Once homeowners defending their home against foreclosure in court have received additional time by filing a Motion for Extension for Time, the next step is to begin researching their options for the actual defense. But if the bank has committed certain errors in attempting to establish their ability to sue at all, borrowers should hold off on filing their answer until a Motion to Dismiss is decided upon by the judge in the case.
However, there are only a handful of strong reasons for filing a Motion to Dismiss which can stop foreclosure before the the merits of case are even seriously considered. These defenses have much to do with the legal ability of the bank to sue the borrowers in the first place, or its inability to follow the necessary foreclosure laws and comply with notice requirements. But these can often be the most tricky requirements to meet, and any failure can be used against the bank to throw the lawsuit out of court.
Especially if the homeowners know that their loan has been sold around to various lenders and servicing companies, they should contest who actually owns the mortgage at the time of the foreclosure. Banks may be unable to show an assignment of the loan from one company to the next, especially if the lawsuit is being pursued by a large lender or servicer.
One clear indication of this deficiency is if the bank does not attach the note or mortgage to the complaint, either attaching a copy or admitting it does not have possession of the note. It is difficult to establish that a contract has been breached between two parties if the party suing for breach of contract can not even produce the original contract. This is the problem banks run into when they attempt to foreclose on a home but have not done the homework necessary to establish their ownership of that mortgage.
Also, if the borrowers have reason to suspect that the bank did not follow the state and county foreclosure laws dictating how notice of the foreclosure lawsuit must be given, a Motion to Dismiss for Insufficiency of Process may be filed in lieu of an answer to the complaint. Obviously, if the lender has not even fully complied with the requirements to bring a lawsuit in the first place, there is little worth defending, and the homeowners may be able to have the suit thrown out.
The bank will have to restart the foreclosure process all over again, but having the case thrown out the first time will give borrowers extra time to find alternative solutions to foreclosure. Having filed a successful Motion to Dismiss because of the bank’s attorneys’ mistakes in filing the suit to begin with will also drive up the costs of the foreclosure altogether and may help persuade the mortgage company to come to the negotiating table with a reasonable offer.
Possibly the best aspect of the Motion to Dismiss is that it will drag out the foreclosure for another few weeks at the most and potentially over a month or more. The courts have stated that defendants do not have to file an answer to the complaint until a Motion to Dismiss has been ruled upon. When borrowers file an extension for time, followed by a Motion to Dismiss, the bank’s attempts to take the home quickly are put on hold. Although this may cost the homeowner more in the long run in interest and late fees, it also provides a much needed opportunity to look into other defenses or methods to save the home.
For the last few years, the mortgage industry has entered a state of disrepair, with hundreds of lenders going out of business, mortgage securitization firms filing bankruptcy or entering mergers or receiving federal bailouts, and even the nations two largest mortgage buyers, Fannie Mae and Freddie Mac, being nationalized. With all of this going on in addition to an alarming foreclosure crisis, banks may have a difficult time proving they can even sue families for foreclosure. But unless the owners try to have these lawsuits dismissed before they can be ruled upon, banks will continue to be able to steal homes.
Defending a Foreclosure
Step 1: Figure Out What You Want
Step 2: Play By The Rules
Step 3: Get More Time
Step 4: Research Your Options
Step 5: Who Owns the Loan and TILA
Step 6: Have the Lawsuit Dismissed
Step 7: Answer the Complaint
Step 8: The Discovery Process
Step 9: Summary Judgment
Step 10: Go to Trial
Step 11: Lose, Win, or Appeal