBERGH; LAKEVIEW VILLAGE II, INC., a dissolved Florida corporation; SUMNER E. ROBINSON, Trustee of the Duncan Florida National Trust Dated 11 July, 1989, SEARS, ROEBUCK AND CO., a New York corporation; WASTE MANAGEMENT INC. OF FLORIDA, Successor by Merger to Southern Sanitation Service; and CAUSEWAY LUMBER COMPANY, INC., Defendants. 17th Judicial Circuit for Broward County, Civil Division. Case No. 93-25033-06. March 2, 1994. Geoffrey D. Cohen, Judge. Robert W. Lee, Smith & Hiatt, P.A., Ft. Lauderdale, for Glendale Federal Bank. Robert A. Arabian, Tamarac, for Frybergh and Lakeview.

PARTIAL SUMMARY JUDGMENT

AS TO COUNT I (LOST NOTE) AND

SECOND AFFIRMATIVE DEFENSE

IN FAVOR OF PLAINTIFF

THIS ACTION came before the Court on motion of the Plaintiff for the entry of a Partial Summary Final Judgment As to Count I (Lost Note) and Second Affirmative Defense, and after consideration thereof and the Court being duly advised in the premises and otherwise,

IT IS ADJUDGED THAT:

1. Plaintiff has established that it owns and holds a promissory note and mortgage, copies of which were attached to Plaintiff's Complaint in this action. The original note has been lost and is not in the custody or control of Glendale. The note has not been paid or otherwise satisfied, assigned or transferred. In Florida, the right to reestablish lost instruments is recognized both by common law and by statute. The destruction or unintentional loss of an instrument does not change the rights or obligations of the parties to the instrument. Florida Real Property Practice III §8.3 (2d ed. 1976). Upon establishing that the instrument has been destroyed, lost or stolen, an interested party is entitled to a judgment reestablishing the instrument. Fla. Stat. §71.011. Accordingly, the note is hereby re-established and the copy of the lost note attached hereto shall stand in place and in stead of the original promissory note. If the original note is ever located, Plaintiff shall immediately deliver it to the Court for cancellation.

2. In Defendant's Second Affirmative Defense, Defendant alleges that Glendale neglected to give Defendants written notice of default and an opportunity to cure before accelerating the note and mortgage. Glendale has, however, established that proper notice was given to Defendants as set forth in the affidavits previously filed with this Court. Evidence of a routine practice of an organization is admissible to prove the conduct of the organization on a particular occasion was in conformity with the routine practice. Florida East Coast Properties v. Coastal Construction Products, Inc., 553 So. 2d 705, 706 (Fla. 3d DCA 1989). The rule is that, when something is mailed by a business, it is presumed that the ordinary course of business was followed in mailing it, and that the mail was received by the addressee. Allstate Insurance Co. v. Eckert, 472 So. 2d 807, 809 (Fla. 4th DCA 1985); Brown v. Giffen Industries, Inc., 281 So. 2d 897, 900 (Fla. 1973). Glendale's affidavits establish that the ordinary course of business was followed in sending its notice of default and acceleration. Accordingly, judgment is hereby entered in favor of Plaintiff as to Defendants' Second Affirmative Defense.

Returning to the initial client question of If the bank lost the note will I get the house for free?  When this question is asked in a first meeting the best answer we can give is MAYBE.  Our firm is a firm of litigators and we fight foreclosures with the goal of getting the case dismissed.   On day one we will not know what cards are in the banks hand.  During the period the case is pending the lost note could be found.  What we do know is that the homeowners position will be stronger if the bank has the added burden of reestablishing the note.  If the bank or the banks lawyers make a mistake, which happens quite frequently we will attempt of capitalize on the mistake.  Many foreclosure cases settle and thus even if the homeowner does not get their house for free a resolution that keeps the homeowner in their home and drastically reduces their loan balance and interest rate is outcome worth working for.