If you or your customers are facing foreclosure, make sure that the company demanding your money has proof that it owns your debt.

The AP article from yesterday, Homeowners' rallying cry: Produce the note, starts with this:

"Kathy Lovelace lost her job and was about to lose her house, too. But then she made a seemingly simple request of the bank: Show me the original mortgage paperwork. And just like that, the foreclosure proceedings came to a standstill."

Mortgages were issued and then repackaged as securities and often the banks don't know where the original paperwork is and cannot prove who owns the loan.

This isn't new information; it's just a reminder.

Here's a blog post from almost exactly a year ago: Some Banks Can't Foreclose, Unable to Find Loan Documents.

The blogger, Yves Smith, writes, "I have no doubt that the judges are angered by the conduct of the bank in trying to enforce an agreement without being able to prove that they have legitimate standing."

Sometimes, the paperwork is lost because the mortgage factories went out of business. All too often, these companies saw their business as the creation of stock rather than the supervision of debtors.

But some of the blame has to lie with banks' cost cutting. Smith wrote -- a year ago -- "banks have gotten so keen to cut costs that they have simply gotten sloppy. Large transactions used to have procedures in place with a certain amount of double checking to make sure everything, including the forms, were in order. That appears to have gone by the wayside at some firms."

With the U.S. in recession, it pays to make sure that your bank is playing by the rules.