As a recent news story just showed, homeowners facing foreclosure have more options than simply packing their bags and letting a lender take their home. A Florida couple paid for their Collier County home with cash, only to learn later that the lender, Bank of America, was trying to foreclose on their home.
After 18 months of ongoing communication with the bank and some investigation, the foreclosure lawsuit against the couple was dropped. The bank was ordered to reimburse the couple for their legal fees, but five months later, the bank still hadn’t paid. The couple, in turn, filed a lawsuit against the bank and attempted to seize the lender’s assets. After the sheriff’s office arrived at the bank ready to seize those assets, which included furniture and other items, the bank wrote the couple a check.
The story is an interesting one and certainly gives hope to any homeowner who is facing foreclosure, or fears they may soon be. However, the lawsuit the couple filed was based on outstanding payments, not the actual foreclosure. So, is it possible to sue your lender after foreclosure?
It Is Possible to Sue After Foreclosure
Homeowners have many legal rights they can assert when they are facing foreclosure. Many of them are protected under the Truth in Lending Act (TILA), enacted by Congress in 1968. This Act protects borrowers from unscrupulous lenders and can help them keep their home if they are facing foreclosure. The Act requires all lenders to fully disclose the terms, costs of the loan, and all fees associated with the loan.
When a lender fails to abide by this Act or any other legislation that protects the rights of homeowners, they are in direct violation of the law. When that is the case, homeowners often have many options. These include suing for damages caused by the violation, canceling the mortgage, suing for statutory damages, and suing for attorneys’ fees and court costs.
Due to the many federal and state laws that protect the rights of homeowners and consumers, there are a number of requirements and regulations a lender may be in violation of. Determining which law has been broken, and then proving it in court, is particularly difficult for those not familiar with these laws. This is why it’s critical for anyone facing foreclosure to speak to a foreclosure defense lawyer in Florida who can help homeowners understand their rights.
Lawsuits Against Lenders Come with Many Challenges
Although it is possible to sue a lender if they have violated your rights and started foreclosure proceedings, it isn’t easy. There are many challenges to overcome in the courts, and proving a case is often difficult.
One such challenge is the fact that homeowners have a chance to argue their case in front of a judge during the initial foreclosure lawsuit. Any arguments or supporting evidence that homeowners have should be presented at this time. After hearing from both sides, the judge will then make their decision. If the judge makes a foreclosure judgment, it means the lender can proceed with the foreclosure.
After this time, many homeowners often think of new information and arguments that can be used to save their home. For example, the homeowner might remember that they had asked for a loan modification but the lender denied them. That could be considered a violation of Florida’s Unfair Trade Practices, and potentially even the federal Troubled Asset Relief Program. This, under other circumstances, could form the basis of a lawsuit.
Unfortunately, if these arguments are not raised during the initial lawsuit, it is unlikely that a judge will consider a lawsuit that raises these arguments. It’s at the first foreclosure hearing that homeowners are given a chance to raise their defenses in court. If they don’t win there, it can be difficult to convince a judge to listen to them in the future. Generally speaking, courts prevent people from litigating the same issue more than once in court. This is a legal principle known as “res judicata.”
Another legal doctrine will also present challenges for homeowners who want to have their case heard again by the courts after the initial foreclosure lawsuit – this is the legal doctrine of Rooker-Feldman.
The Rooker-Feldman doctrine states that federal courts, other than the U.S. Supreme Court, cannot overturn a decision based on facts that are closely related with arguments made in the state courts. Using the same example in which a homeowner raises the loan modification argument when taking the case to federal courts, the courts would likely refuse to hear it. The courts would consider any loan modification given or denied as inextricably intertwined with the case heard in state court. That would bar the federal court from hearing the case.
Homeowners Must Defend Foreclosure as Soon as Possible
If a lender violates a homeowner’s rights, the homeowner can sue them after a foreclosure. However, there are so many challenges to overcome, including proving that both the lender and the court that originally heard the case overlooked the rights of the homeowner. In addition, homeowners must have solid arguments that show the lender should have never foreclosed on their home. Those arguments most often also have to be raised during the original foreclosure hearings.
Due to these challenges, it’s always best that homeowners prepare a foreclosure defense as soon as possible and don’t wait until the foreclosure proceedings are over. Although it’s possible to file a lawsuit against a lender after a court has issued a judgment of foreclosure, they’re very difficult to win.
Don’t Wait, Call a Florida Foreclosure Defense Attorney Today
At Loan Lawyers, we are the Fort Lauderdale foreclosure defense attorneys who aggressively defend homeowners to help them stay in their properties. We will thoroughly analyze your mortgage documents and terms of the loan to identify any possible violation of your rights that can help with your foreclosure defense. If we find that the lender has violated any of your rights, we will hold them accountable for paying whatever is owed to you and give you the best possible chance of staying in your home. Don’t wait until a foreclosure judgment has been issued. Call us today at (954) 523-HELP (4357) or contact us online for your free consultation.
Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.