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8) Right of Redemption: a) Redemption: The borrower has the right to pay off the delinquent loan in full by paying everything that is owed: principal, interest, cost of collection, and foreclosure (court costs of lender) and attorney fees. b) The borrower may redeem the subject property as follows: i) If the subject property is the borrowers primary residence, the borrower may redeem the subject property within seven (7) months from the date the borrower was served with summons or by publication or no later than three (3) months after the judgment of foreclosure is entered, whichever is later. ii) If the subject property is not the borrowers primary residence the borrower may redeem the subject property within six (6) months from the date borrower was served with summons or by publication or no later than three (3) months after the judgment of foreclosure is entered, whichever is later. iii) Regardless of whether the borrower resides in the subject property or not, the redemption period may end earlier if: 1) The value of the real estate as of the date of the judgment is less than 90% of the amount required to redeem and; 2) The lender waives any and all rights to a deficiency judgment against the borrower within the right of reinstatement period (7 months from service or 3 months from judgment whichever is later) or 60 days after the date of the foreclosure judgment, whichever is later. This typically occurs if the subject property was investor owned, and the borrower did not file an appearance before the court.
iv) If the court determines that the property is abandoned, the right of redemption period
ends thirty (30) days after the date of the foreclosure judgment is entered.
v) A borrower may redeem the subject property by paying the foreclosure judgment amount
plus other expenses authorized by the court.
vi) A commercial property owner can (and usually does) waive his reinstatement and
redemption rights in exchange for something. Waivers for residential properties are not valid. Most commercial mortgages have a specific provision whereby the borrower waives all redemption rights.
vii) Special Right to Redeem: If a lender purchases a property at the sheriffs sale, and the
purchase price is less than the amount listed in the judgment of foreclosure and sale, the borrower may repurchase the property for the sale price plus all applicable fees and costs. This must be done within thirty days of the confirmation of sale.
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9) Foreclosure Sale a) Upon expiration of reinstatement and redemption periods or entry of a foreclosure judgment and waiver of all redemption rights, a foreclosed property may be sold. b) The notice of sale must be published at least three (3) weeks in a row, once per week, in a newspaper circulated to the general public. c) The notice of sale may be given prior to the expiration of the reinstatement or redemption period. d) The notice of sale does not need to be given to the borrower if he/she is in default due to not filing an appearance. 10) Report and Confirmation of Sale a) After the sale, the lender will file a motion including a report of the sale with the court to confirm the validity of the sale. b) The court conducts a hearing on the sale (generally two [2] weeks after the sale has occurred) and will approve the sale unless notice was not given properly, the sale was otherwise not conducted property, or that the sale, if confirmed would cause an injustice. 11) Deficiency Judgment and The Special Right to Redeem a) If the subject property is sold for less than the amount necessary to redeem, the lender may enter a deficiency judgment against the borrower. A deficiency judgment is the difference from what the subject property sold for at the sale and the balance owed to the lender. b) If the lender purchased the subject property and the sale price was less than the redemption amount, the borrower has the special right to redeem. c) The special right to redeem expires within thirty (30) days after the sale is confirmed and is satisfied only if the sale price plus any court approved costs are paid to the mortgagee/plaintiff. 12) Deed in Lieu of Foreclosure/Short Sale: a) The borrower gives back the property to lender without need for further judicial action. In the case of a short sale, it is roughly the same, but instead of giving back the subject property, the lender agrees to a reduced payoff so that the borrower can actually sell to a third party. b) Both the lender and the borrower have to agree. c) There is no deficiency judgment against the borrower. d) Because a completed foreclosure action destroys all other secondary liens, and the deed in lieu of foreclosure does not, this procedure is not popular with the lenders. 13) Credit Score Impact: All negative, but to what degree may vary. a) Foreclosure Judgment: Negative impact. b) Bankruptcy: Negative impact. c) Short Sale: Negative impact. It is likely that the borrower had missed payments. The downside is that the borrower may end up homeless if it is the primary residence. d) Deed in Lieu of Foreclosure: Negative impact. It is likely that the borrower had missed payments. The downside is that the borrower may end up homeless if it is the primary residence.
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underlying loan obligation is not voided. This means that the borrower still owes the lender money. The goal of a foreclosure defense strategy is to give the home owner a position of strength from which to bargain. This may mean that the end goal is a loan modification; it may mean that the end goal is a consent foreclosure. Barring an extreme case, you are more likely to be hit by a meteor than you are to get your home free and clear.
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Any poorly-planned legal action can be a bad idea. The U.S. Bankruptcy Code is rather complex. The factors that go into deciding which kind of bankruptcy to file include income, assets, consumer debt load, current debt payments, and others. Filing a Chapter 13 petition may put the brakes on your foreclosure case, but if you cannot make the payments each month, your case will be dismissed and the foreclosure will resume. Filing a Chapter 7 petition can also stall a foreclosure proceeding, but you will lose any non-exempt assets and the credit hit may not be worth it unless you have significant credit card or other consumer debt. For these reasons, it is highly important that you consult with a licensed attorney before making any decisions regarding filing for bankruptcy.
V. How Long Does It Take? Litigation can take a long time. Highly complex cases can last for years. Many foreclosure cases resolve themselves in a matter of months. Those cases are the ones that arent defended. A foreclosure defense case can last from six to eighteen months, with the vast majority likely falling somewhere in the middle. Ultimately, it depends on when the home owner takes action and how far along the case is when that action is taken. Even the most slam dunk case can last a long while; the procedural rules that protect defendants also protect plaintiffs. A motion to dismiss filed on March 1st may not be heard until May or June. The discovery process, where both sides request evidence and sworn statements from each other, can also be a lengthy process. Litigation will be frustrating for the impatient, but can be rewarding for those who are willing to wait.
VI. Can I Sue My Lender? In many situations, there may be a federal or state law that gives you a cause of action against your lender. Many of these statutes allow for specific damages, usually between $1,000 and $2,000. Its worth noting that these damages are usually not cumulative. If your servicer calls you 100 times in a year, even though you have asked it not to call you, its ultimate liability would be closer to $1,000 than $100,000. In extreme situations, it may be possible to claim some rather large damages. Those situations are generally not the norm. If you are considering pursuing a lawsuit against your lender, be sure that you have all of the facts before proceeding. Consulting with an attorney is the best start.
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