1. Mortgage loan -
a. Mortgage - document evidencing debt and attaching that debt to the property listed. Must be signed by all parties on the deed and any party with a homestead interest.
b. Promissory Note - written promise to repay a sum of money loaned. Must be signed by those who are agreeing to pay the amount owed on the loan.
2. Assignment of Mortgage - document evidencing the transfer of legal interest in the mortgage to a new owner.
3. Default on loan- a default means that a party is no longer in compliance with the requirements of the loan documents, normally non-payment of the mortgage.
4. Lien position - A property may have several liens on it - ie: Purchase money mortgage, home equity line of credit, etc. - and their priority is determined by the date the lien was recorded.
5. Complaint - Official pleading outlining the basic allegations of foreclosure. All persons on the mortgage must be named in the Complaint
Foreclosure process up through the Complaint
1. Once a party defaults on their loan, the non-breaching party will send a breach letter (aka default letter, notice of default, demand letter) to the breaching party. The breach letter typically gives the breaching party a set amount of time to cure their default. Curing the default (usually paying what is owed) will result in the bank not putting the loan in the foreclosure process.
2. After the time included in the breach letter has run, the bank will file the Verified Complaint in the county in which the property is located.
3. The Complaint will be served on all named parties. Three ways of accomplishing this are personal service, substitute service, and constructive service.
a. Personal service - process server hands Complaint to you.
b. Substitute service - process server hands the Complaint to someone legally allowed to accept service on your behalf
c. Constructive service - publishing 2 notices in 2 consecutive weeks of an accepted newspaper.
After being served with the Complaint
1. 20 days to respond.
a. Types of responses (pre-answer)
i. Motion for extension of time to respond - asks for more time.
ii. Motion to Quash Service - contests validity of service.
iii. Motion to Dismiss - challenges the complaint as not being sufficient as drafted.
b. Answer - must admit/deny each allegation in the Complaint. This is the opportunity to raise your defenses as well. Service cannot be challenged after filing an answer.
i. Counterclaim - any cause of action you believe you may have against the bank may be raised as a counterclaim attached to your answer. Speak with an attorney.
2. Discovery - requests to gather more information related to the case.
i. Request for Production - requests for physical documents already in existence.
ii. Request for Admissions - asks questions to eliminate facts that are not in dispute.
iii. Interrogatories - asks for sworn written responses to questions related to the case.
Standard motions and procedures
1. Hearing - a hearing is when arguments outlined in a motion are heard before a Judge.
2. Motion for Summary Judgment - This motion is the bank seeking final judgment based on the facts before the Court and saying based on these facts, we're entitled to judgment as a matter of law.
3. Default (clerical or judicial) - If you do not file an answer (not the motions above, but an actual answer) within 20 days of receiving the Complaint you may be defaulted. This is different from the default described above. This default is a procedural device to expedite the case. A default terminates the defending party's right to defend the case.
4. Motion to Compel Mediation - asking the Court to require the Bank to go to mediation with you. Mediation is a form of alternative dispute resolution that doesn't take place with the Court. You will sit down with a mediator and the opposing side to attempt to reach an agreement.
5. Trial - the Court will hear both parties' arguments.
Sale after final judgment is entered
1. Sale date - between 35-100 days after judgment is entered a sale date should take place.
2. Notice of sale - must be published once a week for two consecutive weeks. The second publication must be at least 5 days prior to the sale.
3. Sale - takes place either at the Courthouse or online. Check the notice of sale for details.
4. Right of redemption - by statute, the defendant in a foreclosure case has until the sale is complete to redeem the property by paying off the entire amount of the indebtedness. The sale is complete when the certificate of sale is complete.The certificate is issued after the sale.
5. Objection to sale - arguing that the sale should not have taken place. Must be filed within 10 days after the sale in order to stop the Clerk of Court from issuing the Certificate of Title.
6. Certificate of Title - Gives title to the winning bidder at the sale. This is issued after the ten day period for objections has run.