Tips For Contesting Non-Judicial Foreclosures in Court

Homeowners who are facing a non-judicial foreclosure will need to pursue action against their mortgage lender in order to stop the foreclosure process. Every homeowner has a legal right to contest their foreclosure in court, although this is not standard procedure in non-judicial foreclosure states. The process may seem overwhelming, but it may be the only way to save your home if you have defaulted on the loan.

File the Lawsuit against the Lender Quickly

In a non-judicial foreclosure state, the court system is not involved in the foreclosure process. It is up to you to file suit against the lender as soon as you are aware of the pending foreclosure. Without the assistance of the courts, foreclosures will occur quickly, which decreases the time that homeowners have to react to the news. Lenders in some non-judicial foreclosure states are able to complete the entire process in 15 to 30 days.

Gather Your Documentation

Compile all of the information you have regarding your dealings with the lender. This includes voicemails and phone calls. You should document who you spoke with, what was said, and the date and time of the calls. All written correspondence should be available including emails and any letters that you received with their corresponding envelopes showing the postal date stamps. 

Request a Temporary Restraining Order

File the requisite form requesting a TRO, or temporary restraining order, and a preliminary injunction when you file the lawsuit. These requests will stop the lender from moving forward with the non-judicial foreclosure and the sale of your home until the courts have decided the outcome of the case.

Use the Proof of Mortgage Ownership Defense

It is normal for mortgages to be sold from one lender to another, and some lenders sell mortgages to Wall Street investment firms where they are divided into packages and resold as securitized debt. Because of these types of transactions, there is a chance that your lender no longer owns your mortgage. This disqualifies them from being able to foreclose on your home. Your lawsuit will require the lender to prove to the courts that they own your mortgage. 

Mortgage Servicing Companies and Foreclosures

Mortgage servicing companies are usually not the owner of your loan. They are simply providing services for the loan by taking your payments each month and crediting your account accordingly. In almost 40 percent of the contested foreclosures brought about by servicing companies in 2007, the servicing companies were unable to provide the paper trail needed to tie the mortgage to the current lender. 

Consult a Foreclosure Defense Attorney

It may be a daunting task to file a lawsuit against your lender in the hopes of saving your home. You will increase your chances of success in court by hiring a professional and experienced foreclosure defense attorney. If you do not have the funds to hire an attorney, contact a local legal-aid organization to see if you qualify under their program guidelines. These organizations provide attorney services at a reduced rate.