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Common Defenses to Foreclosure

With the current state of the economy, many homeowners are facing financial hardships, including the possibility that banks will foreclose on their homes. For those wishing to dispute the foreclosure and stay in their homes, consider hiring an attorney experienced in foreclosure defense. While the best strategy will vary on a case-by-case basis, some foreclosure defenses are used more frequently than others. The following are some common defenses raised in a foreclosure proceeding:

Lack of consideration. As with all contracts, mortgage contracts require consideration to be valid. If one can establish the deal lacked consideration, a borrower may be entitled to damages. If no funding was advanced in connection with the loan, the mortgage is invalid.

Failure to comply with notice provisions. Borrowers must receive written notice of noncompliance prior to the bank initiating a foreclosure. If no notice is given, the action could be dismissed.

Failure to comply with release provisions. This occurs when the lender fails to remove a mortgage lien from the property, despite an obligation to do so. This situation is common in construction loans that involve the sale of parcels or units.

Fraud. If a mortgage is procured by fraud, it is subject to cancellation. The borrower may either affirm the contract and claim money damages, or else rescind the contract.

Waiver of right of privilege. If, in the past, the lender acquiesced to a borrower’s failure to comply with a contract term, they might have forfeited their right to pursue a later claim for the same violation.

Statute of limitations. Foreclosure actions must commence within the applicable time frame allowed by law in West Virginia.

Unclean hands doctrine. If the lender is engaged in illegal or fraudulent conduct, a court may reverse or dismiss a foreclosure action, even if the borrower violated the contract’s terms.

Tender of payment. In some cases, if a borrower makes a timely and proper payment, they can satisfy their obligation to the mortgage holder. Depending on the stage of the foreclosure process, the payment may be a single mortgage payment, all past due payments, or the entire obligation.

Equitable defenses. This involves applying general principles of equity when dictated by justice or good conscience.

Foreclosure Defense Attorney

The attorneys at Hendrickson & Long PLLC are experienced in defending foreclosure matters. Contact us today to schedule a consultation to discuss your case. Our office is located in Charleston, West Virginia.