Two legal decisions – one in a New York State Court and one in a Tampa, Fla. foreclosure court – to cancel a homeowner’s mortgage debt after the bank couldn’t find the mortgage paperwork, are sending shivers down the spine of mortgage lenders.

In September, a New York resident facing foreclosure requested a copy of the deed on his home. When the mortgage provider, PHH Mortgage, couldn’t come across with the paperwork, a bankruptcy judge waived the homeowner’s entire mortgage debt. The amount waived? $461,263.

Also this fall, a Florida foreclosure court ruled in favor of a jobless (and about to be homeless) Tampa-area woman who filed a request for her original mortgage paperwork. Using free court documents to make her request, the woman found, no doubt to her delight, that the mortgage carrier didn’t have the deed. Just like that, the foreclosure judge put a freeze on the proceedings and threatened to cancel the entire debt if the paperwork wasn’t delivered to court.

Are these stories anecdotal? Or do they signify a trend that could release millions of homeowners from foreclosure – and, like the New York homeowners, have their mortgage debt canceled entirely?

The data might surprise you. A 2008 University of Iowa study concludes that mortgage companies have a nasty habit of misplacing key mortgage documents. In the study, Iowa researchers reviewed 1,700 bank foreclosure cases and discovered that 40% of the time, the original home note was nowhere to be found.

There’s a legal precedent, too. In 2007, a federal judge in Cleveland tossed out 14 foreclosure cases when the lender, Deutsche Bank National Trust, couldn’t find the original paperwork.

So how can anxious homeowners take a crack at the missing paperwork gambit? It’s not easy, there are no guarantees, and you’ll likely need a good real estate lawyer.

But why not take a look? Start with the Consumer Warning Network Web site – that’s the site the Tampa woman used to save her home (for now) from foreclosure.

The site has free legal templates for key steps like firing off a letter to your lender or issuing a “motion to compel” to get a court to toss out a foreclosure case.

If you’re already fighting a foreclosure notice, you’ll need to get organized fast. The Consumer Warning Network Web site advocates taking these steps (directly from the group's site).

If your lender has already filed suit to foreclose on your home:

  • File a “legal request” form in court (the CWN has a sample one on its site). It’s a fill-in-the-blank legal request to your lender asking that the original note be produced, before it can proceed with the foreclosure. In some jurisdictions, the courts require the original request to be filed with the clerk of court and a copy of the request to be sent to the attorney representing the lender. To find out the rules where you live, call the Clerk of Court in your jurisdiction.
  • If the lender’s attorney does not respond within 30 days, file a motion to compel with the court and request that the court set a hearing on your motion. That, in effect, asks the judge to order the lender to produce the documents.
  • The judge will issue a ruling at your hearing. Many judges around the country are becoming more sympathetic to homeowners, because of the prevalence of predatory lending and servicing. In the past, many lenders have relied upon using lost note affidavits, but in many cases, that’s no longer enough to satisfy the judge. They are holding the lender to the letter of the law, requiring them to produce evidence that they are the true owners of the note.

If you are in default, but your lender has not yet filed suit against you:

  • File a legal request form to get the original paperwork. If the lender does not respond and files suit against you to foreclose, follow the steps above.
  • What have you got to lose? If your home is already in foreclosure proceedings, or you are in default and headed in that direction, take a shot at getting the original paperwork.

That shot might be  a long shot, but it’s one more potential weapon in protecting your home.