If you are facing a foreclosure by your lender, you might be able to save your home or at least delay the foreclosure if you can attack the affidavit or declaration used by the lender. An affidavit is used in a judicial foreclosure, while a declaration is used in a non-judicial foreclosure. A judicial foreclosure is a court proceeding, while a non-judicial foreclosure unfolds outside court. Sometimes an affidavit or declaration may be defective based on intentional fraud by the mortgage servicer, or sometimes the mortgage servicer makes a careless mistake that makes the document invalid. Defective affidavits once were a notorious issue in the mortgage industry.
Most notably, certain banks and mortgage servicers were exposed for asking their employees to sign affidavits without checking the accuracy of the information on them. The employees thus lacked the knowledge required to make the affidavits valid. As a result of cutting corners to expedite foreclosures, thousands of cases proceeded under these defective affidavits. In many cases, homeowners were charged excessive fees or improper fees, or were not given credit for all of their payments. This was known as the robosigning scandal of 2010.
Affidavits in a Judicial Foreclosure
An affidavit is a required part of a judicial foreclosure for a lender to get a final judgment. This is a statement signed under oath. You can challenge an affidavit either if the information is incorrect or if the person signing the affidavit (the affiant) does not have personal knowledge of the information stated on the affidavit. Information on an affidavit may include the balance and interest remaining on the loan, as well as the number of payments that the homeowner has missed. The affidavit also probably will state that the lender owns the mortgage and the promissory note. It will outline the fees and costs that it expects to accompany the foreclosure.
A lender should not include information in an affidavit that it cannot support with other documents and evidence. The person who signs the affidavit will be an employee of the bank or other entity that is pursuing the foreclosure. They need to have a personal reason to believe that the information in the affidavit is accurate.
Declarations in a Non-Judicial Foreclosure
A declaration plays a similar role in non-judicial foreclosures to the role of affidavits in judicial foreclosures. However, a declaration does not need to be sworn. Matters covered by the declaration often include compliance with loss mitigation requirements. This involves discussing ways that the homeowner can avoid the foreclosure, or at least making a good-faith effort to contact the homeowner. The lender will provide the declaration to the homeowner together with the notice of default.
Why Errors in Affidavits and Declarations Matter
These errors can undermine a homeowner’s ability to explore alternatives to foreclosure or reinstate their loan. A homeowner also may face improper fees and charges or an excessive or improper deficiency judgment following the foreclosure sale. This can have a lasting negative impact on their finances and credit rating. As a result, courts will review affidavits and declarations carefully if a homeowner alleges an error or flaw. You can raise a challenge to an affidavit in a judicial foreclosure process as one of your defenses in the lawsuit. If you do not challenge the affidavit, the court is not required to investigate its accuracy independently, and the issue may not be addressed. If the lender is pursuing a non-judicial foreclosure, you can challenge errors or flaws in a declaration as part of your lawsuit against the lender.