Temporary Restraining Orders & Preliminary Injunction can stop foreclosure
January 13, 2011 Leave a comment
In last month’s segment of “Legal Forum” on KSCI-TV, I discussed two types of legal proceedings that are used to help homeowners in foreclosure. Temporary Restraining Orders and Preliminary Injunction. Here is the transcript of the interview:
TEMPORARY RESTRAINING ORDER (TRO) –
This is a legal proceeding that requires filing a lawsuit, then (usually) simultaneously filing an ex parte (emergency) application for a TRO to stop a foreclosure sale.
- In order to be successful, we must convince a judge that “irreparable harm” will result to our client if the foreclosure sale is not stopped.
- “Irreparable harm” is a legal concept that means damage sustained by a person that cannot be easily calculated. An example would be the loss of a home, or any other real estate, which under the law is considered unique and not replaceable.
- So, if the court is convinced that we have strong enough evidence to grant a TRO, then a TRO would be granted for a period of up to 22 days. All foreclosure and collection activity has to stop for this time period.
- Before that time period expires, there will be a second hearing to hear the arguments of both sides about whether the TRO will be extended beyond the initial period of up to 22 days, all the way up to trial, which could be about one year away. A court order to extend the TRO pending trial is called a Preliminary Injunction.
To successfully obtain a preliminary injunction, we have to prove that our client is likely to win at trial. In addition, the court balances the harm resulting to the homeowner if the injunction is not granted, versus the harm to the bank if the injunction is granted.
- A Preliminary Injunction means that the bank cannot foreclose on a homeowner until after all of the legal issues are fully decided after a full-blown court or jury trial, usually about one year after filing the case.
- This can be a very powerful weapon for the homeowner, and is a good incentive for banks to come to the table to make a meaningful settlement offer. Tying the property up in court means that banks are unable to sell the property to recover their money. It increases the severity of the bank’s losses on that particular property and makes a settlement more likely.
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