Defending a Lawsuit Against Foreclosure.

What is A Foreclosure Lawsuit?

A foreclosure is a legal process that involves a lender approaching a court of law to seek an order to allow them recover the balance of a loan from a borrower who has not been able to either keep up with the repayment terms, or to completely repay the debt, by selling off the assets used as collateral to obtain the loan.

A foreclosure lawsuit is not dissimilar to any other kind of lawsuit. The same way one can be sued for a medical misdiagnosis, personal injury or even a breach of contract is the same way one can be sued for a foreclosure.

Peradventure you are sued, you usually have between 20 and 30 days to answer in court or else, the plaintiff can get a default Judgment against you. Once the judgment has been taking against you, the plaintiff can restrain your bank account, seize your asset or even garnish your wages. By this time, no trial would be necessary. This judgment thus allows the lender to sell off your asset to recover said debt.

To prevent this from happening, it is always advisable to answer the foreclosure lawsuit.

This article will explain the things you need to understand when defending a foreclosure lawsuit and other related subjects.  

What Happens If You Don’t Answer A Foreclosure Notice?

Not responding to a foreclosure lawsuit is very likely to work against you, as a default judgement will very likely be given against you. Meaning that the relief which the plaintiff sought will automatically be given to them. It is therefore in your best interest to respond to such notice as soon as possible, or at least within the specified timeframe given to respond to it.

Many people often find going to court or appearing before a judge somewhat scary, so if such applies to you, then you might consider retaining the services of a foreclosure lawyer or even a business attorney who specializes in real estate or property law.

Whatever the case, as part of the plaintiff’s lawsuit against you, they will usually present certain documents to backup their case against you. Such documents will usually consists of things like the contracts you signed when obtaining the mortgage, accountings of both missed payments and the payments you made, served notices, communications with you, declarations and so on.

As previously stated, if you don’t pitch up, the court will automatically rule against you via a default judgement. Similarly, even if you do pitch up but you are not able provide any information contrary to what the lender provides, then the judge is also likely to accept the argument of the plaintiff and thus give the lender the right to foreclose on your property. If however, you provide evidence or information that contradicts what the plaintiff tenders before the court, then the court will have no choice but to provide a date for a proper hearing and possibly a trial afterwards, to allow both parties to properly present both legal and factual arguments supporting and opposing the foreclosure.

Discovery and Trial

Before the trial date, there will be a process called “discovery” which involves both you and the foreclosing party requesting for documents, facts and other important details from each other.

During the trial, the foreclosing party must offer proof of a right to foreclosure the property in question. You as the defendant, will have to prove why the foreclosing party should not be allowed to foreclose on your asset. There may be witnesses who will be questioned and cross- examined.

At the end of the trial, the judge will either give an order for foreclosure or dismiss the case.

Causes of Actions for Wrongful Foreclosures

Wrongful foreclosure occurs when a lender starts a non-judicial foreclosure against a homeowner when the lender has no legal cause to do so. Non-judicial foreclosures contain a clause in the agreement which allows a lender to foreclose without filing any lawsuit.

Wrong foreclosures may be based on inability to foreclose because of mistakes on the recorded paperwork which can be attributed as negligence or even fraud, void assignment of the deed of trust or even on statutory violations.

There are different causes of actions for wrong foreclosure. Wrongful foreclosure actions may suggest that the amount which is stated in the notice of default as owing and due is incorrect due to the following points:

  • Misapplication of payments
  • A breach of contract
  • Incorrect adjustment in business rate
  • Incorrect tax impound account
  • Unfairness in business practices
  • Refusal to consider a loan of modification
  • Improper notice to the asset owner
  • Inability of the lender to discuss foreclosure alternatives with the borrower
  • Inability of the lender to provide payoff figures

Wrongful foreclosure usually occurs due to miscommunication between a lender and the borrower. This could be because of an incorrectly applied payment, a mistake in interest rate charges and inaccuracy in information communicated between the lender and borrower.

Common Foreclosure Defenses

There are different ways to save your asset from foreclosure. Some of these foreclosure defenses can be used to delay or stop the foreclosure process if the lender did not follow the proper state procedures for the foreclosure process.

Most foreclosure defenses do not completely stop the foreclosure process however. Some defenses may delay or even restart the process. This in itself can potentially be advantageous as it can give you more time to try and get back on track with the repayment of the debt.

Some of these foreclosure defenses that can delay or stop the process are:

  • Statutory violation
  • Mistake in the mortgage service
  • Fraudulent conditions on the mortgage paperwork
  • Predatory lending
  • Inability of the lender to follow the proper foreclosure procedures
  • Issues with the promissory notice
  • Interest rates charges that violates the state or federal law

To discover if you have one or more foreclosure defenses and how to give those defenses in court, consider talking to a qualified foreclosure attorney who can advise you on what to do in your particular situation.

Conclusion

Whenever you receive a foreclosure summon, do not hesitate to answer the summon as ignoring it will be to your disadvantage. Consider employing a foreclosure attorney immediately.

A foreclosure attorney will help in answering summons and pointing out the errors in the complaints made by your lender. Also, an attorney will help create foreclosure defense strategies while pursuing a permanent solution that will prevent the foreclosure such as a loan medication platform.