Foreclosure 101: Foreclosure Defense
If you have tried to contact your Lender for a loan modification, short sale or deed in lieu and were unable to obtain the result desired, you are not alone. Nowadays, Lenders and their servicers are inundated with requests for loan modifications, short sales and deeds in lieu and they simply do not have the resources or competent personnel to process these requests in any efficient manner. Many time, homeowners are in the process of a loan modification, deed in lieu or short sale and the Lender proceeds to file a foreclosure anyway. A good way to think of your Lender is like a tree with several branches going in different directions. There is a loan modification branch, a short sale branch, a deed in lieu of foreclosure branch, a collection branch, and a default services branch, and then the foreclosure branch, just to name a few.
Do not assume that one branch knows what the other is doing!! Simply put, they do not. Even worse, the leaves at the top of the tree, don’t know what the various branches are doing. There is generally no coordination between the various “branches.” Often times, the various “branches” are located in different states and even in different countries. Although each Lender differs on how many missed payments result in the file being turned over for foreclosure, a general matter, once your loan goes 90-120 days past due you can expect that you will be receiving notice from the foreclosure branch, that a foreclosure suit will be filed. A Lender can turn your loan over for foreclosure after as little as 1 or 2 missed payments. This is true even if you are in the process of a loan modification, deed in lieu or short sale approval. Your submission for loan modification, deed in lieu of foreclosure or short sale DOES NOT stop your Lender from filing a foreclosure.
If you are served with a foreclosure suit, no matter what your plan is, you should ALWAYSdefend yourself.
******It is imperative that if you are served with a foreclosure complaint that you file a response within twenty days of when you are served. This is a must, must, must!!!!!******
An attorney can be an invaluable tool in assisting you through the foreclosure process. At a minimum, even if you do not have a viable defense to the foreclosure suit, an attorney can guide you through the process so that you know what to expect, when to expect it, and assist you in obtaining the best result possible under your circumstances. You may have defenses that you do not know about. Do not assume that just because you have defaulted on your loan that foreclosure is your only alternative. Even if you are in default on your loan, there are alternatives short of foreclosure that an attorney can help you achieve.
The Responsive Pleading
The responsive pleading is the first pleading that you file in response to the foreclosure Complaint which must be filed with the court, with a copy sent to the Lender’s attorney no later than twenty (20) days after you are served with the foreclosure complaint. Failure to file a responsive pleading within the twenty (20) days will result in a default being entered against you. A default operates legally as an admission of those matters plead by the Plaintiff in the Complaint, which will entitle the Lender to move more quickly from filing to foreclosure sale. If you have defenses and you do not raise them, they could be waived. The initial responsive pleading will generally take the form of either an Answer with Affirmative Defenses or Motion to Dismiss.
Challenge Standing If Appropriate With a Motion to Dismiss
One thing every Homeowner who has been served with a Foreclosure Complaint must verify is that the Plaintiff suing them is the correct party and has proper standing to file the foreclosure suit. Very often, loans are sold and re-sold and/or transferred several times making it difficult to ascertain who the proper Plaintiff should be. Many Lenders employ servicers to service the loan so you must ascertain if you are being sued by the Lender, the actual owner of the loan, or the Lender’s servicer. Verifying a party’s standing to sue you will prevent the possibility that someone else later comes back and asserts that they own and hold your loan.
The best way to determine if there may be a standing issue in your foreclosure is to look at the documents attached to the Plaintiff’s Complaint, which should, at a minimum, be a Promissory Note and Mortgage. The Florida Rules of Civil Procedure require that all documents upon which a lawsuit is based be attached to the Complaint. In residential mortgage foreclosures, the foreclosure Plaintiff is now required to verify its foreclosure Complaint. A failure to verify the Complaint, if properly challenged, could result in the Plaintiff having to amend its Foreclosure Complaint.
Under the Twelfth Judicial Circuit’s Administrative Order and Foreclosure Checklist, a foreclosure Plaintiff will ultimately be required to file the original note and mortgage, or file an appropriate cause of action to re-establish same. They are also required to have the assignment of mortgage or endorsed note in the court file before the Final Judgment of Foreclosure will be granted. It is in your best interest to force the Plaintiff to establish their standing at the outset of your case so that you can rest assured that you are dealing with the proper Plaintiff and true owner and/or holder of your Note and Mortgage throughout the entire proceedings. Knowing who the real party in interest is also enables you to research loan modification and short sale criteria of that particular Lender so that you can maximize your chances of success in pursuing various foreclosure avoidance avenues of resolution.
Many people in foreclosure assume that if they have defaulted on their loan, their case is hopeless and there are no defenses. Simply put, this is not true! Some people are embarrassed about the foreclosure filing and will ignore the fact that they may have significant defenses to either the foreclosure or to the Lender’s request for a deficiency judgment.
When it comes to foreclosure, there is no shame, there is no blame.
Foreclosure is a national crisis which is affecting hundreds of thousands of families across the entire country each year. Please do not stick your head in the sand and ignore the fact that you may have very valid defenses to the action filed against you. Some typical defenses to a foreclosure action and/or deficiency judgment proceeding include predatory lending, irregularities in the loan origination, funding or transfer process, equitable defenses, breach of duty of good faith and fair dealing, Truth in Lending violations, failure of the Lender to follow the appropriate conditions precedent to acceleration and foreclosure such as notice of default, opportunity to cure, and compliance with the Twelfth Judicial Circuit’s RMFM Program and Federal Fair Debt Collection Practices Act requirements, if applicable, just to name a few. An experienced attorney can assist you in determining and raising appropriate affirmative defenses.
If you raise valid defenses, you may be able to use those defenses as leverage to convince your Lender to modify your loan and/or settle the foreclosure matter without the possibility of the Lender pursuing a deficiency judgment. You are not required to vacate your home while you defend your foreclosure. At a minimum, raising appropriate defenses will require the Lender’s attorney to specifically address and defend your defenses in court before they can proceed to obtain a Final Judgment of Foreclosure.
It is important for anyone faced with a foreclosure suit to verify all information submitted by the Lender and appropriately challenge any inaccurate information. At a minimum, even if you ascertain that you do not have any viable defenses to the foreclosure action, you should verify that all of the information that your Lender submits to the Court as to the amounts alleged to be due and owing any included in the total Foreclosure Judgment are true and correct. Double check the principal balance, interest calculations, fees and charges added and make sure that those numbers line up with your records. If you find any mistake, you must challenge them by an appropriate Affidavit filed and served in accordance with the Rules of Civil Procedure. The amount of the Final Judgment of Foreclosure sets the your right of redemption and operates as a baseline for any deficiency judgment that the Lender may attempt to obtain at a later time. As such, it is of the utmost importance that you verify all information so that a judgment is not entered against you in an amount in excess of what is actual due and owing under the terms of the Note and Mortgage.
Post is a section from “Foreclosure 101: The Basics Of The Foreclosure Process In Sarasota, Manatee And Desoto County”
by Nancy Cason, Esquire, Attorney at Law with Syprett, Meshad, Resnick, Lieb, Dumbaugh, Jones, Krotec & Westheimer, P.A.
E-mail: [email protected]
Foreclosure 101: The Basics Of The Foreclosure Process In Sarasota, Manatee And Desoto County (4 Part Series by Nancy Cason)
Foreclosure 101: Foreclosure Basics (Part 1)
Foreclosure 101: Foreclosure Alternatives (Part 2)
-> Foreclosure 101: Foreclosure Defense (Part 3)
Foreclosure 101: RMFM & Conclusion (Part 4)