How to Fight a Foreclosure in Court: Nonjudicial Foreclosure

To get your day in court to challenge a nonjudicial foreclosure, you must file a lawsuit against the foreclosing party. In the lawsuit, you ask the court to enjoin (stop) the foreclosure proceedings until a judge can hear your reasons why the foreclosure shouldn't proceed.

With this kind of lawsuit, you typically ask the court for three things, in this order:

• a temporary restraining order
• a preliminary injunction, and
• a permanent injunction.

Your application for a temporary restraining order (TRO) must convince the judge that you will suffer "irreparable injury" if the judge doesn't stop the foreclosure immediately. Because you will lose your home if the foreclosure is allowed to proceed, most courts accept that a foreclosure causes irreparable injury.

TROs are typically granted without a formal notice or hearing, meaning the foreclosing party might have only a day or two of notice to prepare a response. If no response is filed, the judge might grant the TRO but require you to post a bond to protect the foreclosing party from economic harm if you lose the case. A bond can be costly, assuming you can get one at all.

You might be able to get the bond requirement waived if your income is low enough. The court may grant a waiver if any of the following is true:

• The delay required by the lawsuit will not cause unreasonable harm to the foreclosing party.
• The validity of your mortgage is in question.
• The foreclosing party's interest in pushing ahead with the foreclosure can be protected by some other method, such as by requiring you to make reasonable monthly payments during the lawsuit.

Whether or not you'll be able to get the bond requirement waived depends largely on if the court believes your claims have any merit.

The TRO will typically last until the date set for a hearing on whether the court should issue a preliminary injunction—which would stop the foreclosure until a full trial on the matter can happen.

Preliminary Injunction

The court will review each party's paperwork at the preliminary injunction hearing. At this hearing, the court must decide whether:

• you are likely to prevail if the case proceeds to trial, and
• the injury you would suffer from the foreclosure outweighs the injury that the foreclosing party is suffering by not getting paid (called "balancing the equities").

If the judge decides these issues in favor of the foreclosing party, the TRO will end, and your motion for a preliminary injunction will be denied. While you're technically allowed to continue with your lawsuit, the foreclosure will likely proceed in the absence of a preliminary injunction. Your only remedy at this point—and it's a considerable long shot—would be to ask a higher court for an order (called a "writ") overruling the lower court's denial of the preliminary injunction.

But if the judge decides these issues in your favor, then the judge will issue a preliminary injunction. The preliminary injunction may order the foreclosing party to take corrective action—for example, by issuing a new payoff statement and giving you a chance to reinstate the mortgage. Or it might simply keep the TRO in effect.

Permanent Injunction

Because it often takes a very long time to bring a case to trial on a permanent injunction, getting a preliminary injunction is pretty much equivalent to a victory for you. Typically, the foreclosing party will either attempt to reach a settlement with you, like by giving you a loan modification, drop the current foreclosure and begin from scratch, or meet any conditions laid down by the court and then go back into court to ask that the injunction be lifted.