How to Stop Foreclosure by Filing a Lawsuit

Most people who purchase a house take out a mortgage, a loan to finance the price of the house. The borrower agrees to pay back the sum of money owed over a period of time. When a borrower cannot repay this sum, he may face a process called foreclosure. Foreclosure means the bank that owns the mortgage can take the right to live in the house away from him. The borrower loses any equity in the house and may have to move. You can stop this process temporarily with a lawsuit.

Instructions

1

Hire a lawyer specializing in real estate. Make sure the lawyer understands your situation completely. Once you are behind on payment of the mortgage, the bank may file a foreclosure lawsuit. The aim of the lawsuit is to remove you from the property and take legal claim to it. Once this lawsuit is filed, you will receive a summons that notifies you that it has been filed. You have 28 days until you have to respond to the foreclosure lawsuit.

2

Respond to the summons. If you do not answer the summons within this time frame, the mortgage company can get a default judgment against you. The default can allow the local sheriff's office to sell the property without your consent and legally remove you and your belongings from the premises.

3

Have your lawyer file a motion for extension of time. This motion must be filed in local courts. This is an answer to the suit filed by the bank. The motion for extension of time will grant you an additional 30 days or more to respond. This can give you time to find necessary documents and deal with the threat of foreclosure more effectively. Filing a motion for extension of time may help you avoid foreclosure by giving you the leverage to convince bank officials to lower your interest rates or extend the term of the mortgage. This can help you keep your house.

4

Find out if the bank is in violation of the law. Investigating this can buy you time or help you avoid foreclosure altogether. Sometimes banks are in violation of the Truth in Lending Act. This could subject bank officials to financial penalties. Banks may be in violation of this act because of actions such as failing to notify borrowers of late-payment fees. This may make it undesirable for the bank to foreclose on the property in question and help you avoid foreclosure. Your lawyer will work with you to investigate these claims.

5

Negotiate with the bank if you find any violations of the Truth in Lending Act. Bank officials may be reluctant to foreclose on a house if they can possibly avoid doing so. Foreclosure leaves the bank with a bad loan and property that may require fees to maintain. By taking the previous steps, you've demonstrated to the lender that you will take any legal steps available to stop foreclosure.