Foreclosure Defenses: Defective Affidavits and Declarations

If you're in foreclosure, you might be able to fight back if the foreclosing party used defective or faulty affidavits or declarations in its case against you.

Generally, when people think of defective foreclosure affidavits, the first thing that comes to mind is the robosigning scandal where mortgage servicers filed thousands of unverified, fraudulent affidavits in judicial foreclosures. But, defective declarations—which are similar to affidavits—can be an issue in nonjudicial foreclosures as well.

Read on to learn what foreclosure affidavits and declarations are, why they're important, and how to fight the foreclosure if you suspect a faulty affidavit or declaration is being used in your case.

Judicial Foreclosure Affidavits

Typically, in a judicial foreclosure, the owner of the loan (the foreclosing party) must complete a written statement signed under oath, which is called an affidavit, to get a final judgment of foreclosure.

The affidavit usually includes information like:

• the number of months the homeowner is behind in payments
• that the lender owns the mortgage/note
• the fees and costs of the foreclosure
• the amount of interest owed, and
• the principal balance of the loan.

The information in the affidavit is supposed to be truthful, accurate, and adequately supported by file documentation. A person, usually a bank employee, reviews the loan documents (so he or she has some personal basis for believing the facts contained in the affidavit are true) and signs the affidavit. At least, that’s how it is supposed to work.

The Robosigning Scandal

In 2010, it was revealed that several large banks and loan servicers routinely used affidavits signed by employees who did not personally check the documents for accuracy and did not possess the level of knowledge of the information that they attested to in those affidavits. So-called “robosigners” signed thousands of affidavits each month, spending about 30 seconds on each affidavit, without ever reading or verifying the information contained in the affidavit. They did this in order to complete the process—and the foreclosure—as quickly as possible.

This resulted in defective affidavits being filed in thousands of foreclosures. For example, affidavits contained discrepancies between actual fees charged and what the servicers' internal records indicated, as well as included unallowable fees and excessive monthly charges, among other things.

If the affidavit a bank submits is false—either because the affiant (the signer) does not have personal knowledge of the facts and figures contained in the affidavit, or because the affidavit contains incorrect information—the foreclosure should not go through. (Read more about the robosigning scandal.)

Declarations in Nonjudicial Foreclosures

Some states require certain declarations, which are similar to affidavits, in nonjudicial foreclosures. A declaration is a formal statement of facts concerning the case. But unlike an affidavit, it is unsworn.

In a California or Washington foreclosure, for example, the lender or servicer has to complete a loss mitigation (foreclosure avoidance) declaration as part of the nonjudicial foreclosure process. The foreclosure can't start—either by the issuance of a notice of default (Washington) or recording a notice of default (California)—until the lender or servicer has:

• personally contacted the homeowner to discuss options to avoid foreclosure, or
• has met the due diligence requirements for attempting to contact the homeowner.

When the foreclosure starts, the lender or servicer must include a declaration along with the notice of default that it has complied with these requirements. (To get an overview of the foreclosure laws in your state and find out if your state ordinarily uses a judicial or nonjudicial foreclosure process, see our Key Aspects of State Foreclosure Law: 50-State Chart.)

Harms Caused By Defective Affidavits and Declarations

A foreclosure that is based on inaccurate documentation can potentially:

• make it more difficult for a homeowner to bring his or her loan current (called "reinstating" the loan)
• curtail a homeowner’s loss mitigation efforts
• result in inaccurate fees and charges assessed against the homeowner, and/or
• lead to an incorrect deficiency judgment amount being entered against the homeowner.

Affidavits and declarations are used to support the foreclosure case. If an affidavit or declaration is inaccurate, false, or defective, the foreclosure should not be allowed to move forward.

Fighting the Foreclosure

If you believe the affidavit or declaration being used in your foreclosure is flawed and want to challenge it, the way you go about fighting the foreclosure depends on whether the process is judicial or nonjudicial.

Judicial foreclosure. In a judicial foreclosure, the bank files a lawsuit in state court. You'll receive a foreclosure complaint, petition, or similar document, along with a summons. In this type of foreclosure, you can bring up the matter as part of that lawsuit. (To learn more, read our article How to Fight a Foreclosure in Court: Judicial Foreclosure.)

Nonjudicial foreclosure. With a nonjudicial foreclosure, the bank can foreclose without going to court. So, you'll need to file your own lawsuit to bring up this issue. (To learn more, read our article How to Fight a Foreclosure in Court: Nonjudicial Foreclosure.)

(For more information about the difference between judicial and nonjudicial foreclosures, and the procedures for each, see Will Your Foreclosure Take Place In or Out of Court?)

When to Hire an Attorney

If you are facing foreclosure and think that there's a defective affidavit or declaration in your case, you should speak to a qualified attorney who can advise you about what to do in your circumstances.

Any given foreclosure or legal situation has many potential claims and defenses. It is recommended that you seek the advice of local counsel or a legal aid organization to explore all possible defenses that might be available in your particular situation.