Featured News 2014 Judicial Foreclosure: Your Rights & Defenses

Judicial Foreclosure: Your Rights & Defenses

In some states, a lender is required to go to court in order to start the foreclosure process. This judicial foreclosure is triggered by a lender filing a lawsuit, the first step in a process that can last several months. This is supposed to afford the defendant time to find another residence and to save funds for the move. This legal process also would allow you to raise defenses in court against the foreclosure, unlike in non-judicial foreclosure where you would have to file a lawsuit of your own to raise these defenses. Here is an overview of how this court process works, and how you might be able to fight against it.

First of all, it takes several steps to get this foreclosure through the courts. After you fall behind on your mortgage, your lender sends you a notice of intent to foreclose. Then your lender sues you. You next get notice of the lawsuit, or in other words, you are served with a summons and complaint. Now you have about 15 to 30 days to offer a defense, otherwise the foreclosure can continue automatically. The lender then sends you notice of an intended sale. At least three and a half months into the process, the house goes up for auction. You can stay in the house until you are officially evicted.

What are your available defenses? A real estate attorney can help you understand your rights in your specific case, but some possible defenses include:

  • "Unconscionable" Mortgage Terms: In some cases, someone can prove that the lender exacted the loan under deeply unfair circumstances, such as by duping someone who is not fluent in English into signing off an obscenely high loan.
  • The Servicemembers Civil Relief Act (SCRA): If a lender starts the foreclosure process while someone is on active duty, that service member can submit a written request for a postponement.
  • Breach of State Laws: It is possible that the lender goofed up how they started the foreclosure. For instance, they may have forgotten to send you a notice of default. If it is a serious enough mistake, the judge can tell the lender to begin all over again with the process, buying you more time.
  • Unproven Ownership of the Mortgage: If your mortgage has gone through multiple banks, investors, etc., the person or entity that began the foreclosure proceedings may not be able to establish that they are in fact the lenders.
  • Error Committed by the Mortgage Servicer: This is way more common than you may think. It is possible that a mistake could send your payments to the wrong person, and that could be the real reason why you appeared to fall behind on payments. Perhaps fees were exacted through error, or perhaps an error was made in the calculation of what you would have to pay to reinstate the mortgage.
  • Unfair Lending Practices: Perhaps you can establish that your lender violated either the Truth in Lending Act (TILA), the Home Ownership and Equity Protection Act (HOEPA), or a law in your own state.

While in some cases, it may make sense to leave your place and start afresh, or perhaps to engage in alternative processes to foreclosure, such as a short sale or Chapter 13 bankruptcy, sometimes, you may have stronger options for moving forward and even keeping your home. Find out if your rights have been violated by a lender and what options you have at your disposal to fight a judicial foreclosure. Know your choices and defend your rights when you start working with an experienced real estate lawyer today!

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