Before I go on, let me emphasize these are my thoughts on the “Produce the Note Strategy”, and should not be construed as legal advice. This is purely food for thought! Many different people have heard of the “Produce the Note Strategy” to stop your foreclosure. Your lawyer attacks the foreclosure rights of whoever is foreclosing on you in this legal strategy.
MERS and its Assigns typically have the right to enforce the mortgage and foreclose regardless of ownership of the note due to clauses in the Deed of Trust and Note that states MERS and its assigns has that authority to enforce the note. (MERS and assigns are effectively Trustees/Attorney in Fact of Note Holder). If MERS or its Assigns are foreclosing, you can still ask MERS to produce the note giving MERS the authority clause to foreclose.
You can then ask MERS and its Assigns where it obtained its information that the loan is in default. They will respond with the Note Holder in due course. You can then 
challenge the legitimacy of the Note Holder in due course’s right to claim loan is in default as they have to prove they are a holder in due course.
This typically results in them having to produce the mortgage note or chain of evidence that they are the note holder in due course. Some jurisdictions have required all foreclosing parties to provide the original note and transfer documentation at the start of any foreclosure proceeding.
Now if the holder in due course (typically your loan servicer or bank) chooses to foreclose then they need to produce a note and proof the note was assigned/indorsed to them as a chain of ownership. This is where they have a problem as many times the notes were never indorsed and were tossed for electronic storage, or tossed by previous holders after transferring ownership via MERS recording system of securities, but not transferred as per state statute (this gets into securities transfers and note transfer law).
In either situation, the note holder in due course must prove they are the note holder to have standing to foreclose, or standing to declare the loan is in default so that the trustee (MERS/its assigns) may foreclose.
Basically, in discovery, a lawyer may ask the foreclosing party to prove they have the standing to foreclose, and the standing of the party who declared the loan in default.
For further reading, please see:
http://mattweidnerlaw.com/blog/wp-content/uploads/2010/02/ordercancellingvacatingsale.pdf
http://www.5dca.org/Opinions/Opin2010/080210/5D09-4035.op.pdf
There is always this discussion about “produce the note” in a foreclosure.
Why not just make them produce it now? (i.e., I’m still paying my mortgage, I’m current, just thinking ahead). I want to see the properly endorsed note, and I want to see it now!
You see, there is a possible problem with the mortgage backed security trusts we don’t talk about.
OK, stop here – the below is IMHO, I am NOT a lawyer, so take that w/a grain of salt. And if your not in an non-agency MBS, this may not apply to you.
Trusts are passive entities. They are a conduit of payments, but can take no active role in the management. So if they “do” anything outside passing a check over the desk (not literally, but you get the idea), then they loose the tax free status.
Who cares you say….well, Bank of New York Mellon does for one. They manage 100′s of Countrywide generated trusts. The trust I am in generates a mere $60K in fees. But….it generates a $6 Million dollar pass through in payments and interest (now, this is reduced since the origination, I could do the math on that new data set, I’m just lazy)
So hundreds of millions of dollars pass across the trust manager’s desk (he’s a nice guy actually).
Imagine of one day, everyone who ever had a Countrywide originated note, sent their trust manager at BNY Mellon a note simply asking for the note?
They could not respond. Yet, they would have to. Somehow.
“which way do I go, which way do I go”!
They’d punt. They would MAKE Bank of America buy back the note. Suddenly, BofA would be looking at repurchases of notes, and thinking “oh shoot, there goes my balance sheet”.
Chaos and pandemonium would ensure. Shock and Awe baby.
I’m making them produce the note. So I went to the county clerk. The note is not a public document. Went them to the title company (the new one, the old one went BK). They looked on line. (they are the trustee of my Deed, which means these guys are the ones who I said – by signing the document – could actually sell my house if I go default….which I’m not, cause I pay my bills on time….)
Went to the title company. They said….”that’s funny, this note is not shown as every having been assigned”. They have a system, “TIN” I think he said. Anyway, no assigns on record. So the originator still is shown as my lender and owner of the note – even though he’s not.
Called the originator. Said “Can you send me proof you sold the note?” They asked why, in a nervous laughing sort of way. They said they’ll send me what they have, next week.
That’s where I stand. But I’m going to make someone, somewhere, show me the note.