When a property owner is served with a summons and complaint for foreclosure, it is essential that an answer be filed. Failure to answer can result in a waiver of valuable defenses, and can result a default judgment of foreclosure against you.
(a) Preparing Your Answer:
American state courts use the concept of “notice” pleading. This means that the only needs to put the plaintiff on notice as to the nature of the defendant/property owner’s defenses. I need not contained detailed or lengthy recitations of law or underlying facts. However, certain “affirmative defenses” must be set forth in the answer. Otherwise, they may be waived. An “affirmative defense” generally involves some new issue or matter that is beyond the plaintiff’s pleading, but which constitutes a defense to the plaintiff’s cause of action.
Your answer should contain a clear, brief response to each of the paragraphs of the lender’s Foreclosure Complaint. If your answer does not contain a response to a particular paragraph, it may be deemed admitted by the court. Then, you should set forth your affirmative defenses. Some of the more common affirmative defenses utilized by property owners in their answers to foreclosure complaints include:
You were encouraged by the lender or a broker to exaggerate your income on your loan application;
You were the victim of a bait-and switch with regard to the terms of the loan;
The lender misinformed you regarding the loan's Annual Percentage Rate (APR), finance charge(s), amount financed, total of payments or schedule of payments;
A contractor started the loan as part of a home repair contract
You have your own insurance, and the lender has added an insurance premium to your account (force-placed insurance). Note: In certain situations, forced insurance may be legal;
The lender has not applied all your payments to your account;
The lender or assignee of the lender did not comply with pre-action notice requirements;
Your loan was assigned from the original lending institute to another entity, and there are questions as to whether the Plaintiff has standing to pursue foreclosure.
Particularly in light of the recent statutory changes that have been implemented by various state legislatures to provide protections to property owners, it is entirely possible that you will be able to successfully defend against a lender’s foreclosure lawsuit, even if you owe substantial arrears. In many instances, lenders have not provided notices in the form and manner required by state law. In other instances, lenders are unable to locate documents that are required for them to establish their legal standing to foreclose. The bottom line: it almost always beneficial for a property owner to file an answer to the lender’s foreclosure complaint.
(b) Time Period for Filing and Serving the Answer:
It is critical that an answer be filed within the required time frame under the rules of your state.
Most states require the lender set forth, within the lawsuit paperwork (within the Complaint, on a cover sheet or on the Summons) how long a borrower has to file his or her Answer to the foreclosure complaint.
Whether a date is stated or not, the Answer usually must be filed within 20-30 days from the date served. If an Answer is not filed, the lender can move for default judgment, which means the borrower has waived his or her defenses to the foreclosure lawsuit.
(c) The Form of Your Answer:
Each jurisdiction has different requirements regarding the precise language and form of pleadings. Accordingly, unless you are familiar with the pleading styles and requirements acceptable in your jurisdiction, you should utilize a sample answer form, such as those which are available for download on our web site. Our samples have the additional advantage of setting forth state-specific affirmative defenses. Obviously, no model form can be simply copied for use in your case, because the complaints served by lenders’ attorneys are not identical. However, a model foreclosure answer can serve as a guide for you and give you valuable information regarding defenses and laws that are specific to your jurisdiction.