A Florida couple has a new chance to keep their home after an appeals court judge overturned a ruling that allowed their lender to repossess their home. Repossession happens as a part of the foreclosure process after borrowers have defaulted on their mortgage. While lenders do have a right to repossession based on the mortgage, courts must review each case to make sure that banks aren’t improperly depriving people of their property.
The Fourth District Court of Appeals said that they sided with the homeowners because the lender didn’t show that it owned the mortgage before the foreclosure was filed.
With the appeals court ruling in hand, the Florida couple can now contest the foreclosure and seek damages. They have alleged that their lender violated the Truth in Lending Act. If the lender is found to be responsible for any wrongdoing, then they may be liable for damages caused by the improper foreclosure.
In this case, a third party has already purchased the home in a foreclosure sale. Now the bank may have to refund that third party, although that doesn’t guarantee that the couple will get their home back. They must still prove that the foreclosure was improper, or they must come up with the funds to buy the home back or settle their debt with the lender.
Some borrowers who are very far behind on their mortgage payments choose to file bankruptcy to have the court’s help in properly restructuring their debt and preventing foreclosure. However, this is a complex process that often requires careful planning and the assistance of an experienced foreclosure and bankruptcy professional.
Source: Sun Sentinel, “Couple prevails in foreclosure appeal,” Paul Owers, Nov. 8, 2012.