Losing your home because of foreclosure is devastating, both financially and emotionally. We hope that we can give you a guide to foreclosure defense so that if you are found stuck in this upsetting situation, you are armed with the knowledge to fight for your home. Foreclosure defense can be very tricky, so before proceeding into the courts you should enlist the help of an experienced attorney.
Because so many real estate frauds have been unearthed, more and more foreclosure defenses are successful than ever before. Judges are beginning to sympathize with homeowners and are taking extra care to review all aspects of a foreclosure case. Use this to your advantage, because now is the best time as opposed to recent years to have a successful foreclosure defense.
There are a few tactics you can use when stating your case for why your foreclosure shouldn’t go through.
The mortgage servicer made a mistake
It’s not uncommon for mortgage servicers to make a plethora of errors when drawing up mortgage contracts for banks and lenders. A recent study by a law professor found that in 1,700 bankruptcy cases, most of the claims submitted were riddled with errors on the part of the mortgage owner. Some mistakes that you should be on the lookout for include:
- Crediting your payments to the wrong lender
- Imposing fees that were excessive or not approved by the owner or lender
- Overstating the amount you must pay to restore your mortgage
A mistake in the amount you need to pay to reestablish your mortgage are the most serious because that is the sole discretion keeping you from keeping your home. If the lender or bank says you owe $5,000 to reinstate your mortgage because they tacked on unnecessary fees, but you only actually need to pay $4,300, that could be what is standing between you and your rightful home.
The original lender was involved in unfair practices
If you can prove your lender violated any federal or state laws, then you might be able to keep your home. There are two federal laws in place to specifically protect homeowners from any unfair or illegal practices; the Truth in Lending Act and the Home Ownership and Equity Protection Act. Lenders can violate these laws by not disclosing certain things in your mortgage papers, including annual percentage rate, finance charges, total payments, the payment schedule, and the like.
Terms of the mortgage are immoral
This can be a more difficult defense to execute, but done successfully and it can shock even a judge. If you can prove that you were treated unfairly during the drawing of your mortgage contract or were deceived in any way, then you have a foreclosure defense. If terms are properly explained, you don’t have an attorney present, or are deceived in any way then you can use this defense.
Lender/owner didn’t follow foreclosure laws
There are certain procedures, such as notifying the borrower of default, that are required by the state. If these laws aren’t followed, then you have a case.