How do I Fight a Foreclosure Lawsuit?

In many countries, including the United States, most residential and commercial property purchases are accomplished by the buyer securing a loan, or a mortgage, for at least some of the purchase price of the property. The purchaser is then responsible for making regular monthly payments on the loan until it is paid in full. When a purchaser gets behind on the payments, or is in default, the bank or lender may initiate a foreclosure lawsuit to regain legal title to the property. When this happens, there are a number of actions that the purchaser may take in order to attempt to fight the foreclosure lawsuit, including contacting the lender or bank and trying to work out payments arrangements, retaining the services of a real estate attorney, or filing for bankruptcy protection.

The easiest way to try to fend off a foreclosure lawsuit is to contact the bank or lender that holds the mortgage note and try to work out acceptable payment arrangements to bring the loan current. Contrary to what many people may think, a bank or lender rarely wants to foreclose on a property. The cost and time involved in a foreclosure lawsuit is rarely in the best interest of a bank or lender. In many cases, if the borrower explains his or her financial situation and makes an effort to bring the payments current, the bank or lender will make every effort to work with him or her to avoid foreclosure.

If the foreclosure lawsuit has already been filed and efforts to work with the bank or lender have been unsuccessful, then a borrower may wish to retain the services of a real estate lawyer who can review all the documents to see if the foreclosure documents were prepared and filed according to the laws of the jurisdiction where it was filed. The laws regarding foreclosure proceedings will vary from one jurisdiction to the next, but each jurisdiction requires specific rules and notice requirements to be followed in order for a foreclosure to be legal. If the bank or lender has failed to follow the appropriate procedures, then the foreclosure lawsuit may be dismissed. An attorney who specializes in real estate law should be able to look over the paperwork and determine if the borrower has any legal recourse to fight the foreclosure.

As a last resort, a borrower may wish to seek bankruptcy protection. When a bankruptcy petition is filed in the United States, an automatic stay is immediately issued ordering all collection efforts on debts owed by the debtors to stop, including foreclosure proceedings. Bankruptcy protection is only a stop gap, however, as the bank or lender may ask that the stay be lifted after a short time. If the borrower believes that he or she can catch up the payments and make future payments, then the protection afforded by the bankruptcy petition may give him or her the time needed to straighten out his or her finances.