What are some common defenses to commercial foreclosure?

If you are involved in a commercial foreclosure and you intend to fight against it, there are several defenses that you can use. Your options on commercial foreclosure defenses include equitable, contractual, statutory, and lender liability. Equitable defenses are based on the principle of equality. Under this category, you can raise several defenses like equitable estoppel, waiver, merger, laches, and unclean hands. The second type is contractual defense, which is under the terms of the loan documents. Lack of consideration, lack of notice, defective acceleration, accord and satisfaction, reinstatement and tender, and promise to renew are the specific defenses that can be used under this classification.

Statutory defenses, meanwhile, are legal defenses that are grounded in the state’s statutes where the property to be foreclosed is situated. Examples of these are lack of notice, usury, statute of limitations, and statute of frauds. Lastly, there is what they call lender liability defenses which points to the lender’s conduct during the service of the loan. These include breach of duty of good faith, unconscionability, unscrupulous inducement, and so on. It is important to know that there are also other defenses that are only applicable to residential mortgages, and thus cannot be used in commercial mortgages. These include Truth-in-Lending Act, Residential Settlement Procedures Act (RESPA), Homeowner Equity Protection Act (HOEPA), and Fair Debt Collection Practices Act. Since foreclosure can great affect a commercial property owner and his/her business, it is very important that one consults a lawyer right away regarding this matter.