If you received a foreclosure notice, then you should strongly consider defending your legal position. The mortgage company may even be correct that you missed payments, but that does not mean that they are entitled to a foreclosure judgment against you. Even if you missed payments AND the mortgage company is entitled to a judgment, you could still terrifically benefit from foreclosure defense.
Before the mortgage crisis in 2007, 2008, and 2009, it was relatively rare to successfully defend a mortgage foreclosure case. However, the economic impact of those years brought to light seriously irresponsible mortgage company behavior. The news outlets told stories of robo-signing, shadow banking, subprime lending, and predatory lending. Since then, public and judicial sympathies have become wary of mortgage lenders and protective of consumers.
Mortgage servicers don’t always apply payments appropriately. Some homeowners get a final bill before the foreclosure case, and it seems outrageous. You knew you were behind, not THAT much. In fact, you previously sent in a couple payments trying to catch up. Well, it may be that your payment was applied to another person’s account.
Mortgage servicers sometimes apply too many fees and charges. You can only be charged what the mortgage says you can be charged. It may be that you did not reinstate your mortgage because the amount was too great, and part of the reason it was so great was because the servicer added fees that were not contemplated by the mortgage. This is against the rules.
The mortgage company engaged in unfair practices when lending to you. State and federal laws impose restrictions against unfair lending practices. The bank has a duty to keep you from making a verifiably bad decision to borrow.
The mortgage company cannot prove that it owns the mortgage. There is only one party that is entitled to enforce your mortgage against you. Has your mortgage been sold? Are you sure that this foreclosing bank is the owner of the mortgage? Even if you think you are sure, can they produce ownership documentation to legally prove it?
State law procedures for foreclosure are not always followed. Most giant banks have a national presence. States have different legal procedures that the bank is required to follow in order to foreclose. It is worth finding out if they followed them.
Service members are entitled to different foreclosure treatment. For example, mortgage companies are sometimes required to undergo a judicial foreclosure against service members, even in non-judicial foreclosure states. Are you certain that your mortgage company is complying with the requirements of your case?
Sometimes the mortgage companies get it right and there are no mistakes.
What if you defaulted on the mortgage, and the mortgage company did nothing wrong? First of all, you can’t pretend to know whether or not the mortgage company made a mistake without legally preserving those defenses and demanding documents and evidence from the mortgage company. However, there is still a very good reason to defend your case regardless of those defenses: FORECLOSURE DEFENSE BUYS YOU TIME. A non-contested foreclosure case timeline can be as short as 4 weeks from initiation to judgment. The sale can occur thereafter. By contrast, a contested foreclosure case can take years.
There are many reasons why you may simply need more time in your home. You may need time to find another place. Perhaps you can’t afford to move right away. Renting is going be very expensive. You may have physically disabled people that live with you, or maybe you are nearing the end of a pregnancy. It might be in the middle of a school year. There are a ton of reasons to want to stay in your home longer. Contesting the foreclosure case can buy you the time that you need.
Other loss mitigation options sometimes only become viable if there is a contested case. Your main loss mitigation options are: mortgage modification, deficiency waiver, deed in lieu of foreclosure, and short sale. Mortgage companies are often more likely to accept deeds-in-lieu or deficiency waivers if they are met with the resistance of a contested case. It is also helpful to have the bank’s foreclosure attorney overseeing the mortgage modification process. Short sales sometimes just need more time. So, each of these helpful options can be aided by defending your foreclosure case.
If all of this legal work sounds really expensive, know that it doesn’t have to be. You’ll never know unless you ask. The potential rewards can significantly outweigh the cost. Here is a practical example. You can use whatever monthly figure you prefer, but let’s say your rent payment is going to be $1,200 per month after you leave your home. Let’s also say that contesting your case to determine whether or not the mortgage company is entitled to relief ends up allowing you an extra 10 months in the home. Then, you’ve just saved $12,000. Plenty of attorneys will take your case for less than half of that and let you pay it out over the duration of the case. Don’t use money as the excuse to avoid defending your legal position. In fact, use it as the reason to do it.