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 and Discovery Request. 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.
- Add 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! to learn more about predatory lending.
- Date and sign your Answer, and add your contact information.
- Sign and date again, certifying that you mailed a copy to the Plaintiff's lawyer.
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 Request, 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.
Filing Late Answer: If you missed the 20 day deadline
but you have not yet been "defaulted" by the court, you can try
to get the court to accept a late answer. We have attached a sample of a
Request to File Late
Answer. You can file this with your Answer and Discovery Request. The
Court does not have to accept a late answer but may do so if you offer a
good reason for being late.
4. Motion for Summary Judgment. After you file your Answer, the
investor's lawyer will probably 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.
We have attached a sample Motion
to Enlarge Time. If you need more time to get legal
help (beyond the 21 day deadline), you may be able to avoid a "default"
order by filing this motion. But move as quickly as you can. The Court needs
to move cases along so will not always grant more time.
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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Negotiate with the Investor: During the redemption period
you can still try to negotiate an affordable repayment plan or loan modification.
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. Be careful! Many companies are jumping into
the "short sales" market. Some demand a fee up front. Short sales
are not always the best solution. Make sure you consider your goals and
all your options before selling your home for less than what is owed. Also,
there is no reason to pay a fee up front. Most reputable real estate brokers
will help you arrange a short sale for free. They will collect their fee
out of the sale price - not from you. If the investor agrees to a short
sale, then he will take the money from the sale and waive any balance still
owed on the loan. There may be tax consequences if you follow this option.
CAUTION: Don't fall for a foreclosure rescue scam.
And, again, don’t be pressed into a short sale until you have
considered all of your options and decided which one best meets your
goals. 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. Negotiating a workout or
selling your home at close to fair market value is
almost always a better option than a foreclosure rescue.
A sale may allow you to save the equity in your home. 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. Read more in our pamphlet:
Foreclosure
Rescue Scams - Just Say "No!"
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For more information about “workouts” with your investor or
your other options see our pamphlet: Can
I Save My Home from Foreclosure? Also review our Don’t
Borrow Trouble! pamphlet before refinancing your mortgage.
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 receiving the money from the sale,
the investor
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 investor. 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 investor proposes to spend it. The investor 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
May 2009
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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Beginning Jan. 1, 2010,
all Maine District Courts will be offering a new mediation program. This gives debtors the chance
to sit down with their lender at the beginning of the court foreclosure process, to see if
they can reach an agreement. 
