Up until recently, an effective defense against a home foreclosure was rarely heard of. However, that is quickly changing since more and more homeowners today are experiencing success when it comes to challenging the process of foreclosure.
For the most part, this subsequent change has come to light from uncovering key evidence that a portion of the real estate industry has been using deceitful lending practices in many cases. Due to this evidence, the judicial system that once favored foreclosure action, is now siding with homeowners instead.
Both attorneys and homeowners are making the most of this change in the court system and are therefore challenging the foreclosure process itself in a number of ways.
Here are some of the most commonly used foreclosure defenses and how to address them in a court of law.
Raising a Defense to Home Foreclosure
In order to properly raise a defense to the process of foreclosure, it’s necessary to present the issue to a judge. This action is automatic concerning about half of all U.S. states, whereby most foreclosures are generally achieved through judicial foreclosure orders and civil lawsuits.
With regards to the remaining states, those foreclosures usually occur outside of court (nonjudicial foreclosures), which means there’s no automatic way to raise a legal challenge. For these particular states, in order to have your defense ruled by an actual judge, you must file a legal lawsuit that alleges that your home’s foreclosure is illegal due to some reason and request that the court postpone the foreclosure process pending the review of your case in court.
Mortgage Terms and Unconscionability
Through the years, lawyers have utilized a branch of law known as ‘equity’ in order to produce a variety of approaches to defending homes against the process of foreclosure. This branch of law concentrates on fairness concerning any situation wherein a legal statue isn’t providing enough relief. Overall, it typically isn’t enough to just complain that your foreclosure isn’t fair. Instead, it’s more effective to offer a particular justification regarding your position that was once recognized to the judicial system.
One key justification is a concept referred to as ‘unconscionability’, which means that your mortgage terms, and/or the circumstances that surround it, are so blatantly unfair that it literally shocks the judge’s conscience.
Foreclosing Party Failed to Properly Follow the Correct Protocol
Sometimes, the foreclosing party fails to properly follow the requirements for state procedures concerning a foreclosure. In such a case, it may be possible to challenge the action of the foreclosure. If you are successful, the judge will readily issue an order that requires that the foreclosing party must start over from scratch.
Nearly all judges will overlook mistakes that are seemingly inconsequential, including a misspelled name. Likewise, if the mistake of the foreclosing party doesn’t really cause any harm, perhaps it’s not even worth fighting about. As a general rule, more severe violations will elicit a more severe response from the legal system.
Active Duty Servicemembers
If you are actively serving in the military, the SCRA (Servicemembers Civil Relief Act) provides homeowners unique protection. More importantly, if your mortgage was initiated prior to serving as an active servicemember, your foreclosure has to take place in a court of law even if your state’s foreclosures traditionally happen outside of court. Therefore, if the process of foreclosure starts while you’re serving on active duty, you’ll get a postponement of the foreclosure proceedings by simply requesting it in writing from the court.
Foreclosing Party is Unable to Prove They Own the Mortgage
Only the owner of the loan or a person acting on behalf of the owner can bring upon action. If your mortgage has been bought and sold by a number of various banks, investors, and lenders, trying to prove who owns the mortgage is often difficult regarding the last holder. The correct documentation of the mortgage owner has to be represented, but is usually very hard for the party trying to foreclose to do so.
The Servicer of the Mortgage Made a Severe Error
A mortgage servicer, or a party who contracts with other financial lenders or banks to obtain and distribute mortgage payments along with enforcing the mortgage terms, makes mistakes quite often when working with borrowers. In fact, one study showed that as many as 1,600 plus Chapter 13 bankruptcy cases, most of the claims that were submitted by the owners of mortgages contained mistakes.
It’s quite possible to challenge a foreclosure due to errors, some of which may include:
• Imposing unusually high fees or any fees that aren’t authorized by the owner of financial lender
• Submitting your mortgage payments to the wrong people
• Significantly exaggerating the amount you need to pay in order to restore your home mortgage
Any errors regarding the amount you’re required to pay in order to reinstate your home mortgage are particularly serious. Why? This is primarily because an exaggerated amount could rob you of using the main available remedy to keep you in your current home. Use a good NYC Bankruptcy Law Firm to help you sort out all the legalities behind your home mortgage and the possibility of foreclosure so you can ultimately keep your home.