Legal Defenses to Foreclosure

The following are legal defenses to foreclosure to beat the bank:
 1.       Truth in Lending Act (TILA) violations enabling rescission.  If your loan is a refinance, the bank must have provided you a set of disclosures at the time of closing.  If these disclosures are inaccurate, the loan is statutorily rescindable under TILA.  For example, in a foreclosure action, the finance charge must have been accurate within $35 or the loan may be rescindable.  This means the loan is cancelled and all money paid to the lender is refunded.
2.       Truth in Lending Act (TILA) violations enabling damages.  If you purchased the property  with the loan or used the proceeds to refinance and proper disclosures were not given, then you may be entitled to money damages to offset the foreclosure.
3.       Home Ownership and Equity Protection Act (HOEPA).  This is a very powerful federal law governing high cost refinance loans.  If your loan is under $150,000 or the initial rate was above 8%, you should evaluate your loan for violations of this act.  Violations here enable rescission and substantial money damages that can be in excess of the loan’s dollar amount.
4.       Failure to Provide a Correct Notice of the Right to Rescind.  There is a specific notice that must be provided to refinance customers at closing.  If this form is inaccurate or incorrect, the loan is rescindable up to three years after the closing date.
5.       Breach of Contract.  Many times the lender will do things that are unfair or unjustified before starting the foreclosure process.  Just as you have an obligation to pay the mortgage, the lender has a responsibility not to interfere with your ability to do so – like force placing insurance making the payments substantially more expensive than they should have been.
6.       Real Estate Settlement Procedures Act.  This federal law governs many types of disclosures that lenders must provide at the time of closing, in addition to prohibiting things like kickbacks and unearned fees.  It enables damages, and sometimes rescission if the error triggers TILA.
7.       Fair Debt Collection Practices Act.  This federal law requires servicers or lenders who obtain the mortgage after default follow specific protocol in attempting to collect on the debt.  A failure to follow this law enables statutory damages and attorney’s fees.
8.       Fair Credit Reporting Act.  This federal law governs lenders ability to report information about the mortgage and requires the accurate reporting of negative information.  Violations of this act also enables damages and attorney’s fees.  Punitive damages might be available under this act.
9.       Real party in interest.  This is a procedural defense to foreclosure that can be extremely effective at stopping the lender’s ability to foreclose.  It essentially questions the ownership of the mortgage and questions whether the foreclosing party is, in fact, the holder of the mortgage and note.
10.   Unconscionability.  This defense is focused on the events surrounding the creation and closing of the mortgage loan.  A violation here gives the court great leeway in deciding whether the mortgage should be voided or changed.
11.   Failure to state a claim upon which relief can be granted.  This general defense attacks the lender’s ability to foreclose and is can be used in conjunction with one of the other foreclosure defenses.
12.   Failure to establish conditions precedent.  Want to get a foreclosure action thrown out of court right away?  Use this defense that attacks the lender’s pre-foreclosure processes.
13.   Failure to comply with FHA pre-foreclosure requirements.  FHA requires every lender to mail a booklet called “How to Avoid Foreclosure” and set up a face-to-face meeting with the borrower before foreclosing (in most cases).  If the lender does not take these steps, then it cannot foreclose.

Life after a foreclosure can be filled with lots of doubt about what the future will hold for you and your family. Losing a home can be very devastating and is hard to recoup from. Life however does and will go on for better or worse. You can make rebuilding life after a foreclosure a beneficial learning experience that will prepare you for a sound financial future if you are willing to commit to regaining your stability.

For those seeking to move on after a foreclosure one of the first steps needed is to reassess finances. Either a mismanagement of money or an unfortunate loss of income may have been the cause of the foreclosure. Taking on a home that was too expensive, falling behind on the mortgage repeatedly or loss of a job and lack of savings to accommodate are all reasons why so many people end up losing their homes.

Learning to manage ones finances is the key to rebuilding ones life after foreclosure. Set up a budget that allows you to live beneath your means. When renting or leasing a new home or apartment choose a place that is no more than 28%-30% of your net monthly income. This calculation is used by many home lenders to determine if a person can afford a home and still live comfortably.

You should use these numbers as a guide for obtaining affordable housing. Minimize luxury expenses while trying to reestablish yourself. If you must have cable television, internet and other optional services opt for the minimal services to keep expenses low.

Work on improving your credit and building a savings. Having good credit could have helped in avoiding a foreclosure. People with decent credit are able to refinance to make their mortgages more affordable and if you werent able to do this because of your credit you should consider serious credit repair. The only true way to repair credit under any circumstance is to pay off negative balances and begin paying bills on time. Good payment history over a period of time will gradually improve a damaged credit report due to foreclosure. In addition, establishing a savings is also necessary. Having reserve funds for a rainy day helps people get through rough periods such as a job loss. Having such funds can be the determinant factor as to whether you can pay a mortgage or not. For security purposes having three to six months of living expenses in a savings account is advisable.

It is not unusual for many new buyers to commit some blunders when buying foreclosure homes for sale. Oftentimes, it is the first time home buyer that gets entangled with unexpected difficulties. Understandably, though, it is due to the insufficiency of knowledge about the real estate industry and the foreclosure process that cause many to commit mistakes, which, unfortunately, could be costly.Always Seek Professional AdviceThis is a must for every first time home buyer who is eager to either buy his first property or try his luck on the real estate market. Either way, the benefits of seeking professional advice greatly outweigh any expediency that might come with just having to rely on your own judgment.An advisor can also help you see things from a different perspective. An impartial advice is always useful especially when you are drawn to several interesting properties at once. What you need is someone who has sufficient experience in handling transactions and a real estate professional can provide you this.Buying The Wrong House For The Wrong ReasonThere are many properties that are just too desirable to resist. Buyers tend to overlook the crucial fact that they need to know what their goals are when purchasing a house. These objectives must be the first thing on your mind when you look at foreclosure homes for sale. Neglecting to take your objectives into consideration is like living without a purpose.Knowing what you want, what you need, and whether you can afford it, are important considerations that you need to remember when shopping for a foreclosure home if you do not want to be stuck with a house that you do not want and cannot afford to keep.Neglecting To Prepare Your Financial StateWhen you have already chosen the right property for you out of the thousands of foreclosure homes for sale, you might want to seal the deal. And this often involves making an offer to the lender or to the bank who owns the property. In turn, they would be very interested to know your financial capacity, and would require you to submit financial data that they could pore over and peruse before deciding whether to accept your offer and finance your loan.It pays to know that investing in real estate also means investing in time and preparation. You need to prepare yourself financially and this could actually take months of preparation especially when you need to fix your credit score. Some people who are aware of this requirement put off buying large ticket items in preparation for a home purchase as this could greatly alter their financial status in terms of capacity to pay.

Buying home foreclosures for sale is a great way to start an investment. One needs only the right attitude and skills to attain success in this field. The real estate market is becoming more accessible to many people and is encouraging a lot of first time home buyers and new investors to try out their luck in finding either their dream house or their dream investment.Instant EquityHaving value for hard-earned money is the goal of every investor and home buyer. When one invests in the real estate business, he does not only want to acquire an asset. He also wants that asset to be a sort of an investment that could generate profit for him even while he sleeps.A cheap house, for example, can already provide the investor instant equity from the savings that one will gain from its purchase. Foreclosures are often sold for great discounts. This means thousands of dollars in instant equity and savings money that you can either put away in the bank to earn interest or invest in other properties and options.Bargain FindsIt is a misconception that home foreclosures for sale are discounted because they come in undesirable state and poor localities. In fact, some of them can be found in good, chic communities and are generally well-kept. First-time home buyers would be delighted to know that there are thousands of properties that have been maintained well are available for them to purchase. And these properties are genuinely bargain finds as they represent picture-perfect houses in nice, quiet neighborhoods.Smart InvestmentsForeclosure investing is one of the smartest investments that one could ever make. If you know how to look, where to find, and how to go about the whole buying process, then you can be assured that your investment will be worthwhile. Many houses are truly bargain finds that you only need to spend a minimum amount to be able to resell it for a profit. And as property continuously appreciates, buying home foreclosures for sale benefit you in the long run by providing you with the option of either renting them to others or waiting for the right opportunity to offer them for resale at very profitable margins.