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Understanding foreclosure defenses could save your home.
With the current state of the economy, many homeowners in West Virginia (WV) are facing financial hardships, including the possibility that banks will foreclose on their homes. However, evidence shows that the real estate industry has embraced a plethora of fraudulent practices, exacerbating financial constraint on homeowners. For this reason, courts are acknowledging and becoming more sympathetic to borrowers who raise foreclosure defenses in hopes of saving their homes. But foreclosure laws are complex; thus, borrowers may consider hiring an experienced WV foreclosure attorney to take advantage of the common defenses to foreclosure.
Common Foreclosure Defenses
While the best strategy will vary on a case-by-case basis, some foreclosure defenses are used more frequently than others. Below are the most common defenses to foreclosure raised in court:
- Lack of Consideration. Consideration is something of value or “benefit” that each party offers to induce the other in entering a contractual agreement. As with all contracts, mortgage contracts require an element of adequate consideration to be valid. Thus, if a borrower or homeowner finds out that the deal lacks consideration, he or she may use it as a foreclosure defense to keep a property or even demand for damages.
- Failure to Comply with Notice Provisions. Borrowers must receive written notice of noncompliance prior to the bank initiating a foreclosure. Thus, if the borrower did not receive a notice, it can be used as one of his or her foreclosure defenses.
- Failure to Comply with Release Provisions. This foreclosure defense is applicable 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.
- Waiver of Right of Privilege. If, in the past, the lender acquiesced to a borrower’s failure to comply with a contract term, it might have forfeited its right to pursue a later claim for the same violation.
- Statute of Limitations. Foreclosure actions must commence within the applicable time frame allowed by the law in WV.
- Fraud. One of the strongest defenses to foreclosure is mortgage 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 rescind the contract.
- Unclean Hands Doctrine or Equitable Defenses. This principle states that someone who is guilty of wrongdoing does not deserve the right to bring up a lawsuit or motion for equitable relief. The unclean hands doctrine may be used as a foreclosure defense if it is found that the lender is engaged in illegal or fraudulent conduct. The court may reverse or dismiss a foreclosure action, even if the borrower violated the contract’s terms.
- Tender of Payment. If the foreclosure defenses mentioned above are not possible, a borrower may offer an unconditional mode of payment to satisfy his or her 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. Tender of payment can be used as a foreclosure defense to liability for interest after the due date of the mortgage.
Seek Help from a WV Foreclosure Attorney
Understanding the law and identifying foreclosure defenses can be difficult and exhausting to homeowners. Looking for help in applying legal strategies to save your home? The attorneys at Hendrickson & Long are dedicated and experienced in defending clients against foreclosure actions throughout West Virginia (WV). Contact us today at 304-346-5500 to schedule your consultation.