Full question:
How do I answer a pending law suit to foreclose to buy more time?
- Category: Real Property
- Subcategory: Foreclosure
- Date:
- State: Arkansas
Answer:
Over the past decade, mortgages have frequently been sold and assigned to different lenders. Generally, lenders can assign a borrower's mortgage as long as the contract does not prohibit it. However, the borrower remains responsible for payments despite these assignments. In many cases, the original mortgage note may be lost or destroyed, making it difficult for lenders to prove their claims. If you can persuade a judge to compel the production of hard-to-find documents, it may delay the foreclosure process, giving you more time and increasing pressure on the lender to renegotiate your mortgage.
Judges often accept electronic documentation, and lenders may provide alternative paperwork to establish their claim. There have been instances where foreclosure actions were dismissed due to the lender's failure to produce the original note, but the court will ultimately decide whether the foreclosure can proceed.
In foreclosure lawsuits, you typically ask the court for three things in this order:
- A temporary restraining order (lasting usually under two weeks)
- A preliminary injunction (lasting until the court decides the case)
- A permanent injunction (granted if you win your case)
Your answer to the foreclosure complaint should respond to each allegation, either admitting or denying them, or stating you cannot admit or deny due to lack of knowledge. Valid defenses may include claiming the wrong party is named in the loan contract or that you have made all payments on time. Lack of funds is not a valid defense. This answer is your chance to show why the property should not be foreclosed upon.
There are different types of foreclosure. The most common is judicial sale, which is available in every state and involves court supervision. The proceeds from the sale go to satisfy the mortgage and other liens. The second type is foreclosure by power of sale, which allows the lender to sell the property without court supervision and is generally faster. Other less common methods, like strict foreclosure, are only available in a few states, such as New Hampshire and Vermont.
Some states have statutory redemption laws, allowing borrowers to redeem their property after a foreclosure sale, typically within six months to a year. However, New Hampshire does not have a post-sale statutory right of redemption.
Two federal laws also impact foreclosure actions:
- Bankruptcy: Filing for bankruptcy automatically halts foreclosure proceedings. Whether the stay will be lifted depends on the equity in the property.
- Servicemembers Civil Relief Act of 2003: This law provides protections for active-duty service members, allowing them to contest foreclosure actions and requiring lenders to verify that the borrower is not on active duty.
This content is for informational purposes only and is not legal advice. Legal statutes mentioned reflect the law at the time the content was written and may no longer be current. Always verify the latest version of the law before relying on it.