Top 5 Foreclosure Defenses to Consider
If your mortgage company forecloses, you may have defenses. Virginia is a non-judicial foreclosure jurisdiction, which means you must sue the mortgage company to raise these defenses. Here are the Top 5 Foreclosure Defenses in Virginia.
Calculation Errors
If your lender fails to credit payments that you have made then perhaps you should not be in foreclosure at all. A lender’s miscalculation of amounts owed can give rise to foreclosure defense. This applies to principal balances, escrow balance, payoff, and reinstatement figures. Unfortunately, this happens more often than one would expect, and this is the most common foreclosure defense.
Notice Requirements
If your lender attempts to foreclose against your primary residence and you do not receive notice, that can give rise to foreclosure defense. Lenders per jurisdiction must provide differing degrees of notice of foreclosure, but all must provide a notice of intent to accelerate. After all, it should not come as a surprise to you that your home has been scheduled for a foreclosure auction.
Truth in Lending Violations
TILA, or the Truth in Lending Act, requires accurate and fair loan origination and billing practices. Today, all large institutional lenders comply with TILA. Local mortgage lenders, however, may fail to meet TILA standards for loan origination disclosures. In those cases, the homeowner may be able to rescind the loan.
Show the Note
This defense challenges the lender’s ownership of the mortgage loan. Lenders often transfer (or “assign”) loans to different lenders. Nowadays the so-called “show the note” defense carries less weight these days. That’s because lenders have cleaned up their documentation, which had gotten sloppy during the days leading up to the financial crisis. In most cases, lenders today can prove ownership.
Predatory lending
Like the “show the note” defense, predatory lending is less common lately. Most of the predatory loans that originated during the mortgage bubble have either already foreclosed or are too old to be considered predatory at this point. Still, in some cases, a defense of predatory lending can be raised. This is especially true in cases where the borrower belongs to a protected class.
Sort through your foreclosure defenses
If you are facing foreclosure, you should look for an experienced foreclosure defense team to help you determine your best options.
How Do I Stop Foreclosure?
There are several ways to halt a foreclosure. The best way is, of course, by agreement with the lender who agrees to modify the loan or provide more time to bring the payments current. Generally, agreements such as this are reached before the property goes into foreclosure. Once the property is in foreclosure, even if the lender is telling you that they are processing your loan modification, the likelihood of a successful modification is extremely low. Additionally, many unfortunate homeowners have lost their homes by waiting until the clock ran out only to have the lender tell them the day prior to the sale that the modification has been denied. Do not wait and waste your time.
A sure fire way of halting a foreclosure sale is also to file bankruptcy, whether it is a Chapter 7 or a Chapter 13. A Chapter 13 bankruptcy can help you stop the sale, reorganize the amount you are behind and set up a payment plan to catch the property up. It will also help restructure your other debt to improve your cash flow.