Foreclosure is a legal process where a mortgage lender seeks to take possession of a property when the borrower has defaulted on the loan. Florida is a judicial foreclosure state, which means that the lender must file a lawsuit, prove their case in court and obtain a final judgment of foreclosure. This judgment allows them to sell the property at an auction to recover the outstanding debt.
However, borrowers have a variety of defenses available to them, some of which can prevent the foreclosure process entirely. These defenses are affirmative defenses, meaning the borrower has the burden of raising and proving them in court.
- Lack of standing — The mortgage lender or servicer bringing the lawsuit must demonstrate that they are the rightful owner of the mortgage note and have the legal right to foreclose. A borrower can attack standing by showing there are issues with the transfer of the note or improper assignments.
- Unclean hands — If the lender has engaged in unscrupulous practices, overreaching, concealment, trickery, or other unconscientious conduct, the court may deny their foreclosure request. This defense can include instances of predatory lending, dual tracking (simultaneously pursuing foreclosure and loan modification) or misleading the borrower.
- Procedural defects — Florida law mandates specific procedures that lenders must follow in the foreclosure process. Failure to comply with these procedures can be a valid defense. Examples include failing to issue a proper notice of default or not allowing the borrower the opportunity to cure the default.
- Violation of the Florida Consumer Collection Practices Act (FCCPA) — This state law protects debtors against such practices as attempting to collect an invalid debt or communicating with a debtor known to be represented by counsel.
- Truth in Lending Act and RESPA violations — Non-compliance with these federal laws regulating consumer credit and real estate transactions can also be a defense.
- Statute of Limitations — A foreclosure action must be initiated within five years of a mortgage default.
Pursuing foreclosure defenses can be complex. An experienced foreclosure defense attorney can thoroughly investigate all potential defenses, gather evidence, and advocate for the borrower in court. They can also help negotiate with the lender for alternatives to foreclosure, such as loan modifications or short sales.
H. Clay Parker, Esq., based in Orlando, is one of central Florida’s most respected business litigation and commercial law firms. If you are being threatened with foreclosure, feel free to contact us online or call 407-216-2504 for a consultation.
