Potential Foreclosure Defenses

mortgage-foreclosure-defenseForeclosure defenses are often unheard of and sometimes hard to execute. Up until now, defenses against foreclosure were a rare oddity, but as of recently more and more homeowners are challenging their foreclosures, and many of them are successful.

Part of the reason why this is changing is because news of real estate fraud and sneaky lending practices are far-reaching. Before these eye-opening events, courts usually signed foreclosure actions with little to no thought; but now courts are taking a closer look and feeling more sympathetic to the home owners.

Attorneys along with their clients who are facing foreclosure are heeding their opportunity to defend themselves against their foreclosure is various ways. Outlined here are some of the most common defenses used for foreclosure defenses and how you can properly execute them.

Your first step is to bring your foreclosure defense before a judge. Half of the United States handles foreclosure cases inside of the courtroom, while the other half of the country takes part in non-judicial foreclosures. In these states, you must instead file a lawsuit outlining why the foreclosure is illegal and request that the foreclosure be put on hold pending a review by the court.

Here are some of the well-used defenses.

Terms of mortgage are unconscionable

Attorneys have been using a branch of law called equity for years in order to fight foreclosures. Equity focuses on fairness in places were legal statute doesn’t give adequate relief. It isn’t enough to just say that to foreclosure isn’t fair, you have to provide a specific reason that has been recognized by the law.

One reason is that the terms of your mortgage are so unfair that it “shocks the conscience of the judge.” An example of this defense that was successful involved a borrower who spoke little English and was pressured into a loan that he clearly couldn’t afford to pay and did not have the help of an attorney.

You are on active duty

If you are an active member of the military, you qualify for the Service members Civil Relief Act (SCRA) which gives you certain protections. If you took out your mortgage before active duty, then the foreclosure has to take place in a court. If you are on active duty when the foreclosure is initiated, then you can request a postponement in writing.

Foreclosure didn’t follow state procedures

If the party that is foreclosing on your home doesn’t follow the state laws, then you have the right to challenge the foreclosure. An example of this would be if you aren’t properly served a notice of default, which is a state law. Simple errors like spelling mistakes on a name are not considered grounds for a foreclosure defense.

The foreclosing party can’t prove ownership

A foreclosure can only be brought by the mortgage holder. If your mortgage has been handed off over and over again, which tends to be the case, they might have a hard time proving exactly who owns it. If documents can’t be generated proving ownership, then you have a defense.