Setoff is an example of a defense to a mortgage foreclosure lawsuit. This defense alleges that you are owed money by the bank or that the bank has improperly applied your payments. While this defense does not necessarily defeat a lawsuit, it can offset the amount of money that the bank claims that you owe. This is particularly useful if you are trying to exercise your right of reinstatement or redemption. If you believe that you have a claim for setoff, then inform your foreclosure defense attorney so that he or she can explore the issue for you.