Step 4 in defending a foreclosure actions.
Once the homeowners have gone through the rules that they and the bank’s attorneys will need to follow in court and have requested additional time through a Motion for Extension of Time, it is appropriate to begin researching various legal defense options. While many of these defenses against foreclosure may be used in the answer to the complaint, a few of them should be looked into first to determine if filing a Motion to Dismiss is appropriate.
This part of the process can be labor intensive and quite time consuming, so borrowers must be willing to put in the hours of research into how various federal laws work, what would indicate a violation, and what the violation means to the bank’s lawsuit. The use of one defense or another will, of course, depend on the homeowners’ goals with the house, whether they want to keep it, force the bank to negotiate a mortgage modification or other solution, or simply get as much time as possible to sell or move out.
If they are trying to have a mortgage rescinded entirely, borrowers may not want to raise defenses with a maximum penalty to the bank of a few thousand dollars, for instance. Finding a stricter law with heavier penalties would make more sense. But for homeowners just trying to get some extra time to save up money to move out, the more that can be argued against the bank, the more time the lawsuit will take.
In any case, homeowners trying to stop foreclosure by defending the lawsuit should pay special attention to the defenses that would allow them to have the entire mortgage rescinded or the lawsuit thrown out of court. Certain violations of the Truth in Lending Act (TILA) and the Home Ownership and Equity Protection Act (HOEPA) would result in severe penalties for the bank. As well, the messiness of mortgage assignments may cast doubt on the mortgage company’s ability to sue in the first place, if it can not prove it owns the original note.
Also, homeowners should have as one of their goals filing a Motion to Dismiss the case based on the bank’s lack of legal standing or failure to follow the notification and pre-foreclosure procedures before initiating the lawsuit. Both the Federal Housing Administration (FHA) and state foreclosure laws dictate what a bank must do before it declares a house to be in foreclosure and attempts to have the homeowners removed by court order. If the lender does not follow these procedures, the lawsuit may be thrown out for the present time until the bank complies with the requirements. And these defenses can be raised before an answer to the complaint is even filed, if a Motion to Dismiss is filed instead.
Filing a Motion for Extension of Time may be almost automatic for homeowners facing foreclosure. The benefits of this apply to nearly all borrowers, including those who want extra time to mount a defense, work with the lender on a solution to foreclosure, or just want an extra few weeks to get their finances in order before moving out. But for those owners who are serious about defending their home in court, the next step after getting more time is simply researching what laws and regulations apply to their case and beginning to mount their defense.
Posted by George Beckus Esq
