Top 5 Foreclosure Defenses in Virginia, Maryland and Washington, DC

If your mortgage company forecloses, you may have defenses. Virginia and Maryland are nonjudicial foreclosure jurisdictions, which means you must sue the mortgage company to raise these defenses. But the District of Columbia is a judicial foreclosure jurisdiction. In DC, you can raise these defenses in your Answer to the Complaint for Judicial Foreclosure. Here are the Top 5 Foreclosure Defenses in Virginia, Maryland, and Washington, DC.

Calculation errors

If your lender fails to credit payments that you have made then perhaps you should not be in foreclosure at all. A lender’s miscalculation of amounts owed can give rise to a foreclosure defense. This applies to both principal balance, escrow balance, payoff and reinstatement figures. Unfortunately, this happens more often than one would expect, and this is the most common foreclosure defense.

Notice requirements

Maryland, Virginia, and Washington, DC have different requirements for notice to borrowers prior to foreclosure. If your lender attempts to foreclose against your primary residence and you do not receive notice, that can give rise to a foreclosure defense. Lenders per jurisdiction must provide differing degrees of notice of foreclosure, but all must provide a notice of intent to accelerate. After all, it should not come as a surprise to you that your home has been scheduled for a foreclosure auction.

Truth in Lending violations

TILA, or the Truth in Lending Act, requires accurate and fair loan origination and billing practices. Today, all large institutional lenders comply with TILA. Local mortgage lenders, however, may fail to meet TILA standards for loan origination disclosures. In those cases, the homeowner may be able to rescind the loan.

Show the note

This defense challenges the lender’s ownership of the mortgage loan. Lenders often transfer (or “assign”) loans to different lenders. While common during the 2008 mortgage meltdown, the so-called “show the note” defense carries less weight these days. That’s because lenders have cleaned up their documentation, which had gotten sloppy during the days leading up to the financial crisis. In most cases, lenders today can prove ownership.

Predatory lending

Like the “show the note” defense, predatory lending is less common lately. Most of the predatory loans that originated during the mortgage bubble have either already foreclosed or are too old to be considered predatory at this point. Still, in some cases, a defense of predatory lending can be raised. This is especially true in cases where the borrower belongs to a protected class.

Sort through your foreclosure defenses

If you are facing foreclosure, the experienced foreclosure defense team at Lee Legal can help you determine your best options. Call us to schedule a free consultation.