If you fail to answer the court action, the lender can get a default judgment from the court. The judgment will give the lender permission to hold a foreclosure sale. But if you respond to the lawsuit by filing an answer , the case will go through the litigation process. The lender might then request the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because the case's critical aspects aren't in dispute.
If the court grants summary judgment for the lender—or you lose at trial—the judge will order the home sold at a foreclosure sale. Notice of the sale is posted publicly and published twice in a newspaper, with the first publication at least four weeks before the sale happens.
At the sale, the lender usually makes a bid on the property using a "credit bid" rather than bidding cash. With a credit bid, the lender gets a credit up to the amount of the borrower's debt. Sometimes the lender bids the full amount of the debt; sometimes, it bids less.
The highest bidder at the sale becomes the property's new owner. Completing a reinstatement will stop the foreclosure. As noted earlier, for nonagricultural one-family or two-family dwellings, which are the borrowers' residence, the lender has to give 30 days to cure the default before starting the foreclosure lawsuit.
For agricultural properties, it's 45 days. But Iowa law states that you don't get the right to reinstate if the lender gave you:. Your mortgage contract might also give you the right to reinstate the loan after the deadline given in the notice of the right to cure the default expires.
To find out whether your mortgage gives you a more extensive right to reinstate, read your mortgage contract. Even if the mortgage doesn't provide you with a longer time to reinstate, the lender might nevertheless agree to let you reinstate. Sometimes, a foreclosure sale doesn't bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a "deficiency balance.
Other states prohibit deficiency judgments with what are called anti-deficiency laws. In Iowa, the foreclosing lender isn't allowed to get a deficiency judgment in some situations, like when:.
I am personally committed to ensuring that each one of our clients receives the highest level of client service from our team. Our mission is to provide excellent legal work in a cost-effective manner while maintaining open lines of communication between our clients and their attorneys. Many of our clients are going through difficult times in their lives when they reach out to us.
They should feel comfortable leaning on the experience and expertise of our attorneys as their counselors and advocates. We are here to help! Schedule a Consultation. About Us. All Legal Services. Estate Planning. Real Estate Law. Guardianship Law. Charles Aurora Wheaton. Cedar Rapids Davenport Des Moines. No items found. January 15, In this article If you are worried about making your mortgage payments, then you should learn about your state's foreclosure laws and processes. Differences among states range from the notices that must be posted or mailed, redemption periods, and the scheduling and notices issued regarding the auctioning of the property.
However, a general understanding of what to expect can be found on our foreclosure timeline. In general, mortgage companies start foreclosure processes about months after the first missed mortgage payment. Late fees are charged after days, however, most mortgage companies recognize that homeowners may be facing short-term financial hardships. It is extremely important that you stay in contact with your lender within the first month after missing a payment. After 30 days, the borrower is in default, and the foreclosure processes begin to accelerate.
It must be filed before a judgment is entered so you should file it immediately after receiving the foreclosure papers, whether or not you also intend to file an Answer. The delay of sale will give you an extra three 3 or six 6 months depending on whether the lender is waiving the right to get a deficiency judgment if the house sells for less than the loan.
If the petition does not "waive a deficiency" judgment, you can get six months in the home. To get six months in the home, you need to file a demand to delay sale. The lender can then get a deficiency judgment. A deficiency judgment is only good for two years.
If you don't file a demand for delay of sale, the lender can't get a deficiency. You need to decide what works best for you. You should talk to a lawyer about your options.
Click here for an example of a "Demand for Delay of Sale. The mortgage lender won't help me but I still want to keep my home.
Will filing bankruptcy help? A Chapter 13 bankruptcy might help you cure the delinquency on your home if your income is enough to make regular mortgage payments plus "cure" the delinquency over a period of three to five years.
This is a longer period than what you would be allowed under one of the mortgage company's own programs but you'll also have attorney and trustee fees to pay in a Chapter 13 bankruptcy. But if you can't reach a good agreement to resolve the delinquency with the lender you should talk with a bankruptcy attorney about Chapter It may be your last best option. And don't wait too long to discuss this option. Sometimes mortgage lenders will lead debtors along letting them think some agreement can be reached until just before a sheriff's sale.
That might be too late. I can't afford my house any longer. Can I just give it back to the lender? Yes, under Iowa law there are alternatives to foreclosure if you don't want to keep the house. You can deed the house back to the lender voluntarily while the lender waives any right to collect a deficiency.
A house can also be "surrendered" in a bankruptcy if there are other debts you need to discharge. Talk with an attorney about which of these options is best if you've decided to give up the house.
If my house sells for less than the loan amount will the lender come back against me for it? A lender might be able to collect a "deficiency" if your house is sold for less than the loan amount but in Iowa most lenders waive their right to collect a deficiency when they foreclose.
0コメント