Foreclosure defense is the process of legally fighting back against a bank that wants to foreclose on your home. This defense forces the bank or other lender to provide proof they can legally foreclose on your home. Sometimes, you can use a foreclosure defense instead of filing for Chapter 7 or 13 bankruptcy.
If you believe your lender foreclosed on your home too early or in error, you might want to consider a foreclosure defense. Do not assume a bank is in the right when they foreclose on your home.
Federal laws exist that protect homeowners from predatory loans, mainly the Truth in Lending Act. Lenders must not engage in deceptive lending or advertising practices. If the lender does not warn you about possible interest rates or payment increases, they may violate the Truth in Lending Act. Unfortunately, many banks or lenders do an inadequate job of disclosing their terms and sometimes commit outright forgery or fraud.
Foreclosure defense may allow you to stay in your home for longer, giving you more time to sell your home or cure a default. According to Pennsylvania Usury Law Section 404, you may settle a debt up to one hour before a bidding or sheriff sale begins. Delaying the foreclosure process may help you raise enough money to prevent losing your home in an auction.
Not everyone should rely on a foreclosure defense to cure their bankruptcy. Sometimes it is safer to declare bankruptcy to fix your debt. Sometimes, legal protection against predatory lending is a viable option.