Have you received notice of foreclosure on your home? This can be scary, to say the least. You should not, however, lose hope. First and foremost, not all foreclosure actions are legally sound. Many foreclosure actions can be challenged as wrongful. This is, in large part, because there are extremely detailed and precise requirements that must be met for a foreclosure action to be properly brought. Here, we will go over some of the ways that you can challenge a wrongful foreclosure.
Grounds for Challenging a Wrongful Foreclosure
As previously stated, there are extensive and specific requirements that must be met, much of which are procedural in nature, in order for a foreclosure action to be legally sound. Failure to comply with procedural requirements can be a strong strategy for challenging a wrongful foreclosure. Should a loan servicer or lender fail to follow procedural requirements of a foreclosure action, the borrower may be able to have the process reset so that the servicer or lender will have to start all over again.
A foreclosure action is a high-stakes action. This is because someone is at risk of losing a home. Due to the high stakes, courts are very serious about foreclosure actions and are strict in enforcing all of the requirements for a foreclosure action to be proper. This means that a servicer or lender must comply with state law, federal law, and the terms of the mortgage or deed of trust. Failure to do so may result in the termination of the foreclosure proceedings.
Let’s take a look at some of the things that servicers and lenders are required to do, and which items could result in a challenge to wrongful foreclosure if lenders fail to complete them:
- Meet state-required pre-foreclosure loss mitigation measures: Many states have laws in place requiring servicers and lenders to inform homeowners of mediation options as well as providing contact information so that the homeowner is able to explore options that would help avoid foreclosure proceedings. Furthermore, there are sometimes requirements that homeowners be referred to housing counseling agencies and legal services programs that can assist them in avoiding foreclosure on their home.
- Comply with state law notice requirements: While there are slight variations across state lines, most states remain consistent in requiring loan servicers or lenders to provide borrowers with sufficient and timely notice of a foreclosure action. More specific requirements will depend on state law as well as whether a judicial or nonjudicial foreclosure action is being filed. It is likely that certain documents will be required to be filed with the local land records office as well as serving notice of a foreclosure sale on the borrower.
- Comply with federal mortgage servicing laws: In addition to state-level requirements, there are also federal laws that requiring lenders and servicers to take specific steps prior to foreclosure. These laws are intended to protect homeowners when it comes to foreclosure proceedings. Federal laws generally require the lender or servicer to get in touch with the borrower in order to evaluate ways that the borrower could avoid foreclosure. Furthermore, the lender or servicer should inform you of your options in writing as well as assign personnel to assist the homeowner in foreclosure avoidance. The lender or servicer is also required to wait until the borrower is over 120 past due on loan payments before initiating a foreclosure action.
Jonesboro Wrongful Foreclosure Attorney
Are you facing foreclosure? Do not go through this alone. The Law Office of Bryce Cook is here for you. Contact the Law Offices of Bryce Cook today.