Legal Question in Real Estate Law in California

The way you leverage MERS is this. Your original promissory note is probably lost. Under California law, the lender can foreclose without the original note. However, if you are in a Chapter 13 or other bankruptcy case, you can object to the lender's claim and possibly render the debt unsecured, because the lender would be required to produce the original note to establish standing. MERS is not a software program, it is a corporation with thousands of officers and zero employees. There are some very interesting deposition transcripts out there from various court cases regarding MERS, search for [MERS deposition]. There are also some interesting judicial opinions from the Central District of California Bankruptcy Court on the lost note/standing issue. You would need a very, very good bankruptcy lawyer who is up to speed on the latest MERS cases and on Pooling and Servicing Agreements (PSAs). I know you will find this material if you search for it. I should add that 90% of web sites about foreclosures/MERS/lost notes are written by non-lawyers and you must not believe or trust these web sites. You will have to wade through a lot of BS to get to the accurate information, but it is out there.

I don't see any point in filing an otherwise-unnecessary bankruptcy just to position yourself to play lost-note games. You are probably going to end up in the same place vis-a-vis losing the property, and have a bankruptcy on your record to boot. If you talk to a bankruptcy lawyer as Mr. Stone suggests, fine, but get discussion of the downside of BK as well as the possibility to raise MERS or lost-note obstacles to foreclosure.

The lender doesn't need the note to commence nonjudicial foreclosure through exercise of the power of sale in California. A lot of the "lost note" defense material that you are reading about is hogwash when applied to most foreclosures.

I have a whole prepared memorandum on this issue if you want it, outlining the law and explaining the issue in depth. Just send me a personal e-mail.