Foreclosure Defense: Lack of Standing

There are legitimate defenses to home foreclosure, starting with the most basic question: Does the mortgage company even have legal standing to bring a foreclosure action? Surprisingly often, the answer is no. If your mortgage loan has passed hands since you bought the house, that third party probably does not have the original note and other documentation of full and proper transfer.

If you are threatened with losing your home, the experienced foreclosure defense lawyers of Atlas Consumer Law can intervene. We have successfully thwarted foreclosure actions by demonstrating the lack of standing on the part of the plaintiff. You do have rights in this adversarial process - we know how to assert them!

Contact us today online or by telephone at (312) 313-1613 to speak with an experienced Chicago foreclosure attorney.

Lack of Standing as a Foreclosure Defense Strategy

After you obtain a home loan, that loan can be sold to a third party without your input or consent. Many mortgages have been sold and re-sold many times over. More often than not, the original bank or lending institution is not the named plaintiff in a foreclosure action. Unless the plaintiff can prove that it is the proper holder of the note and mortgage, that plaintiff lacks standing to initiate foreclosure.

Mortgage companies are famous for making homeowners jump through hoops, demanding verification of this and that. When pressed in foreclosure litigation, however, those same companies frequently can't locate - or never possessed - the original loan documents. The more times the mortgage has been bought and sold, the more hopelessly messed up the chain of paperwork.

The Illinois Supreme Court has unequivocally stated that "in Illinois, lack of standing is an affirmative defense"* to foreclosure. Consequently, a successful challenge to standing essentially brings the plaintiff's foreclosure claim to a crashing halt. Furthermore, the mortgage company cannot simply pick up where it left off if it suddenly produces the original note. The plaintiff will have to start from scratch to properly establish standing for foreclosure.

Contact Us: Mortgage Litigation Attorneys

Our award-winning lawyers can skillfully counter the legal arguments that mortgage companies will typically offer. For example, a mortgage note endorsed in blank ("Pay to the order of ____") does not automatically confer standing from the original lender to the new entity. The entity seeking foreclosure must still produce the original note.

Atlas Consumer Law enforces your rights and holds lending institutions accountable under state and federal mortgage laws. We exhaust every defense to save your home. At a minimum, asserting your legitimate defenses will force the lender to (a) take you seriously in negotiations or (b) start the foreclosure process over. This buys you time to catch up on arrears or pursue options such as loan modification, short sale, or bankruptcy.

*Greer v. Illinois Housing Development Authority, 122 Ill. 2d 462, 494 (1988).

E-mail us today or call (312) 313-1613 to speak with an experienced Chicago foreclosure lawyer.