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If a foreclosure lawsuit has been filed against your property, YOU NEED TO KNOW that there is hope! For a variety of reasons, it may be possible to legally save your home, your rental property, or your commercial property from foreclosure.
Some Attorneys exclusively advocate Bankruptcy proceedings as a remedy for mortgage foreclosure, but in most foreclosure cases, a Bankruptcy action should be considered as only one of many potential strategies that we offer for keeping your home. The first strategy to consider is to aggressively defend against the foreclosure and force the Plaintiff to prove its case.
You should consult with an attorney, not only if you desire to keep your property, but also even if you have decided to let the property go back to the lender — because serious consequences can result if you do nothing to defend the case. In addition to your having lost the property itself, if the foreclosure goes undefended, the Plaintiff (the lender, loan servicer or other party that is suing you) can potentially obtain a “deficiency judgment” against you, which is a court order requiring you to pay the lender the difference between the debt owed and the current market value of the property. You can also potentially become liable for additional income taxes after the foreclosure, if the Plaintiff files a form 1099 against you using your Social Security number(s) to report its alleged “loss” to the IRS as your alleged “gain” as income. Also, if you hire a foreclosure defense lawyer, he will be better able to directly negotiate with Plaintiff’s counsel to obtain a settlement in your favor with a possible permanent loan modification.
There are in fact several valid, legal ways to defend against the Plaintiff’s attempt to foreclose and take your property away from you, including but not limited to the following:
The Plaintiff may not have the right or entitlement (“standing”) to file the case against you in the first place! It must prove that it is entitled to enforce the Note and Mortgage that you signed – which may be very difficult for it to do. For instance, the Plaintiff must typically produce the original Note you signed that obligates you to pay the lender. If the original Note is not in its possession, the Plaintiff may have difficulty foreclosing on you.
Even if the original Note is in the Plaintiff’s possession, a Plaintiff suing on a Note that was originally payable to another entity (the original lender) must prove to the Court that the Note was properly assigned and transferred to the Plaintiff. In many cases the loan has been sold multiple times to various entities. The Plaintiff must prove that each and every link in the chain of title to the Note included a proper and lawful assignment and transfer. If Plaintiff or its assignor acquired the Note as result of a merger with another bank, the Plaintiff must prove that your loan was specifically included in the body of assets targeted by the merger. In many cases the Plaintiff will have great difficulty proving this element of its case.
Even if the Plaintiff is able to prove the above elements of standing and its right to enforce the Note, there are many other elements of its case the Plaintiff must prove in order to foreclose, including its burden in proving that it has complied with all “conditions precedent” to filing the lawsuit, which are actions it must prove that it took before bringing the foreclosure action. Such actions usually include requirement to serve you with a proper Notice of Default and Intent to Foreclose, which must be properly worded as specified in the Mortgage. If your loan is a Federally insured loan such as a VA or FHA loan, the Plaintiff was also required to comply with the National Housing Act and arrange for you to have a face-to-face meeting and a chance to go through credit counseling before the case was filed. Failure to comply with these requirements are ground for possible dismissal of the case.
The Plaintiff must also prove the amount that is due on the Note and that it kept proper accounting records over the life of the loan. If the loan was serviced by multiple servicing companies over the life of the loan (as many loans are), this too may be very difficult for the Plaintiff to prove. The Plaintiff must prove that each successive servicer properly verified the accuracy of the business records it received from prior servicers.
The Plaintiff and/or its servicer(s) may have failed to properly process and apply payments and may have violated any number of other loan servicing and other laws, including: Florida Deceptive and Unfair Trade Practices Act, Florida Consumer Collection Practices Act, Federal Real Estate Procedure Act, Florida’s Fair Lending Act and others. There may be violations of TILA, RESPA, HOEPA, etc. Such violations as these can be more complex for us to raise and prove, but could give rise to your filing of a Counterclaim against the Plaintiff resulting in a very favorable outcome for you.
In foreclosures on rental and commercial property the Plaintiff will often file a Motion early on seeking a Court Order appointing a receiver or requiring you to surrender your incoming rent payments either to the Plaintiff or to the Court registry pending the outcome of the litigation. Such motions can potentially be defeated, but must be vigorously opposed and defended against.
You have a fundamental due process right to defend your case. You have the right to get information and documents from the Plaintiff to assist you in your foreclosure defense (this is called “Discovery”). You have the right to file your own case (“Counterclaim”) against the Plaintiff if it has acted in legally inappropriate ways; you may even be entitled to damages and have your attorney’s fees paid, not to mention the costs of your case.
In short, there are many ways to defend against the foreclosure, as well as to hold the Plaintiff responsible for any inappropriate actions on its part. The above-referenced defenses are only a sample of what we may be able to do in defending your case. A detailed review of your paperwork could reveal more about other defenses you may have as well. If you would like assistance from a successful foreclosure defense attorney in determining what your legal options are, please give our law office a call now for a FREE telephone consultation regarding your specific case.
The Law Office of Mark Schleben provides experienced, strategic and aggressive foreclosure defense for clients living in the west-central Florida counties of Pinellas, Hillsborough, Pasco, Hernando, Manatee, and Polk.
Having been admitted to the Florida Bar in 1981, Attorney Mark Schleben has vast experience as a litigator and trial attorney, representing clients in thousands of cases, both in Federal and State courts, covering a wide range of legal issues including criminal defense, divorce, estate planning, complex civil litigation and bankruptcy. Since the housing and economic crash of 2007-2008, Mr. Schleben has focused much of his practice on foreclosure defense, and on working out settlement agreements with lenders when appropriate.
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