PLEASE NOTE: the following is not intended as legal advice and is given only for example purposes only. You should consult a licensed attorney in your state to handle your foreclosure defense and offer any legal advice he or she may deem appropriate. The forms provided are for examples only and have not been tailored to any particular legal situation. You should consult a licensed attorney in your area regarding your particular legal situation. This article does not establish any attorney client relationship, and the opinions expressed in this article are those of the author and not intended as legal advice.

So you just got that knock on the door and have been served the bank's complaint against you. What should you do? Well there are three options. 1) Call a lawyer and meet with him or her to talk about your options. 2) Do nothing and hope that the bank forgets you owe them thousands of dollars. 3) Read the complaint and earnestly try to answer the banks big bunch of numbered paragraphs.

The first option should be heavily explored. There is no better way to keep your home than to talk to a bared attorney in your state that focuses on foreclosure defense. Some offer affordable payment plans that may even be cheaper than your monthly mortgage payment. I know that our firm can work out payment plans as low as $500 dollars a month with a $800 dollar set up fee. But, that is not what this article is about. If you decide to go with a law firm you should check the local and state bar for referrals, or if someone has told you about an attorney you should look the firm up on your states bar pages. Give the state bar a call you'll be glad you did.

The second option all though it sounds appealing will never work. In fact if you do nothing the bank can get what is called a default judgment against you. That judgment will allow them to take your home back in as little as 2 to 4 months depending on how backlogged your local court is. Many people I know chose this option because they were not sure that they could even stay in their home after the banks complaint was delivered to their door. Some of them told me that they feel like they were free loading by staying in their home and that the bank had every right to take it back.

I have to say that these people are dead wrong! You can stay in your home the entire time the bank is trying to foreclose on you. It is not freeloading. Look at it this way you may have put down a substantial amount of money to buy your home. In some cases up to 40% of your home's value before the bubble burst. You have no way to get that money back in a foreclosure situation save someone who will pay way more than your home is currently worth. So, you should look at staying in your home while the foreclosure process is going on as a way to recoup some of your down payment. You paid a lot of money upfront to stay in your home- you have prepaid for the time you are staying while the bank forecloses. Use that time to save up money in case you have to move.

Even if you were lucky enough to put no money down on your home because of your excellent credit you are still not a free loader. Because of what some call the bank's predatory lending practices you have no credit. Look at the time you avoid paying rent as compensation for the credit rating you lost because some banker may have intentionally over valued your home.

Further, the bank may have engaged in practices that were against state or federal law in which case they are the bad actors not you. You can even use the banks illegal activities to fight against the foreclosure process. To learn if your loan and your lender did violate the law you should get what is called a forensic audit on your loan. You need all the loan documents from closing along with all the preliminary paper work your lender or broker provided to you in order to get one of these audits done. It takes anywhere from 7 to 45 days to get one of these audits done depending on who you use to conduct the audit. In Florida, there is a company called Amstar Litigation Support, based in Sarasota Florida, that can perform these audits for a reasonable price. These guys can perform audits in many states so you may want to look them up after your done reading this article. Amstar is not the only place that performs these audits again you may want to contact your state bar for more qualified examiners.

Now we come to option three. This is what the article is all about. You may not have any money to pay a lawyer to defend your foreclosure. In which case, as we talked about above, you don't just want to do nothing. So here is what you do. First, if you have not already done so, you immediately contact a local Realtor who knows how to perform short sales in your area. You sign them up to list your home and speak to the bank about getting you approved for a short sale. If you do have some income you may want to first talk to the bank about the Making Homes Affordable Program or other such bank initiated program which allows you to modify your loan. In either case the you you immediately go to step number two.

Second, you answer the complaint. By answering the complaint you let the court know that you intend on fighting the bank's attempt to kick you out of your home. The law gives you a very limited time to answer the complaint in some states as little as 21 days. You will find out the time you have to answer by reading the Summons or first few pages of the papers that you got from the guy who knocked on your door. Another part of those papers that you received is called the Complaint. You will know it by the numbered paragraphs that it has. It may start out by saying something like"COMES NOW, Plaintiff xyz bank by and through undersigned counsel." To make it easy you just copy the heading that you see on the complaint that says something like "IN THE XX CIRCUIT COURT OF YOUR COUNTY" and lists the bank as a plaintiff and you as a defendant.

Then you just go line by line and answer the statements the bank has made in one of three ways. You can write "Affirmed" meaning what the bank is saying is true. You can write "Denied" meaning what the bank is saying is not true. And lastly you can write "Unknown and therefor denied". I would recommend reading the complaint before you start typing and placing an "A"/"D"/or "U" next to all the statements so you know ahead of time what to type in your response. You don't have to type your response or answer these three ways but it looks better and you may avoid having your response being thrown out for not answering the bank's complaint. I have seen people send a letter into the court explaining their situation as an answer. The court does not have to accept that as an answer and could strike it as a non responsive pleading. They normaly don't, but that can happen so it is easier to stick to the three responses and go line by line.

If after you marked the complaint with your three response you notice that there are a lot of the same answers line after line your can just group all the same answers that come one after the other by writing "Lines x(meaning the number of the banks statement)-y Affirmed/Denied/ or Unknown and therefor denied. For example your answer could look something like the following:

1) Lines 1-5 Affirmed:
2) Lines 5-9 Denied;
3) Line 10 Unknown;
4) Line 11 Affirmed;
5)Lines 12-24 Unknown and therefor denied.

Another way you could answer is by grouping all the bank's statements together in one line and write "Lines 1-30, Affirmed in part and Denied in part and therefor denied", or "Lines 1-34 Unknown and therefore denied." You want to keep in mind that you must answer the complaint truthfully. You may also assume that some of what they are saying is true some is false and therefor you want to deny all of what they are saying using the "Lines 1-30, Affirmed in part and Denied in part and therefor denied" example. Similarly, if you may really have no idea about what they are saying in their complaint and deny everything using the "Lines 1-34 Unknown and therefore denied" example.

I know of a person who answered the bank with a blanket response and has been in his home over 2 and a half years. Now that is not typical but it did happen and his response looked liked this:

1) Lines 1-36 Affirmed in part and Denied in part and therefor denied.

AFFIRMATIVE DEFENSES

1) Defendant and Bank are negotiating a short sale on the property and request that the court allow a reasonable time for the short sale to be approved;
2) All other Affirmative Defenses reserved pending discovery

COUNTER CLAIMS

1) All counter claims reserved pending the results of discovery.

Now, after you have answered the banks claims on the same sheet of paper you want to give your Affirmative Defenses and Your Counter Claims. Generally you will not know what these are until you enter into discovery and thus you reserve them until after you have had time to request information from the bank or get back that forensic audit you may want to order. If you do do the forensic audit and have it before you answer the bank you would want to list all the problems in the loan as affirmative defenses, and any violations of state or federal law as counter claims. You may wish to get some legal advice on the forensic audit you ordered if it is cheap enough you may want the legal advice to include a Pro Se answer to complaint. Many lawyers will look over your audit and make a response for you for as little as $250 dollars. If you don't get legal advice then you simply list all problems identified in the loan as affirmative defenses, and all violations of state and federal law as counter claims. You will also want to reserve all other affirmative defenses and counter claims. It would look something like this:

AFFIRMATIVE DEFENSES

1) Defendant and Bank are negotiating a short sale on the property and request that the court allow a reasonable time for the short sale to be approved;
2) RESPA VIOLATION
3) VIOLATION OF THE 3 DAY RIGHT OF Rescission;
4) Any other problems noted in the audit;
2) All other Affirmative Defenses reserved pending discovery

COUNTER CLAIMS
1) RESPA violation requiring penalties be applied to the lender as a matter of law;
2) All other counter claims reserved pending the results of discovery.

Once you have completed the answer you will want to write up your first request for discovery. You may want to file this with your answer or wait a while. The reason why you are asking for this information is so that you know more about what the bank did when financing your loan. By now you have heard about the famous "produce the note" discovery question. Well there are other pieces of information that can be just as important as this document which you need to get from the bank. I have attached sample responses to complaint and request for discover for you use as examples.

So, now that you have identified the three possible solutions to the dilemma of " What should I do about the papers I just got at my door," you now know a little bit about how you can fight the bank from taking your home.

SAMPLE ANSWER TO COMPLAINT

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