It is difficult to believe, but there are defenses to foreclosure. Granted, most defenses merely postpone the inevitable but this may be a good thing for those debtors who are able to find funding to pay off their note and mortgage and just need the additional time to do so. There are also real defenses that may actually prevent a debtor’s lender from prosecuting a successful foreclosure action.
The scope of this writing is limited and is not intended as a substitute for a legal opinion based on a proper review of individual circumstances. My purpose is to promote hope, generate a desire to inquire into one’s situation no matter how desperate it may seem, and seek out legal counsel being fully prepared to discuss all alternatives.
One of the first considerations for debtors in foreclosure proceedings is bankruptcy. Before a judgment in foreclosure is entered, it is wise to consult with a qualified bankruptcy attorney. The lawyer may be able to provide many acceptable alternatives. One advantage is that bankruptcy, properly and timely filed, will stop a foreclosure action dead in its tracts. The bankruptcy court will issue a stay of the foreclosure proceedings and although the stay may be lifted for good cause at a later date, the time and other benefits that a bankruptcy lawyer can muster for the debtor may be the best solution for some debtors, especially in states with homestead protection laws.
Once you receive a summons from the court notifying you that a foreclosure action has been filed, the debtor should carefully review the circumstances, make an appointment with a lawyer who practices in this field within sufficient time for the lawyer to file a responsive pleading.
In preparing for your first meeting with the attorney, the following are the some of the matters you want to be prepared to discuss:
(1) Did you receive a notice from your lender that you were in default or breached any of the provisions/terms of your loan/mortgage? When?
(2) Was there any conduct on the part of your lender causing you to feel pressured you into signing the note and mortgage even though you did not really agree with all the terms and conditions?
(3) If your mortgage and note encumbers more than one parcel of real estate, did your lender fail to honor any release provisions in the mortgage upon payment of a certain number on installments or amount? Did you request release provisions when applying for the loan/mortgage?
(4) Were you made promises, which turned out later to be false promises that induced you into signing a loan agreement with your lender?
(5) Did your lender fail to disclose important, legally defined as material facts, about your loan? A lender that fails to disclose confidential information such as appraisal results, for reasons of self-interest that have an adverse affect on you as a borrower, may be held liable for the failure. In Florida, borrowers for negligent misrepresentation may pursue some fraud claims as well.
(6) Did your lender take any action that interfered with your relationship with other lenders?
(7) Did you lender take some or your entire loan collateral (including cash bank accounts) from you prior to a default date?
(8) Has your lender disclosed your account information or any information about the condition of your collateral property to any third party without your permission and has that disclosure caused you any harm such as making it impossible to borrow from another lender.
(9) Do you feel that your lender or lender’s agent used deceptive, harassing or abusive tactics in attempting to collect on your loan/mortgage?
While not complete in any respect, the above questions should be discussed with your legal advisor. Having information and being otherwise prepared in advance to discuss these matters will save you time and money. Don’t hesitate to contact a lawyer. Ask the lawyer how many cases like your he/she has handled before. Discuss fees and terms of payment. A competent lawyer will not be offended by any legitimate question. Most importantly, don’t wait to contact a lawyer; time is not on your side.
