What is a foreclosure defense?

A foreclosure defense is a legal justification to avoid losing your home to judgment in court.  There may also be claims available to a homeowner facing foreclosure, in addition to defenses.

In Ohio, mortgage companies must establish that they are entitled to take your home through a court proceeding. They have to file a lawsuit in order to win. The judge must find that they proved their burden of evidence and are entitled to judgment, sale of your home, and to all of the proceeds from the sale.  You have the right to fight that process by presenting legal defenses and claims to the judge.

A foreclosure defense is a reason why the mortgage company may not be entitled to take your home. A simple defense might be that you actually paid on the loan, but they messed up the accounting. Usually it is not that simple. A common, and complex defense, is “lack of standing.” That means that the mortgage company has failed to establish it owns the loan or has the right to be in court.

Another defense regularly used for FHA and VA loans is called “conditions precedent." That defense is triggered under some federal regulations and the mortgage that requires some mortgage companies to take steps to try and avoid foreclosure before filing the lawsuit. If the mortgage company does not follow those rules, it could be required to dismiss, follow the rules, and only refile if a resolution fails to occur.

Defenses in the Civil Rules

Federal Statutory Claims

Common Law Defenses

Ohio Statutory Claims

Foreclosure defense touches on many areas of the law.  It touches on so many areas that it is one of the most complex areas of law to practice. There are common law defenses, state law defense, and federal law defenses (as well as potential claims and counterclaims).  State law and federal law both provide substantial consumer protections for someone facing foreclosure.  Because of the complexity of the law, we recommend you contact knowledgeable foreclosure counsel for help. Our phone number is (614) 221-9800.

The laws that come into play with foreclosure defense include those surrounding contracts and contract formation, tort law, civil procedure, some constitutional law, and even criminal law. Foreclosure defenses can arise from any aspect of the loan transaction, from the initial sales process, to loan disclosure failure, loan closing, post-closing, servicing, pre-foreclosure, foreclosure, and even to the post foreclosure property sale.

Foreclosure defenses can arise from both statutory law and common law, and involve state and federal law. Finally, defenses can take the form of passive blocks that prevent the bank taking your home, or they could take the form of very aggressive claims directed as a lawsuit directly at the bank. You need an attorney who can work within these laws and is familiar with mortgage regulations – someone like Troy Doucet and Doucet Gerling Co., L.P.A.

It is important to find an attorney familiar with this area of the law, or who can at least can identify rescindable errors under The Truth in Lending Act (TILA), and someone with a working knowledge of how note and mortgages transfer under the Uniform Commercial Code (UCC). TILA is the federal law that provides one of the greatest foreclosure defenses to homeowners, and the UCC is the uniform state law that affects one of the most common issues facing those in foreclosure: whether or not the lender has standing to foreclose. Each can generate substantial defenses for the consumer in, or facing, foreclosure.

There are multiple additional defenses that can provide substantial defenses to foreclosure, and having an attorney familiar with locating foreclosure defenses is important. Remember, each individual foreclosure situation is different and each requires an independent legal evaluation.

If you have been served a foreclosure lawsuit, you must take action or answer within 28 days, or potentially face a default judgment against you. It is our experience that many judges are not receptive to allowing late foreclosure answers, meaning it is better to answer than to ask the court to reopen the case later. If you have been served a foreclosure lawsuit, call us immediately at (614) 221-9800.

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