When a lender forecloses illegally — without proper notice, without
standing, or in violation of law — you can sue for wrongful foreclosure.
Learn the grounds, damages, and how to use this claim.
Wrongful foreclosure occurs when a lender forecloses in violation of law
or the mortgage contract. Common grounds include: foreclosing without
proper authority or standing, foreclosing when the loan is not actually
in default, failing to comply with pre-foreclosure notice requirements,
foreclosing in violation of bankruptcy stay, or conducting the sale with
procedural defects.
Key Grounds for Wrongful Foreclosure Claims
Lack of Standing: The foreclosing party cannot
prove it owns or holds the note
No Default: The loan was current or the default
amount was incorrect
Procedural Defects: Improper notice, failure to
post/publish, or other statutory violations
Dual Tracking: Foreclosing while a complete
modification application was pending
Bankruptcy Stay Violation: Foreclosing after a
bankruptcy filing triggered the automatic stay
Damages Available for Wrongful Foreclosure
Wrongful foreclosure claims can recover: (1) the fair market value of
the property if the sale cannot be set aside, (2) emotional distress
damages in some jurisdictions, (3) punitive damages for egregious lender
conduct, (4) attorney's fees, and (5) in some cases, treble damages
under state consumer protection statutes. A successful wrongful
foreclosure claim transforms the homeowner from defendant to plaintiff
with significant settlement leverage.
Wrongful Foreclosure FAQs
Yes. You do not need to wait until after the sale. If the lender
is proceeding with a foreclosure that is procedurally defective or
legally improper, you can file a pre-sale lawsuit seeking an
injunction to stop the sale and damages for the wrongful conduct.
Pre-sale intervention is always better than post-sale remedies.
Lack of standing — the foreclosing entity cannot produce the
original promissory note or properly demonstrate the chain of
assignment. This became especially prevalent during the
"robo-signing" era and remains a viable defense today. The
foreclosing party must prove it has the legal right to foreclose.
Failure to do so can result in dismissal.
Is Your Foreclosure Wrongful?
If the lender violated the law or the mortgage contract, you may have a
powerful claim. Get a free evaluation.
