The Attorneys at Weller Legal Group are dedicated to trying to help you save your home. Foreclosure Defense encompasses a variety of different strategies. Weller Legal Group offers a free Foreclosure Consultation to review your case and provide all the information necessary to make an informed decision.
In order for a banking institution to Foreclose on a home and repossess the property, it must have a Note, Endorsements, Mortgage and Assignments. If the bank cannot prove ownership, they cannot Foreclose. If the bank has all their paperwork in order, it may request an Order to Show Cause and proceed to Summary Judgment.
The homeowner may be entitled to Mediation while in Foreclosure. Weller Legal Group will represent any Client who desires to enter Mediation with the Foreclosing Bank. We will attempt to Mediate or Modify your mortgage to obtain more favorable terms, such as reduced monthly payment and interest, principal reduction of mortgage balance, and waiver of past due amounts
What Are Some Procedural Defenses Available to Homeowners Facing Foreclosure?
Protections are available for U.S. service members. The Servicemembers Civil Releif Act offers limitations on foreclosures on properties owned by active duty service members. It limits the ability for Lenders to get default judgments, and requires Lenders to provide written notice of the SCRA’s mortgage-relates provisions.
Florida is a judicial foreclosure state. All foreclosure actions must go through the Florida courts. Florida foreclosure procedures are laid out in Fla. Stat. § 702.01-.11. A foreclosure complaint under Chapter 702 requires the Lender to state the factual basis for why it is entitled to enforce the mortgage note, it must detail a clear chain of endorsements, assignments, and transfers of the note and mortgage, and the Lender must include exhibits demonstrating its allegations. Florida Rules of Civil Procedure 1.110 requires the complainant verify the complaint, under penalty of perjury, that the facts alleged in its complaint are true and correct to the best of its knowledge.
Due on sale provisions grant the lender the ability to call the debt as due upon the sale of the mortgaged property to a third party. This provision is included in almost all mortgages and is usually enforced whenever the property changes hands. These types of provisions are usually governed entirely by the terms of the contract.
Regarding acceleration of debt by lender, and foreclosure defense; Notes and mortgages usually include a provision giving the holder of the note and mortgage the right to accelerate the debt. Often this provision states that failure to pay a monthly payment is a default and it gives the holder the right to accelerate the balance of the debt as due immediately. This requires the mortgagor be sent a notice of acceleration, accompanied with a notice of default. However, even if a mortgagor has been sent a notice of acceleration, the acceleration may be improper if the mortgagee waives, or is stopped, from its right to acceleration.
Waiver of acceleration can occur when a mortgagee accepts payments on a loan after the loan has defaulted. A pattern by the mortgagee of accepting late payments may indicate a modification of the terms of the loan. However, the defense of waiver or estoppel of acceleration of debt is often not available after notice of default, or the notice of acceleration has been given to the mortgagor.
Does the party have the authority to foreclose? The ability to foreclose on a property is restricted to parties that can demonstrate they have standing. If a mortgagee does not prove that they suffered an injury, by the mortgagor, they are unable to bring a foreclosure before the court. Therefore, mortgagees are required to demonstrate they are the proper party to bring the foreclosure. In foreclosure actions, this is shown through demonstrating ownership rights in the note and the mortgage. Inability to show they have the note and the mortgage may preclude the mortgagee from bringing a foreclosure action.
Another aspect of ensuring the party has authority to foreclose on a property is ensuring the party bringing the foreclosure is asserting its own rights and interests. These objections generally must be raised timely, and it is important to raise this as an affirmative defense in the answer to the complaint. Often, in foreclosure matters, a court will not allow an assignment of an interest to occur after a complaint for foreclosure has been filed. Rather the new assignee of the mortgage and note often must dismiss the action and refile the complaint.
What Are Statutory Defenses Available to Homeowners Facing Foreclosure?
HOPEA is a subsection of the federal Truth in Lending Act. This federal regulation aims to guard against predatory lending for certain types of loans. It applies to purchase money mortgages, refinances, and certain home equity loans. HOEPA requires additional disclosures on creditors. Prior to opening a loan covered by HOEPA, creditors must disclose information like an explanation of the consequences of a default and disclosure of certain loan terms. HOEPA also prohibits certain acts and practices by lenders, like charging a fee to modify or amend a high-cost loan and restricting the amount they can charge for late fees to 4%. HOEPA was modified in 2013, and some of its new rules only apply to loans after January 10, 2014.
Florida’s Unfair and Deceptive Practices Act, Fla. Stat § 501 et seq., was enacted to protect consumers from unfair and deceptive acts by businesses. It also increases penalties on a business if the victim is older. Generally, there must be a representation, practice, or other behavior that is likely to mislead a consumer, Rollins Inc., v Butland, 951 So.2d 860 (Fla. 2nd
DCA 2006), and that representation, practice or other behavior must have an effect the consumer’s decision.
The Truth in Lending Act (TILA), 12 CFR 226.01 et seq., requires loan originators to provide debtors with accurate information in order to allow consumers to make informed and educated decisions about their loans. TILA requires the creditor to disclose an itemization of the amount financed, the annual percentage rate, the payment schedule, a disclosure of whether or not a penalty will apply to any prepayment, and many more disclosures. See 12 CFR 226.18. TILA also gives right of rescission to consumers for certain loans in which the creditor acquires a security interest in the debtor’s principal dwelling. This right does not apply to residential mortgages, but does apply to other transactions like home equity loans, credit sales secured by the debtor’s home, and home improvement loans are a few of the transactions in which debtors are given the right of rescission. This right of rescission is absolute for 3 days, but it may be extended for up to 3 years if the creditor fails to make certain disclosures. See 12 CFR 226.23.
Homeowners served with a complaint for foreclosure have several defenses available to them provided by state and federal statutes. Lenders must comply with many statutory requirements in order to foreclose on a home, and a Lender’s non-compliance with a statutory requirement may preclude them from foreclosing on a home or leave them liable for damages. Here are a few of the statutes regulating mortgages and other loans secured by a home. Options exist for mortgagors threatened with foreclosure, and even if none of the statutory defenses are available to you, there are many other defenses available to ensure you have the best chance of defending your home.
When Should A Homeowner Facing Foreclosure File Bankruptcy?
After filing bankruptcy, debtors are given an automatic stay from creditors attempting to collect on outstanding debts. Creditors can contest the automatic stay by filing a relief from the stay. Debtors may find defenses to the creditors’ attempts to circumvent the stay in consumer law defenses. To determine what defenses are available, debtors should engage in discovery to fully evaluate their choices. State and federal law provide many defenses, and these should be carefully examined. TILA, HOEPA, and Florida’s Unfair and Deceptive Practices Act should all be consulted for possible defenses available.
Some times a home owner has no option but to sell the home. In this situation, a homeowner wants to maximize the value he can sell the home and that occurs in private sales, rather than foreclosure sales and attempt to maximize the amount of equity preserved. Both ch. 7 and Ch. 13 offers ways to extend the length of time you have to make a private sale of the home in order to maximize equity retained though Ch.7 delays are generally more limited. One issue that arises when trying to sell a home while in Bankruptcy is the interests of the creditors. The creditors’ interest must be fully evaluated before the Trustee will sign off on any plan to sell the home.
The Bankruptcy code gives debtors the right to avoid any judicial lien that impairs one of the debtor’s exemptions established under Florida or federal law. This ability to avoid judicial liens can allow a debtor to have property returned to them that was removed from them because of the lien. However, judicial liens are only avoidable to the extent the lien impairs the exemption. Lien avoidance does not occur automatically, like the automatic stay provision discussed above. The debtor must file the lien avoidance filings to in order to avoid the judicial liens.
A strip down to the value is when a lien may be avoided to the amount it exceeds the value of its collateral. This is an option if the mortgage is not secured only by the debtor’s home, when the mortgage is unsecured because the property has lost all its value, or if the last mortgage payment is due while involved in a chapter 13 plan. Strip downs are a useful tool to avoid foreclosures because they lower, or eliminate part of the mortgage, creating a smaller balance owed on the home.
Ch. 13 bankruptcies may propose to cure a default by paying installments over a period of time, with the installments including any arrears which might have accrued pre- or post-bankruptcy filing. A mortgage default can be cured under Ch.13 until a valid foreclosure sale is completed. Ch.13 may be an appropriate tool to save your home, if your home is in default and you want to keep it.
Bankruptcy offers many protections to debtors that are facing foreclosure. Most individuals consider filing either a chapter 7, or a chapter 13 bankruptcy. Both of these forms of bankruptcy offer an automatic stay. Filing bankruptcy automatically stops (stays) a foreclosure action from proceeding any further and it may offer the debtor opportunities to modify the terms of their mortgage to get a smaller monthly payment or a reduced interest rate. Before deciding to file a bankruptcy to stave off foreclosure, a debtor should examine these issues to decide whether it is the best decision for their situation.