Considering the current state of the economy, many Florida residents are experiencing financial hardship and corresponding problems. At times, these problems may lead to mortgage foreclosure. The good news is that an experienced attorney can assist you with foreclosure defense and give you the best chance of retaining your home. The following are some of the more common types of defenses that can be raised in an action for foreclosure.
Defenses to Foreclosure
Lack and Failure of Consideration: Like all contracts, mortgages need consideration in order to be enforceable. If a lack of consideration is established, it may not act to rescind the entire contract, but it may entitle a mortgagee to some damages. If no funding was ever advanced in connection with a loan, the mortgage would be invalidated in its entirety.
Failure to Comply with Notice Provisions: Mortgagees must receive written notice of their noncompliance prior to foreclosing if the same is provided for in the mortgage agreement. If they fail to do so, the action could be dismissed.
Failure to Comply with Release Provisions: This occurs when the lender fails to release portions of a mortgaged property from a mortgage lien despite the obligation to do so. These provisions are common in constructions loans that deal with the sale of parcels or units.
Fraud: If a mortgage is procured by fraud, it can be canceled and the foreclosure denied. The borrower can either affirm the contract and claim money damages or rescind the contract.
Duress: This defense requires the borrower to show the other party exerted so much pressure on them that they lacked the ability to exercise free will. It can be accomplished through threats of physical harm or criminal prosecution, but also through threats of financial ruin. Only economic duress can be claimed as a defense to a contractual obligation in Florida, which involves a required showing that the coercive party had no legal right to pressure the other in a certain way.
Waiver of Right of Privilege: If the lender has acquiesced in the past to a borrower’s failure to comply with the terms of the contract, the lender may have asserted the future right to claim violation of provisions in order to establish default or foreclosure. It must involve the international relinquishment of a known right. This is also related to the defense of estoppel, which requires a justifiable reliance prompting a change in conduct by the mortgagor so that the mortgagor acts in a way that it would not have acted otherwise.
Statute of Limitations: Foreclosure actions generally must commence within five years.
Unclean Hands Doctrine: Foreclosures must be equitable proceedings, which means that if one party is engaged in illegal or fraudulent conduct, a foreclosure action may be reversed or dismissed.
Tender of Payment: If a borrower makes a payment timely and properly, it may be recognized as a satisfaction of obligations to the mortgage holder depending on when such tender is made. Depending on the stage of the foreclosure proceedings, a mortgage payment, all past due amounts, or the entire obligation must be made in order to meet this requirement.
Florida Foreclosure Attorney
The attorneys at Hoffman, Larin & Agnetti, P.A. have successful experience assisting clients in foreclosure defense. Contact our office today to schedule a consultation to meet with an attorney and discuss your case. We serve clients in Dade, Broward, and Monroe Counties.