Legal defenses to foreclosure?

• The "Truth in Lending Act" violations enabling rescission.(TILA) If your homeloan happens to be a refinance, the mortgage holder or the bank always provides a set of disclosures at the time of the loan closing. If any of these disclosures are not correct, the loan is legally rescindable according to TILA. An example would be in a foreclosure litigation, the finance charge must be accurate within $35 or the loan may be rescindable. This means that the loan is cancelled and all money paid to the lender or bank is refunded.
• The "Truth in Lending Act" violations enabling damages(TILA). In the case that you bought the property with the loan or if you used the proceeds to refinance and proper and legal disclosures were not given to you, then you may be awarded money damages to offset and stop the foreclosure.
• The "Home Ownership and Equity Protection Act" (HOEPA). The HOEPA is a very clear and powerful federal law that controls high cost refinance loans. In the case that the loan is below $150,000.00 or the original interest rate was above 8%, you need to evaluate your loan documents for violations of the HOEPA. Violations of this act would enable rescission and high money damages that could be in excess of the dollar amount of the loan.
• The Failure to Provide a "Correct Notice" of the "Right to Rescind".The correct notice that must be provided to customers that have refinanced at closing. If this form is not correct or acccurate, the loan is legally rescindable for as long as three years after the loan closing date.
• A "Breach of Contract". Much of the time the lender or bank will do certain things that are unfair or unjustified before they start the foreclosure process. Just as you have an obligation to pay the mortgage, the lender or bank has a legal responsibility not to interfere with your ability to do so – such as force placing insurance making the payments much higher than they should have been.
• The "Real Estate Settlement Procedures Act". This is a federal law that polices many types of disclosures that banks and lenders legally have to provide at the time of closing, I is also in place to prohibit things like kickbacks and unearned fees. It allows damages, and often times rescission if the error causes a TILA.
• The "Fair Debt Collection Practices Act". This is a federal law that requires banks and lenders who have obtained the mortgage after default must follow specific guidelines when they attempt to collect on the debt. Failure to abide by this law allows for statutory damages and legal representation fees.
• The "Fair Credit Reporting Act". This federal law governs lenders ability to report information about the mortgage and requires the accurate reporting of negative information. Violations of this act also enables damages and attorney’s fees. Punitive damages might be available under this act.
• The "Real party in interest". This is a defense procedure to foreclosure that will be very effective at stopping the bank's or lender’s ability to foreclose on the loan. It simply questions the ownership of your mortgage and also questions whether the foreclosing party is, in fact, the true holder of your mortgage and note.
• "Unconscionability". This type of defense brings an investigation as to the events surrounding the creation and the closing of the mortgage loan. If there is a violation here it gives the court a great deal of leeway in thier decision as to whether the mortgage should be voided or changed in any way.
• The "Failure to state a claim" upon which relief can be granted. This is a general defense that brings into focus, the lender’s ability to continue with foreclosure and it can be used in conjunction with any other foreclosure defenses.
• The "Failure to establish conditions" precedent. If you want to have a foreclosure thrown out of court right away? Use this legal defense that brings investigation to the lender’s pre-foreclosure processes, to ensure they did everything correctly and by the law.
• The Failure to comply with "FHA pre-foreclosure requirements". The FHA ( Fair Housing Act) requires that every lender mail written information called “How to Avoid Foreclosure” and conduct a face-to-face meeting with the borrower before foreclosing (in most cases). If the lender or bank has not taken these steps, then they cannot foreclose.

Note: this article is for informational purposes only and not intended to provide legal advice.  Only your Attorney can advise you on the most up to date and relevant laws for your circumstances.  To find a qualified Attorney in your area, visit www.findlaw.com