Foreclosure Defense Lawyers

Arsenal of Defenses

As experienced litigators, Rosen & Rosen has developed an extensive list of potential defenses to either help you keep your home or investment or help you keep it longer.

1. Standing - One of the most critical, successful and multi-faceted defenses in defending a foreclosure as a result of today’s secondary mortgage market and securitization process.  These issues are all addressed with defenses crafted by the Uniform Commercial Code:  Negotiable Instruments (Florida Statutes Ch. 673) along with Assignments and Transfers of Mortgages (Fl. Stat. 701), Florida Evidence Code (Fl. Stat. Ch 90) and the Florida Rules of Civil Procedure.
   1. Transfer Issues Generally – Some of the issues that arise regarding standing, include improper assignments of the mortgage or transfers of the note, banks that have gone out of business such that they cannot repair an improper assignment or transfer, loss of the original note or mortgage and inability to prove up the elements needed to reestablish either one.  Some lenders and attorneys for the lenders have been caught red handed attempted to back date and/or forge assignments.
   2. Securitization – Usually shortly after most mortgage loans are made, they are bought and sold on a “secondary” market.  A great majority of these loans are bundled and packaged into trusts.   These trusts are then sold to investors in pieces, known as Mortgage Backed Securities (MBS).  Our securitization chart should clearly demonstrate for you just how complicated this process is.  There are various entities and agreements which detail exactly how each mortgage and note makes its way from the closing table to the trust.  By their own agreements, any loan which does not follow the proper process cannot be part of the trust for several reasons including major tax implications.  There is even a very strict timeline for how long mortgages and notes can be acquired by the trust after its formation.  Therefore, if a trust is a Plaintiff or if someone else like a servicer is the suing on behalf of a trust, there are a myriad of steps these entities must have followed to be able to prove their ownership and entitlement to foreclose.  We tear through each of these details when we defend our clients in foreclosure and there is a wealth of great defenses found in these types of cases.
   3. MERS, Inc. – Another unique standing issue is the Mortgage Electronic Registration Service, Inc.  MERS claims to be a central repository for mortgage information, sort of like a database of mortgages so anyone wanting to look up information on a mortgage can go on their system to find out information about it.   However, not everyone uses MERS, nor was it even mandatory to their “members” to use it.  Very often MERS is named on the mortgage as the entity receiving mortgage as a “nominee” of the actual lender.  Those are referred to as MOM mortgages or MERS as Original Mortgagee.  There can be issues with the agreement, if any, between the lender and MERS giving them the authority to enter into mortgages on a lender.  And if issues exist there, further complications can arise in any subsequent assignments of the mortgage that were initiated by MERS.  Moreover, we frequently see MERS assigning mortgages days before a foreclosure action is brought on behalf of an original lender/corporation that is either bankrupt or completely out of business.   Those assignments are impossible and fraudulent and provide outstanding defenses and leverage.
2. Service of Process – In order to successfully initiate a foreclosure lawsuit, a lender must meet certain strict guidelines regarding how to “serve” the lawsuit on an individual or that service will be “quashed.”  Under Rule 1.070 of Florida’s Rules of Civil Procedure, the complaint must be served with a summons and within 120 days of the initial lawsuit being filed with the court.  Also, the process server must provide you with all copies and must put the date and hour of service on the originals and the copies.  Florida statute 48.031(5) also requires the process server to put his identification number and initials on the copies you receive.  As per, Florida Statute 48.031, there are rules which apply to how you can be served at your house, at your place of work, at a private mailbox you own, or even by serving your spouse.  There are many potential issues regarding proper service, including under Florida Statute 48.20, if you are served on a Sunday; that service is void and you may be entitled to damages!
3. Failure to File a Cost Bond – Under Florida Statutes 57.011, a nonresident corporation must post a $100 bond in order to cover costs that a defendant may incur in defending the lawsuit, in the event the defendant prevails.  The bond must be filed within 30 days of filing a lawsuit and a defendant must give the plaintiff 20 days notice before moving to either dismiss the case or hold the bank’s attorney liable for all costs incurred in defending the case.
4. Defects with the Complaint – There can be many defenses just based on the form or issues “plead” in the initial complaint.  For example, under Florida Rules of Civil Procedure 1.130, the mortgage and note must be attached to the complaint.  Also, standing must be shown on the “four corners” of the complaint and its attachments.  So if the plaintiff alleges it owns and holds the note and mortgage, yet attaches a note and mortgage showing someone else as the lender with no endorsement or assignment to the Plaintiff, that complaint “fails to state a cause of action.”  On February 11, 2010, Florida Rule of Civil Procedure 1.110 was amended to require the entity bringing the foreclosure lawsuit to sign off on the complaint with the following language: “Under penalty of perjury, I declare that I have read the foregoing, and the facts alleged therein are true and correct to the best of my knowledge and belief.”  A bank’s failure to comply with any of the above requirements can result in their lawsuit being dismissed.
5. Failure to Fulfill all “Conditions Precedent” – Entities seeking to foreclose banks must allege and prove that all of the “conditions precedent” to filing a foreclosure suit have been met.  The most common example of this is, under your mortgage, you must have been provided with a written “acceleration” notice prior to filing the lawsuit.  Without this document an bank or other entity cannot foreclose on your home!
6. Amount of Debt in Dispute – The banks, among other things have to prove the exact amount of the debt.  Because of failure to credit the borrower for past payments and/or math, accounting and/or software errors, there can be a lot of mistakes and miscalculations.  We force the bank to prove their case to the penny.This is also one of the areas where the now infamous “robo-signing” or “robo-signer” controversy has come to light.  In order for the bank to prove, among other things, what is due and owing, they use affidavits.  An affidavit is a formal statement, swearing that the person signing has personal knowledge of the statements made and that those statements are true and correct.  They are required to be notarized, which means an official licensed by the state must observe the party signing and must either know the signer personally or be given valid proof of the signer’s identification.There have been numerous cases around the country in which it has become proven fact that banks, their supporting companies, and even at times their lawyers, have had individuals signing affidavits, which contained information, of which the signer had absolutely no personal knowledge.  These individuals sign thousands of documents in a month, allow others to sign on their behalf or have no idea that others are forging their name.  Also, notary signatures and stamps have been improperly affixed outside the presence of the signer, without proper identification, by notaries whose “commission” has expired and/or fraudulently forged and signed by someone else.  Across the country some of these culprits have set up assembly lines to pull of this massive fraud on the court, the borrowers and on our country.  When we find instances of this behavior through detailed discovery, those affidavits are no longer used to prosecute the foreclosure against you. Instead, they become evidence of fraud, which is then used against the bank in your defense.
7. Discovery Practices – Discovery is the legal process in which information is exchanged between parties in a lawsuit. This is accomplished by 1) depositions upon oral examination, 2) deposition upon written questions, 3) written interrogatories, 4) requests for production of documents or things, 5) request for permission to enter upon land or other property for inspection and other purposes, 6) physical and mental examinations, and 7) requests for admissions. Each of these methods can be extremely valuable in helping defend almost every mortgage foreclosure case. They can be used to both uncover the evidence the bank has or doesn’t have to help in disproving the bank’s case as well, each discovery request takes specific amounts of time. Each vague, ambiguous or incomplete response generates more time as we then file a motion to compel the bank for an answer and then wait for a judge’s ruling in order to proceed.
8. Procedural Issues – Florida’s Rules of Civil Procedure detail specific guidelines in which the parties must adhere to in each and every phase, motion, hearing and process.  There are timelines, notices, special forms and many other technicalities which must be followed.  There are multiple possible avenues a lawyer who is proficient in the rules can utilize to help defend a foreclosure suit.
9. Failure to Mitigate – Inherent in any breach of contract case, is the plaintiff’s duty to mitigate their damages.  If the bank unreasonably did something or unreasonably failed to do something that would have reduced its damages; that amount of damages can be offset against the bank’s recovery from the borrower.
10. Bankruptcy – A federally regulated course of action that will stay or stop the foreclosure suit until the pending bankruptcy is resolved.  Also, bankruptcy can be used to discharge certain debts including mortgages on commercial property and a second mortgage on a residence.
11. U.S. Fair Debt Collection Practices Act and Florida’s Consumer Collection Practices Act: State and federal laws govern what can debt collectors and creditors can and cannot do in the process of attempting to collect a debt.  For example, the use of profanity or obscenities, making threats, and calling before 8AM or after 9PM are just a few of the many examples of what cannot be done.  There are state and federal versions of these laws that we’ve outline in great detail on our site.   The statutes allow for actual damages and additional statutory damages of up to $1,000, attorney’s fees and costs, as well as punitive damages, if the conduct warrants it.
12. U.S. Truth In Lending Act (TILA), Regulation Z – The regulation commonly known as “Reg Z” is issued by the Federal Reserve to implement the federal “Truth in Lending Act,” which is title I of the Consumer Credit Protection Act.   The purpose of the act and regulation is to help assure meaningful disclosure of credit terms so that consumers can make informed decisions and be protected from inaccurate and unfair credit billing practices.  The act imposes criminal liability for violations and in some rare instances allows for the consumer to rescind or undo the contract for credit in which the primary residence is used as collateral.  The right of rescission however, does not apply to finance agreements used to purchase or construct a home.
13. U.S. Home Ownership Equity Protection Act (HOEPA) - This act is contained within section 32 of the Truth in Lending Act (TILA).  It covers first liens with higher than 8% interest, second liens with higher than 10% interest or loans with closing fees and points exceeding the larger of $583 or 8% of the total loan value.   These are known as “high cost loans.”  The act requires that the borrower receive certain disclosures at least three days prior to the closing of the loan, in addition to the other disclosures required under TILA.  The act imposes criminal liability for violations and rescission for those loans, except when used to purchase or construct a home, where a home was pledged as collateral.  The act also does not apply to home equity loans or reverse mortgages.
14. Florida Fair Lending Act – Contained in Florida Statutes Ch. 494, this act almost mirrors the language of the HOEPA, requiring timely disclosures and prohibiting certain terms.  However, violations of Florida’s version of the act result in the lender forfeiting the entire interest charged or contracted to be charged or received and leaving only the principal sum of the loan enforceable against the borrower.
15. U.S. Real Estate Settlement Procedures Act – Commonly referred to as RESPA, this body of law mainly attempts to regulate how real estate transactions are closed.  It mandates the use of a detailed closing statement known as a HUD-1 in most residential real estate transactions, prohibits kickbacks or illegal referral fees and attempts to reduce the amount a borrower must place in escrow.  It also authorizes the use of a qualified written request (QWR) to request information from the servicer of your loan regarding the status of your loan and allows for the request of various documents.  The servicer then by law has 30 days to respond if the payments are disputed in the QWR and during this 30 days the servicer may not report any overdue payment to a credit reporting agency.  Violations of RESPA include fines up to $2,000.  Also under the act, a lender must make specific disclosures when referring you to an “affiliated business.”  A lender or lender’s agent’s violation of this specific “affiliated business arrangement” disclosure requirement results in fines of up to $10,000 and/or up to one year in jail.U.S. Fair Debt Collection Practices Act and Florida’s Consumer Collection Practices Act – There are federal and state laws that affect how debt collection can and cannot be handled.  This includes prohibiting threats, using profane or obscene language, posting information to others about the debt, times of the day in which you can be contacted, and many other actions.  This remedy mainly provides for actual damages and additional statutory damages up to $2000, plus attorney’s fees and costs and can be asserted in a counter-claim against the bank in the foreclosure suit or as a separate cause of action.
16. U.S. Home Affordable Modification Program (HAMP) – Requires lenders (those who signed up for the program and/or those who took federal bailout funds under TARP) to modify loans to qualified borrowers in order to reduce the borrowers’ monthly housing payments to 31% of their monthly gross income.  It gives lenders cash incentives in various ways to modify loans and starts the borrowers off, if eligible, on a 90 day trial plan.  HAMP prohibits lenders from instituting a new foreclosure action if a borrower has entered a trial modification plan.  It also forces lenders to stop an existing foreclosure action for borrowers in their trial period until after and if that borrower’s trial modification plan has failed.  Lastly, participating servicers may not proceed with a foreclosure sale on an eligible loan until the homeowner has been evaluated for HAMP, after a trial modification offer has been made, if that borrower is eligible, or until 30 days after a HAMP non-approval notice has been sent.
17. U.S. Home Affordable Foreclosure Alternatives Program (HAFA) – Incentivizes lenders and borrowers (up to $3,000 for “relocation assistance”) via cash payments to enter into either a short sale or deed-in-lieu of foreclosure.  It requires borrowers, if they are approved for one of these transactions, be released from future liability such as a deficiency judgment.  Mandates that short sales get reported to the credit bureaus as a paid or closed/zero balance account; deed-in-lieu of foreclosure is reported as such.  Also, requires lenders to pay 6% or up to $6,000 toward satisfaction of subordinate liens.
18. Miscellaneous – Including fraud, duress, unconscionability, waiver, and estoppels.

All the defenses listed above depend on the facts of each individual case. This is why it is so important to contact and hire an experienced and well trained attorney, who is passionate about both foreclosure defense law and representing you.  Feel free to call or e-mail us with any questions.  If you are a property owner concerned about losing your property in foreclosure, we are here to serve you!”

We are a debt relief agency.  In addition to other legal services, we help clients file for bankruptcy relief under the Bankruptcy Code.