When a homeowner defaults on their mortgage, their lender will initiate a legal process called foreclosure. This action will lead to your home being sold to help pay off the debt you still have outstanding on your loan. Depending on the state you’re in, the bank will approach this situation in one of two primary ways:
- File suit in court to foreclose on your home (judicial foreclosure), or,
- Foreclose on your home through procedures outside of the courtroom in accordance with state statutes governing the loan (nonjudicial foreclosure)
Judicial foreclosures can sometimes result in a summary judgment against you. In this situation, a bank can ask for the court to rule in their favor following your official response to their suit. A judge will consider granting this request and allow the foreclosure sale to proceed if your answer doesn’t raise a valid defense or issues with the plaintiff’s action against you.
How Lenders Win Summary Judgments in Judicial Foreclosures
Typically, to begin a judicial foreclosure, your bank will file a petition or complaint with the court, which in turn schedules a hearing and has you served with a summons to respond to the allegations of default. You have exactly 20 days to formally answer this action in writing. Any response you return must have legally recognized defenses to their suit or raise legitimate issues with their actions against you. For example, maybe you never received the required Notice of Default, or you’ve recently experienced a significant financial change that requires you to get a loan modification.
If you don’t submit a reply to the court, your mortgage lender will likely ask for a default judgment. Should the court grant it, the bank can sell your home and anything else it asks for, including a deficiency judgment where you pay back the difference between the selling price and the debt owed.
There are only two options the court has to decide between at a judicial hearing::
- Grant the foreclosure sale of your home, or,
- Dismiss the case against you without prejudice.
Keep in mind that if the case is dismissed, the bank can still refile against you in the future at any time. So this isn’t a criminal case where you have double jeopardy protections.
The Basics of a Nonjudicial Foreclosure
Typically, when a bank pursues a nonjudicial foreclosure, you’ll never contact the court system over the matter. This means you won’t be able to formally answer to a court why their action against you is unjust. But, they won’t be able to request a summary judgment either.
Below are the steps your mortgage lender must complete to hold a foreclosure sale of your home:
- Send you a foreclosure notice
- Publishing a notice of the foreclosure sale in local papers
- Posting the information about the sale at your home
To fight this process, you have to take your bank to court by filing a lawsuit. Remember, nonjudicial foreclosure processes happen rapidly, so as soon as you get a notice that they plan to foreclose, you need to contact a skilled foreclosure defense attorney right away.
Defending against Foreclosure and Finding Loss Mitigation Support
Suppose you’ve received a notice of foreclosure, whether, through a judicial or nonjudicial process, you need to take immediate action to protect your home and your credit. It’s wise to speak with a defense attorney whose primary practice focus is real estate law in your state. With their guidance, you may be able to get a temporary restraining order against the bank if they’ve taken illegal steps to take your home.
Also, consider speaking with a housing counselor through the Department of Housing and Urban Development (HUD). They have free and low-cost advisors available to go over loss mitigation options with you. It’s best to use these resources before your mortgage is severely past due. In addition, your bank will likely be more open to working with you to keep your home.
Get More Information About Fighting Foreclosure Proceedings in South Florida
Deciding to walk away from a property you’ve built a life in is an emotional process, and with the proper legal guidance and representation, you may not have to. To ensure that you choose the best approach to avoid foreclosure, make sure you have aggressive legal representation.
Attorney Marc Brown provides high-quality legal services based on his decade representing lenders throughout the South Florida area. His unique insight into how banks pursue foreclosure makes him your premier choice for legal counsel in this area of law. To schedule a no-cost legal consultation regarding foreclosures and deficiency judgments, reach out to the law offices of Marc Brown