By: Justin C. Carlin
There is, unfortunately, a lot of misinformation among the public regarding mortgage foreclosure cases. As an attorney who has both prosecuted and defended mortgage foreclosure cases, I believe that those holding misconceptions about foreclosures can usually be placed into two groups—those who believe that there are virtually no defenses to a mortgage foreclosure case, and those who (for whatever strange reason) believe that they are unlikely to lose a foreclosure case (despite having not paid their mortgage for months) and, therefore, underestimate a lender’s ability to foreclose. In reality, banks and lenders rightfully win the overwhelming majority of mortgage foreclosure cases, but there are occasionally times when the borrower should (and does) win a foreclosure action.
By far, the most common defense to a foreclosure action is a lender’s purported lack of standing—i.e., the claim that the lender is not the party entitled to bring the foreclosure lawsuit. (An example of standing in the non-foreclosure context: A (but only A) is injured in a car accident caused by B‘s negligence. A would be legally permitted to bring a lawsuit against B, but C could not, because he has not suffered any injury as a result of B‘s negligence. An exception might exist if there was an assignment, by which A, for value or for some other reason, transferred his claim against B to C.) Standing is a legal defense that is often frivolously asserted in a mortgage foreclosure case, but it is occasionally (more often than some would expect) validly asserted. The legal principle not only prevents a borrower from potentially being sued twice on the same debt obligation, but it also prevents an entity that is not owed funds from a homeowner from forcing the sale of the homeowner’s property in satisfaction of a debt owed to someone else. READ MORE