Temporary Restraining Order against a mortgage company

In nonjudicial foreclosure states, mortgage companies do not have to bring a lawsuit

against homeowners in order to sell the house at a county auction. If the borrowers
believe that the foreclosure is not warranted, they will have to bring a lawsuit themselves
against the bank and prove that the house should not be sold. Obviously, this makes
defending the lawsuit impossible, as the owners would have to bring the fight into court
first and the bank would be on the defensive.

But bringing a lawsuit against a lender to stop foreclosure can be a costly and confusing
process for most homeowners. They will have to follow a number of steps just to have
the sale initially halted, and then attempt to prove that the foreclosure should not be
allowed to go forward at all. This involves bringing a lawsuit, getting a temporary
restraining order, posting a bond, getting a preliminary injunction, and finally getting a
permanent injunction against the bank. The first few steps will be examined in this
article.

This is almost certainly an area of the law in which homeowners would wish to hire an
attorney to represent them or, at the very minimum, have attorneys do research to help
them build their case. Unfortunately, though, foreclosure situations are one of the times in
most borrowers' lives where they can least afford to hire a personal lawyer. Bringing a
lawsuit initially against a bank will be an in-depth process, and doing only the first few
steps may only result in a delay of a few weeks.

To begin the lawsuit against the mortgage company, homeowners must sue both the
lender and the trustee. They must also request that a judge stop any foreclosure
proceedings until the homeowners are able to argue why they should not be allowed to go
forward at all. The first step will be to request that the court grant the owners a
Temporary Restraining Order against the lender, barring it from moving ahead with the
foreclosure.

It may be quite simple to get a Temporary Restraining Order against a mortgage

company, since the basis for granting one is that the party requesting it would suffer
"irreparable injury" if it was not granted. Losing a home to foreclosure is usually
accepted as irreparable injury to homeowners, but this action usually only puts the
foreclosure on hold for a period of a couple weeks, at most.

However, some courts may require that homeowners post a bond for the TRO to be
granted, and if the bond is prohibitively expensive, it can hurt the borrowers' chances of
getting a fair hearing in court. The bond is designed to protect the bank against economic
harm if the owners do not have any legitimate reason to request that the foreclosure be
halted, and they can be costly, in some instances.
Thankfully, homeowners who have suffered a financial hardship may be able to get the
bond requirement waived. Having low income is one convincing argument for a waiver.
But borrowers will also have to show that the lender will not suffer unreasonable harm if
the foreclosure is delayed, or if it can be protected some other way (like if the owners
make reasonable monthly payments while the lawsuit is ongoing). Also, if the validity of
the mortgage is in question, a waiver may be granted. Banks suffer no harm as a result of
the homeowners' actions if the mortgage is not valid in the first place.

Once homeowners are granted a TRO and have their bond requirement waived by the
court, the next step will be getting a preliminary injunction against the bank. If this is
granted, the homeowners may have already won the war, as the rest of the legal process
may take several years. But the final step would be to obtain a permanent injunction,
which would not allow the lender to pursue foreclosure against the house.