Foreclosure actions may seem frightening, especially when the lenders are massive banks, but homeowners are often able to defeat foreclosure lawsuits and keep their homes outright. In a typical case, several things can go wrong for lenders: Missing mortgage notes, shoddy paperwork, and a failure to follow legal procedures can all sink a foreclosure claim.
But it’s difficult to defeat mortgage lenders on your own. For more information about fighting to save your home, contact a foreclosure attorney today.
Common Defenses to Foreclosure Actions
Even if you’ve missed a series of mortgage payments, you may be able to successfully raise several defenses in a foreclosure lawsuit:
The bank can’t prove it owns the mortgage. Before foreclosing on a house, lenders must prove they actually own the mortgage. But today’s mortgages have been bought and sold so many times, the true owner is often hard to locate. Thanks to the frequency of mortgage trading, this is an increasingly fruitful defense for homeowners.
The lender failed to follow state procedures. Most mortgages are held by giant financial institutions that own tens of thousands of home loans. Because of the sheer volume of mortgages, some lenders forget to follow state foreclosure rules, such as the Illinois requirement to serve a notice of default before filing a claim. And sloppy procedural work can lead to the dismissal of a case.
The mortgage service made a mistake. Banks often hire mortgage servicers to take care of the billing logistics associated with your home loan. If these companies credit your payments to the wrong person, impose excessive fees, or make other clerical errors, you might be able to defeat the foreclosure claim.
The lender violated consumer protection laws. Federal laws, particularly the Truth in Lending Act (TILA), protect home buyers from unscrupulous lenders. Mortgage lenders must make a broad range of disclosures when offering home loans, and they often fail to meet these requirements. State laws also provide additional protection for homeowners.
Of course, while these are some of the most common foreclosure defenses, there are a number of other legal maneuvers that could defeat a foreclosure claim.
Many consumers, for example, have the option to file for Chapter 13 bankruptcy, which stops a foreclosure action in its tracks, and gives homeowners three to five years to catch up on their mortgage payments.
Remember, foreclosure lawsuits aren’t an automatic win for mortgage lenders. Everyone has a right to fight for their home.