When a lender obtains a termination of the mortgagor's equitable right of redemption, the borrowers file a defense to fight against the lender's action. The strategy adopted by the borrower in order to defend the foreclosure action of lender is termed as foreclosure defense. There are many steps that a lender can take to avoid the bankruptcy. Mortgage modification, short sale and deed in lieu are some of the options for the lender. However, the borrower might indulge in a proactive legal action against the lender. Some of the common tools for such a legal battle are production of mortgage note, which is a documented proof of a debt which describes the terms of debt repay. Predatory lending is another tactics that lenders adopt, which uses unfair lending practise and advertising lower than actual interest rates. This helps the lender to gain profit from foreclosure on the collateral. Truth in Lending Act (TILA) of 1968 also helps a borrower to get informed about the usage of consumer credit. TILA violations and rescission leads to voiding the party contracts. A borrower may cancel the transactions involving lien on principle dwellings, in order to defend the foreclosure.
In some cases, the properties are sold and resold multiple number of times, converted into securities, and in the process, the original mortgage note is lost. Non-existence of document can lead to delay the foreclosures. This also makes a good case to re-negotiate the mortgages. In most of the cases the owner extends its stay in the property until they are financially capable to defend the foreclosure.
Foreclosure auction or bankruptcy is the last option that a lender has to make the payments. However, this selectively reduces the credit rating of the lender and affects his/her future financial endeavours. Besides, bankruptcy and auction is a tedious process, with a lot of document collection, discovery and litigation preparation involved. The bankruptcy laws are tedious and federal. This whole complexity works in the favour of a borrower and defends him/her in foreclosure cases.
Anthony Carroll - The Law Offices of ALG and Associates
In some cases, the properties are sold and resold multiple number of times, converted into securities, and in the process, the original mortgage note is lost. Non-existence of document can lead to delay the foreclosures. This also makes a good case to re-negotiate the mortgages. In most of the cases the owner extends its stay in the property until they are financially capable to defend the foreclosure.
Foreclosure auction or bankruptcy is the last option that a lender has to make the payments. However, this selectively reduces the credit rating of the lender and affects his/her future financial endeavours. Besides, bankruptcy and auction is a tedious process, with a lot of document collection, discovery and litigation preparation involved. The bankruptcy laws are tedious and federal. This whole complexity works in the favour of a borrower and defends him/her in foreclosure cases.
Anthony Carroll - The Law Offices of ALG and Associates