The Foreclosure Defense of Violations of HUD Regulations

In Hayes v. M & T Mortgage Corporation, a recent Illinois case, the foreclosure defense of HUD regulation violations was discussed. The court held that although the violation of HUD regulations can be a defense to foreclosure it was not grounds for dismissing the foreclosure. In Hayes, the mortgagor filed suit alleging that the lender violated HUD regulations when handling her FHA loan. The lender counterclaimed for foreclosure and the mortgagor moved to dismiss on the grounds of the HUD violations. The court held that compliance is not a condition precedent, or necessary requirement, to a foreclosure because the Illinois Mortgage Foreclosure Law does not require a lender to state in a foreclosure complaint that it has complied with HUD regulations. Further, the court held that HUD regulations “do not control directly the relationship between the mortgagor and mortgagee and may not be invoked by the mortgagor as a sword in an offensive cause of action against the mortgagee.” 906 N.E.2d at 642, quoting Wells Fargo Home Mortgage, Inc. v. Neal, 398 Md. 705, 922 A.2d 538, 546 (2007). The court noted that violations of applicable HUD regulations is a valid defense to a foreclosure of a federally insured mortgage. In Ms. Hayes’ case, the court held that the loan documents did not intend to incorporate the HUD regulations in their entirety into the mortgage terms. Hayes v. M & T Mortgage Corporation, 389 Ill.App.3d 388, 906 N.E.2d 638, 329 Ill. Dec. 440 (1st Dist.), appeal denied, 233 Ill.2d 556 (2009).

Recent Post

Order of Protection for Domestic Violence

Unfortunately, some Chicago divorces or Chicago child custody disputes involve domestic violence. When domestic violence, or the threat of domestic violence, occurs a victim may petition the court for an order of protection. An order of protection is a court order...

Key Differences Between Illinois Prenups and Post-nups

Illinois Premarital Agreements Most people have heard of premarital agreements (often referred to as "prenups").  The law defines prenups as contracts drafted and signed by a couple prior to their marriage.  Illinois has a statute, known as the Illinois Uniform...

Divorced Parents Disagree over Covid Vaccines

Now that Covid vaccines are approved for children that are 12 years of age and older, some Chicago divorced parents disagree over Covid vaccines. Specifically, some divorced parents disagree as to whether their children should receive the vaccine.  Some parents...

5 Common Divorce Myths You Might Believe Too

Too often, when contemplating divorce, people believe some common divorce myths that are seemingly based on common sense.  However, the facts are often different than what people think.  It can be detrimental to your case if you enter into divorce proceedings without...

categories

If you are looking for legal advice and representation with an Illinois divorce, schedule a consultation with experienced Chicago divorce attorney, Tanya Witt, at (312) 500-5400 or info@thewittlawfirm.com.

Representing men and women in Chicago divorce and child custody cases.

This blog does not constitute legal advice. Please consult with an attorney regarding your specific case.