1. Notice of Default. The investor or the company managing the loan (the "servicer") must send you
the 30 day default notice (see above). No action can be taken until after the 30 days is gone.
2. Filing An Action In Court. The investor must have a copy of a
summons and complaint served on you, normally
by a Deputy Sheriff. You have 20 days to file an Answer with
the court if you wish to contest the foreclosure. Contact a lawyer immediately.
If you do not answer, the court clerk will enter a default judgment against you. This means that
you give up your chance to fight against the foreclosure and eventually a public sale of your
home will be scheduled.
3. Filing An Answer. To avoid an immediate "default judgment," you must file an Answer or
a letter requesting more time to file an Answer within 20 days of getting the court complaint of foreclosure.
If you do not file an Answer, you will lose your case.
If you do file an Answer and you can show the
court that there are some real factual or legal issues, you can get a hearing to decide whether the loan
is in default and how much is due to the investor. You can also raise affirmative defenses and counterclaims
against the investor for any violations of state or federal law relating to the loan.
If necessary you can file an Answer without a lawyer.
View a Sample Answer. Complete the top part of your Answer by copying information about the court
and the parties from the Compliant you received. Respond to each numbered claim in the Plaintiff’s
Complaint by admitting, denying, or stating that you do not have enough information to answer the claim.
Include any affirmative defenses that you think may apply to your case. Finally, under "Other," describe briefly any
illegal predatory lending practices that you think have occurred. See our page
Don’t Borrow Trouble!
If you choose to file an Answer without a lawyer, we advise you to file a Discovery Request
along with your Answer. This will ensure that when you are able to find a lawyer, she will have the information
she needs to help you as quickly as possible.
View a
Sample Notification of Discovery. With this document, you are asking the Plaintiff/investor to give you
copies of key documents. Without the responses to the Discovery Request, it is almost impossible
for you, or your lawyer, to figure out all of the legal defenses you may have. So it is a good idea to request these documents right away.
This will also give you or your advocate some time to evaluate and prepare your case, while the investor’s
attorney is preparing his response to the discovery request.
If you are not comfortable filing an Answer and Discovery Request without a lawyer, in order to avoid an
automatic default, you need to file something with the Court before the 20 day deadline. At the very least,
write a letter to the court explaining that you need more time to get a lawyer and to file your Answer.
Include in the letter the names of the parties, and court docket number, if you have it, so that that Court Clerk
will know which case file to attach your letter to.
You "file" your Answer and Discovery Motion or letter by mailing it to the Court or handing it to the Court Clerk.
You must send a copy to the lawyer for the investor at the same time. Usually that lawyer’s name and address
is in the bottom left corner of the Summons or on the last page of the Complaint. Keep copies for your own file.
4. Motion for Summary Judgment.
Soon after you file your Answer, the investor’s lawyer will file a Motion for Summary Judgment. You will have
21 days to file an opposition to this Motion. You should try to get legal help with drafting and filing
your response. This is complicated and very difficult to do without legal help. So make every effort possible
to find legal help right away.
If you are not able to file a good response to the Motion for Summary Judgment, then the court will
probably enter a judgment against you.
5. Trial. If you raise enough valid questions in your response, then the Court will hold a trial.
For example, the court may need to hold a trial on the issues of:
- how much you owe,
- whether you defaulted, or
- whether the investor, or another party, owes you money for violations of the law, including illegal
predatory lending practices.
6. Judgment by the Court. If you fail to answer the complaint, raise successful counterclaims
or affirmative defenses, win the motion for summary judgment, or show that you are not in default,
the court will enter a judgment of foreclosure. The judgment will state what is owed to the investor.
7. Redemption Period. If a judgment is entered against you, you will still have
a right to the property called a "right of redemption". This means that you can keep your
home by paying back the full amount of the mortgage loan, plus legal costs and fees (not just the payment arrears). The
right of redemption exists for 90 days immediately following the entry of the judgment. You have
the right to remain in your home during the 90 day redemption period.
IMPORTANT: You can file for bankruptcy at any time during the redemption period.
In fact, you have the ability to file bankruptcy and stop the sale of your home up to the actual date of the sale
of the property. However, filing for bankruptcy may or may not help you in the long run. See our page
Bankruptcy: Is It the Right Choice for You?
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You also have the right to sell the property during the redemption period. If you do this, you will
have to pay off the mortgage and any legal fees and interest. But you will be able to keep any money left over.
If you can sell the property but only for less than what is owed, you may still be able to negotiate a "short sale"
with the lawyer for the investor. If the investor agrees to a short sale, then the lender will take the
money from the sale and waive any balance still owed on the loan.
For more information about "workouts" with your investor or other options see our page
Can I Save My Home from Foreclosure?.
Also review our Don’t Borrow Trouble! page
if you are considering a refinance of your mortgage.
CAUTION: Don’t fall for a foreclosure rescue scam. It is often around this time that you may get
"foreclosure rescue" offers. People may call you or knock on your door and offer to save your home from
foreclosure. Selling your home at close to fair market value is almost always a better option than a
foreclosure rescue. A sale will allow you to get back the equity portion of the payments you have made.
In most cases, promises to save your home from foreclosure will put your home investment into the hands
of the "rescuer," and you will end up being evicted from your home anyway, with nothing left.
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8. Public Sale/Eviction. If you do not "redeem" the property within
the redemption period, you will not own the property any more. When the redemption period ends, you can be
evicted by the investor in a very short time frame (48 hours) and there will likely be no further court
hearings before this happens. The investor is entitled to possession of the property regardless of how much,
or little, you still owe; the time of the year; or any other reason.
The investor will hold a public sale of the property. After the money from the sale has been received,
the lender
will pay off the mortgage loan balance. Any remaining sales proceeds will be paid to any other lienholders
or to you, as the court will instruct the lender. If,
however, the sale price is less than the amount owed to the investor, the investor may be able to hold
you responsible for the difference.
9. Report Of Sale. After the sale, the investor must file with the court
a "Report of Sale," explaining how the money from the sale of the property was
received and how the lender proposes to spend it. The lender must send a copy of the
"Report of Sale" to you, at your last
known address. To be sure you get this report, leave a new forwarding address with the
post office, the court clerk, the investor's lawyer, or all three. When you receive the notice,
you can object to how the money from the sale is to be distributed, but not to the sale itself.
More information: Foreclosure Prevention Toolkit
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Notice
© Pine Tree
Legal Assistance
September 2007
Sometimes the laws
change. We cannot promise that this information is always
up-to-date and correct. If the date above is not this year,
call us to see if there is an update.
We provide this
information as a public service. It is not legal advice.
By sending you this information, we are not acting as your lawyer.
Always consult a lawyer, if you can, before taking legal action.
Please review our full terms-of-use agreement
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