Hello, I'm Karla Mitchell. Going through a legal case can be very expensive and challenging. I won't go into details, but I recently underwent my own legal battle that lasted several years. It is finally over and I successfully received a settlement, but I had to spend so much time studying law in order to play my role in my own court case. While I found a great attorney at one point, I felt completely lost initially and I don't want anyone else to experience the same thing. So I decided to create this blog for those who would like to know more about law.
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If your mortgage lender has recently been granted a foreclosure judgment against you, you've likely already begun the process of searching for a new home or apartment in anticipation of your home being sold at auction. Once you vacate your home, you may assume the sheriff's sale has been scheduled and begin to put the entire process behind you. However, in some cases, your mortgage lender may not immediately proceed to sale after a judgment. The bank's failure to execute the judgment can mean that you are still the titled owner of the home, continuing your responsibility for real estate taxes, insurance, and any liability from injuries on your property. Is there anything you can do to force the bank to proceed to sale? How can you ensure you're not still held responsible for a foreclosed home?
What usually happens after a foreclosure judgment?
Although the specific procedures and court processes for mortgage foreclosure can vary from state to state, in most states the court will grant the lender a judgment against you in the amount of your outstanding mortgage and any costs or fees. In most cases, the lender will execute this judgment by foreclosing on your home -- the collateral for your mortgage. However, this isn't always required, and the lender may opt to collect this judgment in another manner (such as by seizing other assets or garnishing your wages) or simply sit on the judgment for a few years before selling your home at auction.
Until your home has been sold to a third party or purchased by your lender at auction, you're still the titled owner. You're permitted to live in your home until you're formally evicted by the sheriff, and you maintain liability and financial responsibility for your non-mortgage home expenses during this time. If you fail to maintain your home in good condition before its sale, your lender may even be able to come after you for additional financial damages to its judgment property. Therefore, it's important to maintain control over your property until you're certain of a sale and know that your financial and legal responsibility has ceased.
Can you force the lender to sell your home?
Some states have started to crack down on lenders who act as "absentee landlords," resulting in high vacancy rates in neighborhoods with higher-than-average foreclosure rates. In these states, you can demand that your lender force the bank to sell the home at auction, purchase the home itself, or seek to have the judgment against you vacated. You'll likely need the services of an attorney to ensure that your court pleadings comply with all local rules and statutes.
In other states these homeowner protections may not exist, and you could find yourself without recourse against a bank that fails to move forward on its judgment. Your best bet is generally to remain in your home until you're evicted by the sheriff. This can allow you to bank your would-be mortgage payments to give yourself a good financial cushion once the bank does execute its judgment, allowing you to easily rent an apartment or even put a down payment down on another home.
Each state puts a statute of limitations on civil judgments issued. This can mean that if your bank fails to execute its judgment for years (or decades), the judgment will expire and you will own your home free and clear. You'll want to consult an attorney to determine the specific laws in your state and calculate how long you'll need to wait until the bank's judgment expires and you can breathe easy in your home.
Click for more info on real estate law and how an attorney can help you navigate the waters of owning a home.
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