Mortgage Foreclosure Defense Explained In Online Blog Post

A large percentage of the asset protection inquiries I have received in the past year have been from people concerned about a mortgage foreclosure on one or more of their properties. Most people who contact me are interested in asset protection from deficiency judgments. One of the issues I discuss with my clients facing a foreclosure and a potential deficiency claim is whether the homeowner should hire an attorney to defend the foreclosure even though the homeowner is  unable, or unwilling, to continue making mortgage payments. There are advantages and disadvantages to foreclosure defense, and the decision to defend or default depends on the individual debtor's situation and his assets. I found blog post  by the Florida law firm of Parker and DuFresne in Jacksonville which post  discusses legal defenses to a foreclosure action even when the homeowner is behind in payments. I am providing an  excerpt from the post below so that homeowners can learn how some attorneys defend foreclosure suits.

The Parker and DuFresne blog states, in part, the following:

"While you are litigating the foreclosure case, you are not required to make your normal monthly mortgage payments.  The legal process will afford you time to reinstate the mortgage, sell your home, file a bankruptcy or move out.  You may be able to force the lender to completely rewrite the terms of your note and mortgage, enabling you to keep your home.

This may sound too good to be true, but you may actually have valuable defenses and counterclaims against your mortgage company that could actually prevent foreclosure and even require your lender to pay you damages.  Across the country, judges are punishing mortgage companies for incomplete record keeping and for violations of the Truth In Lending Act.  You may be able to allege valid defenses including fraud and Truth In Lending Act violations.

Are you aware that your mortgage company is probably not the same company that actually loaned you the money to buy or refinance your home?  How do you know if the mortgage company suing you has been properly assigned your note and mortgage?  Your mortgage company may have failed to properly assign the note and mortgage before initiating the foreclosure.  Does your foreclosure complaint even have copies of the note, mortgage and purported assignment attached? 

Most likely, these documents are not attached, and may not even be in the possession of your mortgage company.  Your mortgage company may be attempting to substitute your original note and/or mortgage with a purported copy.  This is called a “Count to Establish Lost Documents."  There are strict legal requirements to establish a lost note or mortgage, and your mortgage company may be unable to meet the requirements if challenged.  

If your current mortgage company is not your original lender, it probably has never read your mortgage.  Your mortgage may require that the plaintiff accelerate (i.e. demand) the entire balance of the note.  Your mortgage company may have failed to do that, which may entitle you the opportunity to cure the mortgage by paying the reinstatement amount.  It is also common for mortgage companies to inflate the balance due on the mortgage by charging homeowners junk fees, such as Broker Price Opinions (BPO), property inspections and other "property preservation expenses."

So, essentially, your mortgage company may have filed an improper foreclosure lawsuit, but your time is limited.  You have or will be served a copy of the foreclosure complaint by a process server.  You typically have only 20 days to respond to the mortgage company's complaint, so you need to see an attorney immediately if you wish to defend against the foreclosure.  If you are beyond the twenty days, there are still defenses that can be raised."

I do not handle mortgage foreclosure defense. I know several attorneys in the central Florida area to whom I refer mortgage defense clients.

posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida