We are working on a Class Action Lawsuit against Selene Financial, LP and criminal complaints against the alleged Trustees and their Attorneys.
Common Homeowner Defenses in Foreclosure Proceedings
Homeowners facing foreclosure have several potential defenses, which vary by state, whether the foreclosure is judicial (court-based, required in about 20 states like Florida, New York) or non-judicial (out-of-court, common in states like California, Texas). Defenses can delay, halt, or even dismiss a foreclosure, but success depends on specific facts and evidence. Most foreclosures resolve via summary judgment or settlement, and trials are rare. Key Differences in Raising Defenses
- Judicial Foreclosure: The lender sues you; file an answer to the complaint raising defenses and counterclaims.
- Non-Judicial Foreclosure: No automatic court case; you must file a lawsuit to challenge it (e.g., seeking an injunction to stop the sale).
Common Defenses
Here’s a summary of frequently raised defenses, based on legal resources and court practices:
| Defense Category | Description | Examples/Applicability | Effectiveness Notes |
|---|---|---|---|
| Lack of Standing | Lender/servicer can’t prove ownership/entitlement to enforce the note or mortgage. | Chain-of-title issues, improper assignment, or securitization flaws. “Produce the note” was popular post-2008 but is now rarely successful—lenders use copies, affidavits, or MERS. | Strong if documentation gaps exist, but lenders improved records post-crisis. |
| Procedural Violations | Lender failed to follow state/federal rules or loan terms. | Improper notice (e.g., missing 90-day pre-foreclosure notice in NY), wrong service of documents, or skipped steps. | Often delays foreclosure; can lead to dismissal if major (e.g., no default notice). |
| Servicer Errors | Mistakes in accounting or handling payments. | Payments not credited, wrong amount owed, excessive fees, or errors after loan modification. | Common and viable if proven with records. |
| Violation of Loss Mitigation Rules | “Dual tracking”—foreclosing while reviewing modification/forbearance. | Federal rules (e.g., CFPB) prohibit this; state laws may add protections. | Can stop foreclosure until review completes. |
| No Default or Partial Payment | You’re not actually behind, or debt amount is wrong. | Proof of payments made or applied incorrectly. | Strong with bank statements/receipts. |
| Statute of Limitations | Too much time passed since default or acceleration. | Varies by state (e.g., 6 years in NY); must raise affirmatively. | Can dismiss case entirely if applicable. |
| Predatory Lending/Fraud | Loan originated with deception, unfair terms, or violations (e.g., TILA, RESPA). | Misrepresentations, hidden fees, or incompetence at signing. | Harder to prove but can invalidate loan or award damages. |
| Special Protections | Military service, disability, or other status. | Servicemembers Civil Relief Act (stay foreclosure); mental incompetence at signing. | Automatic stays or delays for active duty. |
Additional Options (Not Pure Defenses but Related)
- Reinstatement: Pay arrears + fees to cure default (right in most states, often up to sale).
- Redemption: Pay full debt post-sale (available in some states).
- Bankruptcy: Automatic stay halts foreclosure (Chapter 13 allows repayment plan).
- Loan Modification/Forbearance: Negotiate with servicer; HUD-approved counselors can help (free via hud.gov).
Defenses rarely “win” permanently without addressing the underlying debt; they often buy time for negotiation or alternatives like short sale/deed-in-lieu. “Produce the note” or broad constitutional claims (e.g., no jury right) generally fail in modern courts. If facing foreclosure, act quickly—deadlines are strict. Consult a local foreclosure attorney (many offer free consultations via legal aid or state bar) or a HUD-approved housing counselor (find at hud.gov). Avoid scams promising to “stop foreclosure guaranteed.” Resources: Nolo.com, CFPB.gov, or your state’s attorney general.