Be Prepared for a Backlash - Part I.

For those jumping up and down in glee hollering about the “produce the note” strategy I would like to first say use it if you think you can pull it off. It can and will buy you some time in some circumstances. Chances are there will be some people who find several months of breathing room.

But I would offer a word of caution – remember “The Golden Rule:” He who has the gold makes the rules. And as legitimate as this emerging strategy is, He who has the gold is not going to sit by and let a handful of what will be painted as “squatters” turn the system upside-down and keep it that way. The creditor's bar can and will learn from their mistakes in most cases unless trial counsel is a complete buffoon.

If you believe you’re judgment-proof (no equity, no assets or no income that could be garnished) you may not have a lot to worry about except for some research, writing and trips to the courthouse. But if you do have some equity you’re trying to protect and are working, any additional costs they face in a prolonged court battle (some utterly contrived but some, such as their cost of a bond if required by the court) are going to be slapped onto a judgment against you if you lose. And if a court sees your defense as nothing but an abuse of the process to keep you in a home without paying for it, you may get an ugly surprise at the end.

He who has the gold isn’t liking having the ugly mess behind the hide-the-note scheme brought to light, and you can bet there will be some cases put up to be lessons to borrowers.

And there's more going on behind the scenes - more on that later.

The Honorable Judge Roy Bean