Elk Grove Village Foreclosure Defense: Does the Lender Have Standing to Sue?

According to recent foreclosure statistics, 1 in every 747 homes in the state of Illinois is undergoing foreclosure. Although a notice of foreclosure from a lender may seem like all hope is lost, there are legitimate legal defenses to a foreclosure. If you or someone you know is facing the possibility of losing a home, contact a Chicago foreclosure defense attorney today to assert your legal rights and intervene on your behalf.

Lack of Standing

A defendant attorney’s first line of defense when a client is facing the loss of a home is to challenge the lender’s right to foreclose, known in the legal field as “lack of standing.” One of the most often asserted affirmative defenses in foreclosure litigation, the legal doctrine of standing requires the party bringing suit in court to have an interest in the case or controversy. As a result, standing only permits those with an injury in fact and a legally cognizable interest – in other words, a real interest in the outcome of the case – to file a claim. In foreclosure cases, the debate between parties regarding standing revolves around whether or not the plaintiff had sufficient interest in the mortgage and note in order to initiate a lawsuit.

As a result of the mortgage backed securities dealings that occurred during our nation’s housing boom, many home loans were divided, sold, and resold by the original lending institution to other financial organizations. In order to establish standing, a plaintiff in a foreclosure proceeding must prove that it is the proper holder of the note and mortgage, which can be shown by producing the original note and mortgage. If a borrower’s mortgage loan has changed ownership since the original purchase of the home, it is more likely than not that the third party does not have the original note and/or other documentation required to prove a full and proper transfer of interest.

Burden of Proof and Timing

The burden of proof to establish that the plaintiff in a foreclosure case lacks standing to bring the suit is placed on the defendant, according to cases decided by the Illinois Supreme Court .  Moreover, the statutory form complaint used by foreclosure plaintiffs complies with Section 1504(a) of the Illinois Mortgage Foreclosure Law (IMFL) and, as such, contains all of the necessary allegations to establish standing. That being said, the Illinois Supreme Court ruled that lack of standing is an affirmative defense which means that a successful challenge to standing results in a dismissal of the case.

In addition to proving lack of standing, a foreclosure defendant must assert lack of standing and other affirmative defenses within a certain time frame during the proceeding or forfeit the ability to raise them later. In foreclosure litigation, the point in time in which a waiver of affirmative defenses by a defendant occurs is the entry of a judgment of foreclosure and sale, which occurs at the end of the proceedings.

Foreclosure Defense in Elk Grove Village

Buying a home is a large financial decision and, sometimes, life can get in the way of keeping up with mortgage payments. If you or someone you know is facing foreclosure, contact an Elk Grove Village foreclosure defense attorney today for assistance with defending your home.  A skilled and experienced foreclosure attorney can advise you about the rights and obligations associated with property ownership in Illinois. The Law Office of Gilbert C. Schumm has provided legal advice to clients regarding real estate for many years, servicing the greater Chicago areas including Elk Grove Village, Hanover Park, Hoffman Estates, Mt. Prospect and Rolling Meadows. Call (847) 559-9109 today to schedule your initial consultation.