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.