How do I know if a foreclosure is wrongful?

You can sue and stop a wrongful foreclosure. Foreclosure is regulated by state law. The lender wanting to foreclose on your home must follow the foreclosure procedures provided by the state law. While the exact procedure for foreclosure varies from state to state, in all states the lender must give you a written notice of its intention to foreclose. The notice must also inform you that you can pay the amount in default and prevent the foreclosure. Even if the lender takes possession of the home, you can still reinstate the loan. The foreclosure sale must be advertised as required by state law.

The lender must have the right to foreclosure. The loan processing company might be different from your original lender. It is only the lender who can foreclose. If your lender has sold the note to another lender, the second later must provide proof of its eligibility to foreclose under the note if questioned.

The lender must record a copy of the notice of intention to foreclose with the County Recorders Office. Ninety days after this notice is recorded, the trustee will publish the notice of sale. This notice of sale must be simultaneously filed with the County Recorders Office. The auction is held twenty days after the filing of the sale notice with the County Recorders Office. The home must be sold at a public auction to the highest bidder. The auction must be held between 9:00 a.m. and 5:00 p.m. on any business day, Monday through Friday, at the time specified in the notice of trustee sale.

The lender must approach the court for an order of foreclosure if the deed of trust does not grant the lender the power to foreclose.

If the lender does not follow the procedures required by law, then the foreclosure is wrongful and you can apply to the court to have it stopped. An experienced foreclosure attorney can assist you stop a wrongful foreclosure.