Understand the Process

• The foreclosure process varies state to state but is done either through a judicial or nonjudicial process. In the judicial process, the lender brings a lawsuit against the borrower. In this process, the burden of proof is on the lender and the borrower has the right and opportunity to put up a defense in front of a judge. In the nonjudicial process, the lender has only to record, post and/or publish a series of notices. Here, the borrower has neither the right nor opportunity to put up a defense. Instead, a borrower foreclosed upon by a nonjudicial process must himself file a lawsuit against the lender to stop or reverse a foreclosure and the burden of proof will rest with him.
  
  

Understand the Trend

• The term "shadow inventory" started showing up in real estate literature around 2009. By 2011 it was showing up everywhere. Shadow inventory is loosely defined as properties that are delinquent or in foreclosure, often languishing in the pipeline instead of moving forward in the process. The reasons the shadow inventory increased and the number of completed foreclosures moved along slowly is because lenders failed at completing and keeping track of mortgage and foreclosure paperwork and borrowers have increasingly fought the foreclosure process. The trend provided borrowers with an arsenal of information and precedent to successfully delay or stop foreclosures.
  
  

Consider Defenses

• Whether you are responding to a foreclosure suit filed by a lender or have to file your own suit, consider as many lines to defense as you can muster. A common theme among foreclosures denied in court is that the foreclosing lender didn't own or couldn't prove they owned the loan -- the promissory note was missing or the affidavits presented in court used a "robo signer," which is someone with no knowledge of the mortgage who signed hundreds or thousands of documents without reading them. The Nolo website recommends looking at the foreclosure steps taken by the lender because they must conform to state procedures. Unconscionable loan terms and errors in accounting round out the list of common defenses.
  
  

Press for a Modification

• Even if you succeed in delaying or outright winning the foreclosure case, nothing prevents the lender from starting the process all over again. Use the delay or intervening time between suits to contact your lender about a loan modification. They may not want to drop the case because it sets a bad precedent for other delinquent borrowers but they may not want to appear before a judge again, either. A loan modification is as close to a win-win as the situation offers.