Defenses to Foreclosure

Knowing that your home is in foreclosure or may be in the near future can be a scary situation. We depend on our house for shelter and comfort. It gives us a place to eat, sleep, entertain, and possibly work.

Knowing that your home could be taken away from you just like that can be devastating. While many homes are rightfully foreclosed on due to nonpayment of the mortgage, sometimes banks and lenders get it wrong. They may make mistakes on payments and other factors that can lead to false foreclosures and unnecessary stress for homeowners.

There are two main foreclosure defenses: procedural and substantive. A procedural defense is a defense based on the rules that apply to the case, while a substantive defense is one that is based on the specific facts of the case.

The most common procedural defense is a lack of standing. You may be able to successfully argue that the foreclosing party cannot produce the promissory note on which the loan is based, which could be an issue, since many loans are transferred multiple times over the course of a mortgage. However, foreclosing parties tend to put more effort into recordkeeping nowadays, so this defense may not hold up.

Another thing to consider is adherence to the law. If the foreclosing party failed to follow the procedures required by state law, you may be able to get the case dismissed. However, the court will likely dismiss the case “without prejudice,” which means that the foreclosing party can file the case again in the future if they meet the requirements. So this may be more of a delay than a dismissal, but it still buys you some time to get current on payments.

In any case, the error must be significant for a court to dismiss a case on procedural grounds. If you can show harm, such as never receiving notice of the default, for example, then you’ll want to inform the court of this.

You could also use a substantive defense. It’s possible that the mortgage servicer failed to promptly credit your payments or credited your payments to another account. You will need to show proof, such as mortgage statements showing missed payments but bank statements proving otherwise.

Another substantive defense would be a mistake in stating the amount that you need to pay to reinstate a mortgage. An overstatement can cause a homeowner to give up their home because they believe that they do not have enough funds to reinstate the mortgage, so it’s not a minor error at all.

There could also be issues with the records regarding a current loan modification. If the  mortgage servicer has not adjusted its records to reflect the modification, it might proceed with a foreclosure. You will need to show that you are making payments under the loan modification.

Seek Legal Help

In many foreclosure cases, the homeowners can no longer afford their homes. However, there are situations in which the lender is at fault for causing the foreclosure.

Fight back with help from Fort Lauderdale foreclosure defense lawyer Edward J. Jennings, P.A. We can help you devise a sound defense strategy. Get started by filling out the online form or calling 954-764-4330.

Source:

law.com/newyorklawjournal/2024/01/16/borrowers-common-defenses-in-mortgage-foreclosures-negated/?slreturn=20240116162454