What Are the New Foreclosure Defenses?
If your home has gone into foreclosure, the sooner you get legal advice about your situation, the better. To consult with a bankruptcy lawyer immediately, fill out this free online evaluation form or call Total Bankruptcy at 1 (877) 349-1309.
It's important to fight your foreclosure with help from a lawyer because of several important rulings in recent foreclosure cases by judges who decided that, for one reason or another, the foreclosure actions against the house in question were illegal. Your lawyer may be able to help you determine whether any of these recent decisions can be applied to your case to help you escape foreclosure.
- Insufficient Documentation by Lender: In October 2007, Judge Christopher A. Boyko ruled that 14 separate Ohio foreclosures were invalid because the plaintiffs (the entities bringing the foreclosure suits) couldn't prove that they owned the homes in question.
- Technical Errors by Lender/ Loan Servicer: The July 2008 issue of the American Bankruptcy Institute Journal reports that some judges have ruled in favor of homeowners in cases where the plaintiff made too many technical errors on the paperwork initiating foreclosure actions.
- Consumer Rights Violations: When you signed the original papers for your mortgage, you should have received several disclosures informing you of your rights as a borrower. The ABA Journal notes that judges have come to cases that involve violations of these consumer rights laws.
- Improper Fee Adjustment by Lenders: Research by Professor Katherine M. Porter of the University of Iowa College of Law reportedly supports the observations of Louisiana Judge Elizabeth W. Magner: the majority of lenders fail to make proper adjustments to billing statements after receiving orders to do so from the bankruptcy court.
- Predatory Lending Practices: While no legal definition exists for "predatory lending," the ABA Journal indicates that, as more and more questionable practices by lenders come to light, judges have become more and more receptive to lawyers who argue that predatory practices were used to originate the loan.
Because of the way the mortgage market works these days, many companies that bring foreclosure suits do not actually have proof of ownership of the mortgage. In essence, Judged Boyko used the tools of subprime mortgage lending against those who had implemented them irresponsibly. Depending on where you live, your lawyer may be able to make this argument in your case.
This defense can be time-consuming but effective; sources indicate that some judges have allowed borrowers to rescind on their mortgage loans (that is, apply all payments toward the principle and refinance the remaining amount) because of such errors.
It seems most borrowers never check up on their lenders, and can end up paying thousands of dollars more than they owe. This can be an important source of money for those trying to stay current on financial obligations after a bankruptcy filing.
Your lawyer may be able to use one of these defenses or a similar defense to protect you and your home from foreclosure. Get in touch with Total Bankruptcy today and let us connect you with a lawyer in your area before it's too late!