The Facts About the Foreclosure Process
Foreclosure is a judicial process wherein your mortgage company brings a lawsuit against you due to your failure to make your mortgage payments and/or maintain other terms and requirements of your mortgage. If the foreclosure goes through its entire process without you re-instating or bringing the mortgage current, inclusive of the new costs brought about by the lawsuit, it will ultimately end with the Court awarding the mortgage company a final judgment and your property will be sold at a judicial sale. That means, literally, that your home will be sold on the steps of the County Courthouse, to the highest bidder.
If no one bids, the mortgage company will take back the property for the figurative sum of $100.00 and then have it sold. If the property does not sell for the total amount of the final judgment, the mortgage company may seek what is called a “Deficiency Judgment” against you, wherein a judgment is given by the Court for the difference between what was owed from the Final Judgment of Foreclosure ~ and what the property actually sold for. That judgment will become a lien against you and attach to any real or personal property that you own.
Many people are concerned that the mortgage company can immediately come to their home, change the locks and throw them out on the street. THIS IS NOT TRUE! The mortgage company must file the lawsuit and go through the court process to prove their claim. You have many options available to you throughout this process:
1. |
You can attempt to work with your mortgage company to re-instate your mortgage. This means that you would need to provide the funds to bring the mortgage current, pay any late charges or other fees that your mortgage company may charge as a result of this lawsuit and pay the mortgage company’s attorney’s fees and legal costs. |
2. |
You can attempt to negotiate what is called a forbearance agreement or loan modification with your mortgage company, wherein you will be permitted to re-instate your mortgage by starting to make your payments again as well as to make additional payment(s) to pay off the additional costs as described in the paragraph above. |
3. |
You may be eligible under the new laws to seek protection under the Federal Bankruptcy Code. The Bankruptcy Court will structure a re-payment plan that you will need to adhere to. |
4. |
You can sell your home, either by yourself or with the assistance of a realtor. This must be accomplished during the time the lawsuit is still open. Once the final judgment is granted, the property will eventually be taken, usually within 2 to 3 weeks after the judgment. |
5. |
You can do nothing and just let the process continue! |
Beware! You have ventured into turbulent and “shark-infested” waters now that you are involved in a foreclosure. Often times, real estate investors, foreclosure assistance firms and scam artists will attempt to pressure you into selling your home for a fraction of its value using scare tactics or convincing you to pay them to assist you. Be vigilant with whom you work.
At NO TIME should you EVER pay anyone any money - other than an attorney - to assist you with the foreclosure. These people cannot represent you in court and they have absolutely no leverage to force or convince your mortgage company to settle with you. More often than not, they have their own agenda to get your property and have no intentions of actually helping you. Under no circumstances should you take legal advice from anyone who is not an attorney.
A Brief Summary of the Foreclosure Process
1. |
You have been notified by your mortgage company and/or their attorney that you are in default. If you have failed to correct the matter, the mortgage company will direct their attorney to file a law suit against you to foreclose the mortgage and promissory note. |
2. |
You will be served a summons that will include the lis pendens and the complaint. The lis pendens is the legal term for a pending lawsuit. This is when the clock starts ticking! |
3. |
Once you have been served with the summons and lis pendens, you have 20 calendar days to respond to the lawsuit. The response must be in an appropriate format that meets the Courts requirements. A simple letter from you explaining why you are behind in your payments and asking for time or leniency is not sufficient. |
4. |
If you do not respond or respond appropriately within the 20 days, the attorney for the mortgage company will file a motion and seek a default from the court. The court will review the motion and schedule a hearing. If the court finds the motion accurate and there are no objections, a default will be granted. This usually takes between 2 to 3 more weeks to complete. |
5. |
After the default is granted, the attorney for the mortgage company will file a motion for a summary judgment of foreclosure, wherein a request is made to the court to find for the Plaintiff (the mortgage company) and grant them the amount they are seeking, inclusive of all costs and fees incurred by the mortgage company and their attorney. The court will again review the motion and schedule a hearing. If the motion is accurate and there are no objections, a Summary Final Judgment is granted. This process may take another 1 to 3 weeks. |
| Note: Up until this point you are still permitted to re-instate the mortgage. After theSummary Judgment is granted, the mortgage company is less inclined to cooperate with you! |
6. |
Finally, the attorney will file an Affidavit of Attorney’s Fees and Costs. At the same time, the attorney will file a motion for a Final Judgment of Foreclosure. The Court will review the affidavit and the motion and schedule a hearing. If the affidavit is acceptable and the motion is accurate, the court will grant the Final Judgment of Foreclosure and close the case. This process will take another 1 to 3 weeks. |
7. |
The Clerk of Courts will then advertise your property for sale in the newspaper. After approximately 2 weeks, a public auction is held wherein your property, among others, is auctioned off to the highest bidder. If no one bids for the property, the mortgage company will take it back. |
8. |
You have 10 days after the sale to exercise what is called your Equitable Right of Redemption. This provides you with one last chance to save your property but you must pay the full amount of the Final Judgment as well as the cost of the sale. |
The average length of time for the foreclosure process to run its course after you have been served is between 90 and 110 days. During that time, what you do and how well you do it, will determine the outcome of your case. We again advise you to be careful to whom you entrust this process. If you cannot afford an attorney and chose to work with a Foreclosure Consultant or Assistance Firm, ask for references.
We enjoy an excellent reputation for honesty, ability and integrity and have a proven track record. We are happy to talk or meet with you to evaluate your foreclosure and provide you with the types of assistance we detail in our attached letter. Simply call us to set up an appointment. There are NEVER any charges for our services. |
