When homeowners default on a loan for their property, the lender may take steps to foreclose on the property and sell it at auction. There may be specific defenses, however, that the homeowner can raise to defend against foreclosure. It is important that he understands the process of foreclosure and how it works, regardless of whether you are afraid that the bank will start foreclosure proceedings or you are already into a foreclosure lawsuit.
It would be best to have an expert in foreclosure matters who ensures that you understand your rights and options and who will fight to protect those individual rights. If you’re facing a foreclosure and you’re not sure where to start, then you’ve come to the right place. Let’s look at some of the common foreclosure defenses.
1.Let’s Start Here: The Process of Foreclosure
The law primarily governs real estate transactions, and the process involved in foreclosure may vary from one country to another, state to state. However, the process is often similar in many regions.
According to expert advice from https://www.fight13.com/practice-areas/foreclosure-defense/, a homeowner must work with a legal team that understands the foreclosure law process so he/she can achieve maximum benefit and recovery in one’s case. Before a foreclosure is considered, the lender may send the homeowner a letter to notify them that he/she is in default of the loan. In many cases, the notice indicates how much the homeowner owes and may include the due date. The balance must be repaid to avoid the lender taking extreme steps and advancing in the foreclosure process. There are legal documents that may be served on the homeowner from a lawyer notifying him/her of a complaint filed in the court where the lender intends to sell the property.
2.Loan Mitigation Stage
This is the stage where a mortgage company determines if a homeowner qualifies for a loan modification before foreclosing. The company must notify the homeowner in writing of any available loan modification or any other convenient option that may aid the homeowner to retain their home. If there is a pending loan modification application, the company cannot foreclose the property while this decision is being considered. If the foreclosure process has already kicked off, it must stop while the loan modification process or other option is pending. The homeowner also has the right to appeal the decision if the loan modification is declined.
3.Failure by Foreclosing Bank to Follow Procedure
Every region has specific procedures for foreclosures. In some cases, the foreclosing bank may ignore procedural conditions for bringing a foreclosure into action. If this happens, an individual might be able to challenge the foreclosure in court. If your challenge is triumphant, the court will issue an order requiring the foreclosing bank to start the process again. In many cases, judges will overlook minor errors, like the misspelling of a name. Likewise, if the foreclosing bank’s mistake doesn’t cause you any harm, it may not be worth fighting over. Any severe violation will get a more severe response from the court.
4.Lack of Standing by the Foreclosing Party
You must understand that only the loan holder (loan owner or an individual acting on behalf of the owner) can foreclose. If the foreclosing party can’t demonstrate it owns the loan, then it doesn’t have the standing to foreclose. On different occasions, banks have difficulty producing the promissory note, which proves loan freehold. In many scenarios, the debt has been sold to other investors and banks over and over again. If the loan was bundled and securitized, determining if the foreclosing party owns it could prove to be quite a challenge.
Even in situations where the original note is available, the endorsements sometimes aren’t in order. Nowadays, many banks and investors are careful when initiating a foreclosure. It is now mandatory that any gaps in the paperwork are addressed before any decision can be made.
5.Lack of Proper Notice
The law dictates the type of notice that must be provided to homeowners facing foreclosure. The law may dictate that certain forms be sent to homeowners. In other scenarios, the law may also dictate that multiple copies are sent or that specific provisions are included in notice documents. Such simple issues as the plaintiff not including conditions in bold or on colored paper may justify a court finding that the notice requirements were not strictly followed.
A successful foreclosure defense may prohibit or delay the foreclosure process, or it may merely induce a lending institution to negotiate loan mitigation that allows you to stay in your home, which, of course, was the goal in the first place. If you are considering a foreclosure defense suit, it is recommended that you seek a professional legal attorney’s services.