There are many ways to stop a foreclosure action against your home without filing for bankruptcy. This article will focus on some of the most common options. Many of the legal options listed below utilize what is called a temporary restraining order and preliminary injunction to temporarily prevent the lender’s foreclosure of a primary residence of the borrower. While not all of these options may apply to your situation, a Nova Law Group attorney would be happy to assist you in determining what causes of action might apply in your individual case.

The first and most common method of contesting a foreclosure action against the borrower’s primary residence is to bring a lawsuit against the lender for violations of the Truth in Lending Act and its related provisions. While in some cases the lender may have complied with the provisions of the Act, in many cases, the lender has failed to comply with one or more provisions of federal law. Certain provisions allow for rescission of the note and deed of trust, and when claimed as a defense to a foreclosure action, can result in a temporary or permanent stop to a foreclosure action if a good faith claim can be made against the lender. Common TILA violations are too numerous to count, but some important examples include: interest rates above the maximum cap defined by statute, inaccurate disclosures on the Truth in Lending Statement, failure to give two copies of the right of rescission to the borrowers after the loan closing, negative amortization provisions in some instances on home equity loans, and non-disclosure of finance charges or hidden fees. While not every loan will state a good faith cause of action for a TILA violation, there are many situations in which the lender has made material errors in the loan documentation, and these errors can sometimes form the basis of a good faith cause of action for a TILA violation and a valid foreclosure defense.

A second common method to contest a foreclosure action is to assert a violation of California state law, and in particular, a violation of the foreclosure statutes California recently passed to combat the deleterious effects of the foreclosure crisis. For example, California Civil Code Section 2923.52 requires lenders in most instances to discuss loan modification options with borrowers and then wait 3 full months before posting a notice of sale on the property. Unfortunately, many lenders refuse to comply with the statute or maintain in bad faith that the property is non-owner occupied, and therefore, that they don’t need to comply with the statute. Often people have to sue the lender or otherwise block the foreclosure action to obtain relief as California law requires, but this relief is available in some instances.

A third common method to contest a foreclosure action is to assert a violation of California Civil Code Section 2923.5, which requires lenders to take steps to offer borrowers financial options before a notice of default is posted on the property. Sometimes lenders will proceed to post a notice of default on the principal residence of the borrower without ever contacting the borrower to work out options, and this kind of behavior by the lender is illegal. Violations of Section 2923.5 can sometimes offer borrowers a basis to challenge the foreclosure action and delay foreclosure until the lender complies with the California law.

Not all of the above options apply to all clients or all situations, but a Nova Law Group attorney would be happy to assist you in determining which options might apply to your individual situation and if any good faith claims can be made against the lender in your circumstance.