Foreclosure Actions – How To Defend Your Foreclosure Lawsuit

While it is true that homeowners can stop foreclosure by filing a plea with the courts, there are instances when the lender or lending company will not negotiate with the homeowner and pursue foreclosure. For example, a homeowner may have been diligent in paying mortgage insurance premiums but has fallen behind in payments. In cases like these, the lender will be likely to initiate the proceedings against the homeowner. In order to protect their own interests, many banks and other financial institutions use a common foreclosure defense: They file a complaint of foreclosure with the courts.
| Foreclosure Actions – How To Defend Your Foreclosure Lawsuit

While it is true that homeowners can stop foreclosure by filing a plea with the courts, there are instances when the lender or lending company will not negotiate with the homeowner and pursue foreclosure. For example, a homeowner may have been diligent in paying mortgage insurance premiums but has fallen behind in payments. In cases like these, the lender will be likely to initiate the proceedings against the homeowner. In order to protect their own interests, many banks and other financial institutions use a common foreclosure defense: They file a complaint of foreclosure with the courts. Click here for more information about Phoenix bankruptcy attorney
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Unfortunately, homeowners who face this type of foreclosure are often unaware of their rights and do not know what defenses they have available to them to prevent the lender from taking them to court. Homeowners should first educate themselves about foreclosure defenses and the legal avenues available to them. This includes researching the federal Truth in Lending Act (TILA) as well as local foreclosure laws in their area. While the Servicers of Bankruptcy cannot go into court to force a person into foreclosure, they can initiate a complaint of default against the debtor.

Some homeowners may be lulled into believing that they do not have any defenses when it comes to foreclosure actions. This is unfortunate because any homeowner is entitled to retain an attorney. An attorney can help a homeowner understand the legal channels available to them to fight back against the lenders. It is also important for homeowners to be aware of the defenses which may be available to them under state law. For example, in some states nonjudicial foreclosure actions only require a signature on a check. There are state-specific defenses which can be used in state-specific court proceedings.

One of the most common foreclosure defenses is the deed of trust. A deed of trust is a legal document which is signed by the borrower indicating that the property is being held jointly with the lender for the benefit of all borrowers. The lender must approve the deed of trust in order for the loan to be valid. In some states the lender must file a lawsuit in order to force a homeowner to redeem the property. States that have no statute of limitations usually allow redemption after a specific period of time.

Another common foreclosure defense is that the mortgagee did not understand the terms and conditions of the loan agreement. This template message is a common defense in this situation, but in truth it is a red Herring. If the mortgage was properly drafted the lender clearly stated the terms and conditions of the loan, including the amount of monthly payments required and the procedure for making the payments. The lender also almost always provided a balloon payment if the default became significant enough to threaten the property loan. If the borrower actually understood the exact language of the original contract, it is virtually impossible for them to argue that they were unaware of the entire meaning of the document.

A third common foreclosure defense is that the mortgagee was not given proper notice of default. Even if the mortgage holder gave notice to the other party in the form of a recorded letter, this does not mean that the notice was properly given. States have adopted different formats for recording notices and it is difficult to know whether or not these notices were properly filed in the court. State courts tend to ignore foreclosure defenses when it is not able to reasonably be proven that there has been a foreclosure.

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