A judicial foreclosure is a foreclosure ordered by a court. In order to exercise all of your rights, knowing the entire judicial foreclosure process is imperative. Although judicial foreclosures vary from state to state, a general outline and explanation of such is below.
1) First Missed Payment
If you missed one payment, then a loan officer will merely call you to remind you to pay your mortgage payment and that you are late.
2) Second Missed Payment
If you missed two payments consecutively, then a loan officer will call you again and will probably ask you to make a payment over the telephone.
3) Third Missed Payment
If you missed three payments consecutively, then a loan officer will send you a notice of breach of the mortgage contract. In that letter, it is likely to state that the mortgage company is going to exercise its accelerated clause, in which the remainder of the mortgage must be paid within 30 days.
4) Notice of Breach
If the remainder is not paid after the 30 days period, then the mortgage company will start the foreclosure proceedings.
5) Initiation of Judicial Foreclosure
The mortgage company starts the judicial foreclosure proceedings by having its attorney file suit. You will have approximately 20 to 30 days to object with a formal written response. If you do not object to the foreclosure proceedings, then the judge will enter an automatic default judgment against you.
Nevertheless, if you do decide to object, then you may have a number of procedural and substantive defenses available.
6) Foreclosure Auction
If the judge does enter into a default judgment against you, then he will schedule a foreclosure auction. The highest bidder of your real property will be the new owner.
7) Right of Redemption
Depending on where the real property is located, you may have a right of redemption. If so, then you will have a period of time after the auction ends to buy back your property from the highest bidder.
An eviction proceeding will be filed if you do not leave the property after it has been sold and if you do not exercise your right of redemption.
Do I Need a Lawyer?
An experienced foreclosure lawyer will help defend against the foreclosure, and will help you use strategic legal methods to prevent it. Also, he will be able to lessen your financial responsibility.