Can Filing an Injunction Stop a Foreclosure?

A judge can order a foreclosure to stop.

An injunction is a court order enjoining, or prohibiting, one of the lawsuit parties from taking a certain action. A court can issue an injunction enjoining a mortgage lender from proceeding with foreclosure. However, because of some technical legal requirements relating to injunctions, actually obtaining an injunction to stop a foreclosure is easier said than done. Unlike filing for bankruptcy, the filing of a request for an injunction does not automatically stop a foreclosure. The court must actually issue an injunction before the foreclosing lender must stop.

Temporary Restraining Order

Injunctions come in three different types, including a temporary restraining order (TRO), a preliminary injunction, and a permanent injunction. The purpose of a TRO is to prevent immediate and irreparable harm. A TRO can be granted without notice to the opposing party, but generally lasts for only 10 days. Before the 10 days expire, the TRO must be converted to a preliminary injunction. So a TRO can stop a foreclosure, but only for 10 days.

Preliminary Injunction

The purpose of a preliminary injunction is to preserve the status quo until a court can hear a full trial on the legal dispute. To obtain a preliminary injunction, the requesting party must show that it is likely to win at trial and that it will suffer irreparable harm if the preliminary injunction does not issue. A preliminary injunction will delay, but not permanently prevent, foreclosure. The preliminary injunction expires after a trial on the merits of the case.

Permanent Injunction

A permanent injunction will only issue if there is no other adequate legal remedy available to the party making the request. Generally, the law's preferred legal remedy is the payment of monetary damages. But, if for some distinguishing reason the payment of monetary damages will not provide adequate compensation, then the court can issue a permanent injunction. In reality, the only reason a permanent injunction might issue against a foreclosing mortgage lender is if the lender actually does not have a valid lien on which to foreclose.

Underlying Claim

Obtaining an injunction of any kind requires some type of underlying legal claim. It may be a breach of contract, promissory estoppel, or declaratory judgment action. Whatever it is, an injunction will only issue if necessary to prevent irreparable harm. Fortunately, the law generally assumes that the loss of a home or other real property is irreparable harm because each piece of real estate is unique and because it requires uprooting family and children. Ultimately, though, obtaining an injunction to stop foreclosure is an uphill battle that will require creative and complex legal arguments.

References

• Cornell University Law School: Federal Rule of Civil Procedure 65: Injunctions and Restraining Orders
• "Real Estate Finance Law"; Grant S. Nelson and Dale A. Whitman; 2008