Due to the widespread problem of predatory lending, many lenders overreach. In a large number of mortgage foreclosures, the borrower has a valid, legal defense. Sometimes lenders violate federal laws, such as the Truth in Lending Act, or Pennsylvania laws such as Act 6 and/or Act 91. Additionally, there could be defects in your mortgage documents that may make your lender unable to foreclose, or can limit their recovery. These substantial or procedural defects, if properly raised as defenses, can be of a substantial benefit in delaying or stopping a mortgage foreclosure.
Foreclosure Defense FAQ
I am a couple of months behind on my mortgage payments. Am I in danger of losing my home?
Generally, if you have not been served with a Complaint in Mortgage Foreclosure, you have numerous options to preserve your home. Communication at this point is key with your lender. Often, people are afraid or ashamed to communicate with a lender, and this is understandable. Unlike most other assets, your residence is very personal. We can help you at this stage increase communication and resolve your issues before litigation commences. Options at this point if you want to stay in your home include a forbearance plan or a loan modification. If you do not want to stay in your home, we can possibly negotiate a deed-in-lieu of foreclosure as well as a cash benefit to you to help with moving expenses.
Remember, the bank cares about how much money they make, and limiting their legal expenses. If you get an attorney involved in your case early, you signal to the lender that you will fight them in the event that they commence litigation. As a result, they may be more reluctant to foreclose and be more willing to get you a deal which may bring your loan current, lower your interest rate, lower your monthly payment, forebear payments, or a combination of some or all of the above.
The sheriff served me with a Complaint in Mortgage Foreclosure. What do I do now?
At this point, it is imperative that you contact an attorney immediately, whether us or another attorney who works with defending mortgage foreclosure cases. Pennsylvania Rules of Civil Procedure state that you have 20 days to respond to a complaint after service. Failure to respond will likely result in a default judgment filed against you. The bank is hoping you don’t respond, so they can foreclose on you without opposition.
If you hire us, in the event that you are served with a Complaint in Mortgage Foreclosure, we will either file Preliminary Objections or an Answer. Preliminary Objections are used to object to some aspect of the Complaint in Mortgage Foreclosure. Common objections are objection to the method of service, the venue in which the case was filed in, or that the lender did not follow some of the pre-foreclosure requirements in Act 6/91 or other state and federal laws. If we raise a Preliminary Objection, there will usually be a response from the lender, and a hearing on the issue. Sometimes the lender may withdraw the entire action at this point, or serve you with an amended complaint, and this gives you the possibility of a new round of Preliminary Objections.
If we file an Answer, we respond to the Complaint in Mortgage Foreclosure and present your defenses to the bank’s case. We often file a wide range of defenses at the outset, and, if the case proceeds, hone in on the best defenses. The defenses that are most helpful will vary from case to case and will be discussed in length with you as part of normal client communication.
By filing an Answer and/or Preliminary Objections, and proceeding with litigating your case, two things are usually immediately achieved. First, the amount of time you have in your home is going to increase, as the bank will not be able to quickly get a default judgment against you. Secondly, the bank now knows this will likely be an expensive fight on their end that they may not want to continue, and may be more willing to resolve the case.
What happens after the Answer is filed?
Generally, we will proceed to continue litigating your case by demanding discovery, and by filing motions to prepare for a potential trial. This process can take anywhere from several months to several years depending on your case. Additionally, we will continue to try to settle the case by negotiating directly with the lender’s attorney, usually with the goal to resolve the case before trial and before the foreclosure case reaches a point where you may be forced to leave your home. The goal may be a loan modification, a forbearance agreement, a deed-in-lieu of foreclosure, or to litigate the case to trial.
I did not respond to the Complaint in Mortgage Foreclosure and there was a default judgment filed against me, and now the sheriff has scheduled a sale. What do I do now?
Your options are more limited because you did not respond quickly enough, but we can still help. We would likely need to file a Motion to Vacate the judgment. In order to succeed, we would have to convince the court that you had a valid reason why you did not respond in the time allowed under the Pennsylvania Rules of Civil Procedure. Our success on such a motion would depend on a number of factors unique to your case. Additionally, we can file petitions to delay the sheriff sale.
What legal fees do you charge for mortgage foreclosure defense cases?
Unlike many other attorneys, we do not charge large up-front retainers to defend mortgage foreclosure cases. We understand that homeowners facing mortgage foreclosure usually have financial problems and cannot afford a lump sum up-front retainer. Instead, we charge a monthly fee that is tied to your monthly principal and interest payment, with usually 3 months payable up front. You pay us each month until the case is resolved. If your legal fees are paid on time, you will likely have a refund due to you at the end of representation that can be used to pay a downpayment on a loan modification if you choose that option.