Tag: Mortgage Foreclosure Defense

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Standing–A Common Defense to Mortgage Foreclosure

December 15, 2015

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

U.S. Supreme Court Weighs In on Issue Raised in Mortgage Foreclosure Case

January 14, 2015

By: Justin C. Carlin

It’s not often that the United States Supreme Court issues an opinion that has an effect on Florida mortgage foreclosure cases, but that’s exactly what the Court did today when it issued its opinion is Jesinoski v. Countrywide Home Loans, Inc.  The case involved borrowers who rescinded their mortgage documents based on the lender’s failure to make certain disclosures under the federal Truth-in-Lending Act (“TILA”).  After making payments on the mortgage for nearly three years, the borrowers sent notice to the lender of their rescission of the agreement.  The issue in the case was whether the borrowers’ subsequent action for a declaratory judgment (by a court declaring the mortgage rescinded) was time-barred under TILA as having been brought more than four years after the execution of the mortgage.  The Supreme Court found that the action was not time-barred, because the borrowers complied with the applicable limitations agreement set forth in TILA by providing notice of their recession within three years from the execution of the loan documents.

Military Couple in Front of House and Foreclosure For Sale Real Estate Sign.The Jesinoski case is notable, but not just because of its holding.  First, the case illustrates the tremendous protection that TILA affords to Florida consumers. Under Florida law, a contract of any kind (whether a promissory note, a mortgage, or any other kind of contract) may usually not be rescinded after the parties have changed their positions as a result of the contract.  Under TILA, however, a consumer in Florida appears to have the ability to rescind the contract years after the contract is entered into. READ MORE