A client may have different goals that will affect your case strategy (or whether to take the case!)

The client wants to keep the house and pay for it. The client may want to live in it as the family home or to rent it for the income. The client may want to do this either by having the payment of arrearages be forgiven or postponed and the monthly note payments lowered or else by catching up on the arrearages and beginning to make the contractual payments again.

The client wants to keep the house but doesn’t want to pay for it. Such clients often make assertions about “sovereign citizens,” “dollar not backed by gold,” or some other unfounded legal theory that they read about on the Internet. Some clients are also under the mistaken impression that if the mortgage servicer cannot provide the original, signed promissory note that it cannot enforce the mortgage and that therefore no payments are due.

The client does not want to keep the house but wants to avoid further liability. Such liability might be the danger of a deficiency judgment, property tax liability, tort liability of an owner under the Louisiana Civil Code, or liability for condition of property under parish or city zoning laws and ordinances.

The client does not want to keep the house but needs time. The client might need time to move (e.g., to find another place to live, obtain money for a deposit on a new dwelling and moving expenses (“Cash for Keys”)), to sell and thereby recover equity and/or avoid a possible deficiency judgment, to find employment or a better job, to collect an inheritance, to settle a personal injury lawsuit, or to win the Powerball. The extent to which the goal relies on future expectations may require the lawyer to provide realistic advice.

Once you have determined the client’s goals, the next step in defending a foreclosure lawsuit is to learn why the debtor fell behind on the note and to determine whether the debtor is or will soon be able to catch up on the missed payments and maintain all future payments that come due. Possible causes of default include:

Financial Irresponsibility. The client has the income and cash flow to pay the monthly note under its original terms but has chosen to spend the money on something else. Such clients may be living beyond their means and be overextended or suffer from poor money management and failure to prioritize their debt.

Temporary Hard Times. Determine if the problems have resolved themselves such that the client can now make payment on the note under its original terms. Possible causes of temporary inability to keep up with mortgage payments include (1) business closure, loss of hours, unemployment; (2) illness or health issues, medical expenses; (3) divorce or separation, family issues; or (4) other personal problems.

Permanent Hard Times. It may be that the client’s situation will never get better and payment of the note under its original terms is impossible. Possible causes may include (1) permanent functional disability; (2) terminal illness or an incurable condition; (3) advanced age; (4) lack of education or marketable skills; (5) loss of spousal income, including Social Security or other government benefits; (6) loss of dependent income, such as child support; and (7) monthly payments that have become unaffordable because an adjusted-rate mortgage has adjusted higher or the rising costs of homeowners or flood insurance.

Addiction. A true addiction must almost always be resolved or else satisfying the addiction will always come before saving the house. Addictions may be to substances (e.g., alcohol, drugs) or experiences (e.g., gambling, shopping).

When evaluating a case, you must determine the client’s current and projected financial condition. Good practice demands that the attorney require the client to fill out, in the client’s own handwriting, a complete and accurate listing of assets and debts and a complete and accurate listing of income and expenses. Many clients have no idea how much they’re actually spending.

Determine whether the client will be able to keep up with all future monthly payments due under the mortgage as well as homeowners and flood insurance payments and taxes. If not, defending the foreclosure suit may not genuinely be in the client’s best interest. You should also consider whether the client is capable of meeting the other responsibilities of homeownership including maintenance, repairs, eventual replacement of roof, heating, air conditioning, plumbing, painting, etc.

The only essential documents that must be reviewed at initial intake are those contained in the actual court record. Whether the foreclosure lawsuit is filed by ordinary or executory process, the court record should contain the original or certified copies of the note, the mortgage, all assignments, and sheriff’s returns showing personal or domiciliary service of the pleadings on the parties.

In a foreclosure suit filed utilizing executory process, there is no citation. Only the notice of seizure must be served on a defendant, and if the sale is being made with appraisal, the notice to appoint appraiser must also be served. The original petition with exhibits is not required to be served on the defendant, and it must be reviewed on the court’s website or at the courthouse.

When determining whether to litigate, ask whether there are any defenses apparent on the face of the record.

• Does the court have jurisdiction and is venue proper? This is not a problem if the lawsuit is brought in the state judicial district court in the parish where the property is located.
• If the lawsuit is brought using executory process, is there an act importing a confession of judgment and is the necessary authentic evidence submitted with the petition in accordance with the La . C.C.P. art. 2635?

Also consider whether the homeowner has a genuine defense that will result in a dismissal of the lawsuit with prejudice. Examples include (1) extinguishment by payment or prescription of the debt secured by the mortgage; (2) prematurity or an attempt to enforce a debt not yet due; (3) a forged instrument or signature, obtained through, fraud, violence, or other unlawful means; and (4) compensation/offset of a liquidated claim against the seizing creditor.