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1.2.6 Analyze the Foreclosure for Procedural Defenses

Borrowers may have defenses to foreclosure where the servicer14 has not complied with procedures required under state and federal law. In many cases, procedural defects may bar a pending sale and require the servicer to reinitiate the foreclosure process. While this may not provide a permanent solution, it gives borrowers more time to mount a defense or find alternative housing.

When examining the sale for procedural defects, ask:

  • Does the entity attempting to foreclose have authority to enforce the payment obligation? Generally, the party that possesses the right to collect upon the note has authority to foreclose on the mortgage or deed of trust. In most jurisdictions, this means the party entitled under U.C.C. § 3-301 to enforce the negotiable note that the mortgage secures. See Chapters 2, 3, and 4, infra.
  • Is the foreclosure taking place within the applicable statute of limitations? Most states set a fixed time after loan acceleration or maturity of a mortgage for the commencement of a foreclosure. These time limitations apply whether the enforcement is by judicial procedures or non-judicial execution of a power of sale. See § 5.3, infra.
  • Has the servicer waived the right to require that payments be made on time by accepting late payments in the past? See § 5.6, infra.
  • Is the servicer improperly attempting to enforce a due on sale provision? See § 5.10, infra.
  • Has the servicer failed to comply with notice requirements of state foreclosure law? Statutory pre-foreclosure notice requirements, as well as contractual terms, must often be strictly followed. Notice requirements may apply to acceleration, the right to cure, the availability of loss mitigation reviews, and scheduling a sale. Statutes and the loan documents set time frames for the notices and describe to whom they must be sent. In non-judicial foreclosures, notices of substitution of a trustee, default, and sale must typically be recorded and often must be served on the borrower. These notices should correctly identify the entity that has authority to take the action. See § 5.5.2, infra. The notices should not only be timely given, but they should not misrepresent material facts about the foreclosure.
  • Has the servicer complied with other requirements of state foreclosure statutes? Beyond notices, state statutes often set other procedural and timing requirements for foreclosure actions, including for filing documents in courts and in land records, advertising the sale, and claiming a deficiency. Appendix E, infra, summarizes the procedures of each of the fifty states and the District of Columbia.
  • Did the servicer initiate a foreclosure proceeding without first sending an early intervention letter and without waiting until the borrower was more than 120 days delinquent, as required by regulations under the Real Estate Settlement Procedures Act? See Mortgage Servicing and Loan Modifications §§ 3.7, 3.8.7 (2019), updated at
  • Did the servicer initiate or proceed with a foreclosure while the borrower was being evaluated for a loss mitigation option or while appealing the servicer’s loan modification application? Regulations under the Real Estate Settlement Procedures Act apply restrictions to servicer’s “dual tracking” practices. See Mortgage Servicing and Loan Modifications § 3.8.7 (2019), updated at
  • Is the servicer complying with the state foreclosure mediation program requirements? See § 5.13, infra.
  • Is the borrower a servicemember entitled to protection under the Servicemembers Civil Relief Act? See § 5.14, infra.


  • 14 {10} Typically the servicer prosecutes foreclosure actions on behalf of the current holder.