Regardless of whether you file Chapter 7 or Chapter 13 bankruptcy, you will still need a foreclosure defense. Filing for bankruptcy gives you room to breathe by putting a stay on the foreclosure of your primary residence, but you’re still responsible for any delinquent payments.
As Florida is a judicial foreclosure state, the bank has to receive court approval before they can foreclose on a home. This gives rise to various defenses you can employ to make sure that doesn’t happen. While this is not an exhaustive list, and they don’t apply to every case, here are a few defenses that have proved effective in the past.
Lack of Standing
If a bank cannot establish that they have standing (the right to bring a lawsuit), the court may rule against a foreclosure. To have standing the lender must show the original documentation or promissory note. While it may seem like it would be simple for a bank to provide the necessary evidence, in many foreclosure cases, the bank petitioning the court is not the one who first issued the mortgage.
Banks often sell mortgages to other financial institutions. During these sales, it is not uncommon for the promissory notes to go missing, which can raise enough doubt as to the bank’s standing and prevent a foreclosure.
The lender must also notify you within 30 days of the intent to transfer the mortgage. Failure to prove that they did so would allow a court to rule in your favor.
Inadequate Notice of the Default
There is a condition in most mortgages which states that the bank must notify you that they intend to file a lawsuit and give you 30 days to cure any delinquent payments. Once you raise this issue, the burden of proof is on the bank to prove that they provided sufficient notice. If they cannot do so, the court can decide to stop the foreclosure.
Under Florida law, Courts of Equity hear all foreclosure cases in the state. These courts seek to make sure that the law is fair and just. If you can prove that the bank detrimentally affected you through fraudulent, illegal, or oppressive means, the court may prevent the foreclosure.
Failure to Comply with Federal Law
Any institution that services mortgages must process payments in accordance with federal law 12 U.S.C. §2605. If you can successfully prove that the servicer was not in compliance with the law, you can use this violation to petition the court to stop the foreclosure proceedings.
The courts may also deny foreclosure if the lender cannot prove that they have complied with the National Housing Act, which states that the lender must inform you of the various counseling options available from the U.S. Department of Housing and Urban Development. Once raised, the burden of proof lies on the lender to show that they followed the law.
Get Help with Your Foreclosure Defense
At DJS Law Group, we specialize in Tampa bankruptcy law and foreclosure defense. Our team can help identify the best defense for your foreclosure case to ensure you don’t lose your home. Call us today for a free consultation at 888-266-1078.