The Myths of Foreclosure Defense

In the world of foreclosure defense, many myths exist.  Thanks to the email and the Internet, it’s easy to get the wrong information about this important area of law.  Here are the top three myths about foreclosure defense:

1.  “With all the fraud by big banks and lawsuits against financial institutions, fighting a foreclosure is breeze.”

THE TRUTH:  Foreclosure defense is tricky, technical work.  While there are many stories about fraud in the foreclosure process, proving fraud is tough.  In fact, most successful defenses to foreclosures involve “devil in the detail” arguments, and few about actual fraud.  I have a little doubt that fraud and other shenanigans does occur by foreclosing entities, but successful defenses often require much less obvious—and much more boring—arguments.

2.  “Fighting a foreclosure means I’ll get a free home.”

THE TRUTH:  While it is possible to fight a foreclosure, it is much, much more difficult to fight a mortgage.  In short, while you may be able to beat foreclosure, the mortgage still exists, and the mortgagee can, and almost certainty will, begin a new foreclosure if the existing foreclosure is void. This will take time (2-3 years by my estimate under the current laws).  So, while fighting a foreclosure ensures you more time, it does solve the underlining problem on its own.  Rather, fighting a foreclosure opens the door to a possible settlement with your lender or possible help from state/federal programs aimed at keeping people in their homes.

2.  “Fighting a foreclosure is always the best thing to do when faced with an eviction notice from the bank.”

THE TRUTH:  The decision on whether to fight a foreclosure is not always a legal one.  You should consult a financial adviser who can discuss the financial implications of a foreclosure defense.  While a lawyer can tell you whether the foreclosure can be beat, a financial adviser can discuss with whether such a strategy is in your long-term, financial interest.