The best way to fight a foreclosure is to avoid it ever being filed. There are several actions you can take to prevent or delay foreclosure. This article explores some of them.

Examine Your Finances

As a first step, make sure you are communicating with your mortgage company. Open the letters. It might be scary, but they will contain important information. Make sure you know exactly how much you owe and how many payments you are behind. Make a list of your monthly income and monthly expenses. Can you pay your mortgage for a while longer if you give up a car or your expensive stereo system? You might need to make some tough decisions, but if you do not ask yourself these questions, others will.

Seek Guidance and Assistance

Many jurisdictions have emergency mortgage assistance programs, which will help with house payments. Pennsylvania and Delaware, for example, have programs under which a borrower with a temporary problem can get a loan to cover a delinquent mortgage, or in some cases, even obtain continuing assistance with mortgage payments. These programs are often managed by local housing authorities or legal aid offices. Contact an FHA lender to see if any of their programs are appropriate for your circumstances. Several states offer free counseling services, either through government programs or non-profit organizations.

Contact the Lender or Servicer

When you apply for a home mortgage, you may think that the lender will collect your payments until your loan is paid off or you sell your house. That's often not what happens. In today's market, loans and the servicing of them are bought and sold.

For more information about mortgage servicing go to the Federal Trade Commission’s Web site.

Consider Bankruptcy

If you are unable to reach an agreement with the lender, it makes sense to consider bankruptcy. Like some of the other possibilities mentioned in this article, bankruptcy will not work for everyone. Go to an article about filing for bankruptcy and foreclosure to read more on the topic.

Make Sure the Right Party is Foreclosing

In the past, mortgage servicers sometimes made mistakes in recording mortgage transfers. These mistakes could be used to the homeowner’s advantage in a foreclosure. While this still happens occasionally, most new mortgages are recorded through the Mortgage Electronic Recording System (MERS), and so mistakes happen less frequently. Nevertheless, it’s still a good idea to visit the office where deeds are recorded in your county, and see what is on file.

Read Your Mortgage Documents

Your mortgage and promissory note explain the procedures the servicer must follow in order to foreclose. If the servicer did not follow the correct procedures, do not assume that the foreclosure is invalid and unenforceable. In many cases, these deficiencies need to be raised promptly. And remember that in most circumstances, a procedural deficiency will only buy you time. The lender can and will remedy the situation and complete the foreclosure.

Make Sure the Lender and/or Servicer Complied with the Relevant Laws

Several jurisdictions have consumer protection laws, mortgage regulations, and predatory lending or high-cost loan laws. Moreover, lenders and servicers are also subject to federal laws such as the Truth in Lending Act (TILA), the Real Estate Settlement Procedures Act (RESPA), and the Home Ownership and Equity Protection Act (HOEPA). While it’s fairly rare for a lender to fail to comply with these laws, it does happen. It may occur because a lender makes a genuine mistake, or because the lender is unscrupulous. In any case, you should review the mortgage note and the relevant disclosures you received to make sure the lender or servicer complied with the relevant laws. If you discover a compliance failure, this does not mean that you are automatically immune from foreclosure, but it might entitle you to reduced payments or the return of some money. It might also give you a counterclaim against the foreclosing servicer.

Foreclosure Procedure

If your servicer begins foreclosing on your home, how you will respond depends on where you live. If you are in a jurisdiction that requires judicial foreclosure, you will need to file an Answer and raise any counterclaims (claims against the foreclosing party), claims against additional parties (such as the lender that originated the loan), or defenses before a deadline expires. The Summons that came with the Complaint should explain when your Answer is due. If it does not, you’ll need to find out. You can call the bankruptcy court and ask. If you do not file an Answer by the deadline, you will be in default, and may lose the right to raise claims and defenses later on. Remember, this is a legal proceeding. It can be complicated, and there are lots of deadlines to meet.

If your jurisdiction permits foreclosure by advertisement, there may be no formal way to object built in to the foreclosure procedure. If that’s so, you’ll have to challenge the foreclosure with your own lawsuit. This may be very difficult because few jurisdictions offer forms for such a case.

Conclusion

While you may not be able to defeat a foreclosure action, it does not hurt to look at the documents and consider whether you have a defense. Challenging the legality of a foreclosure can be a tricky business, though some have managed to do it successfully.

Read an article on state predatory lending laws and fighting foreclosure.

Consult a bankruptcy attorney who knows the rules of your jurisdiction and will explain your options.