A foreclosure lawsuit is initiated by the attorneys for the lender by filing a Summons and Complaint in the County Clerk’s office of the county where the home is located. Thereafter the Summons and Complaint is served on the homeowners by a process server. The end of a foreclosure lawsuit is the sale of the homeowner’s home. The sale is an auction sale where anyone can come and bid as long as they have at least a third of the money up front and the rest within a few days.
The Home Is Under Water
There are cases where the foreclosure sale will not provide enough money to repay the mortgage loan. This is a situation where the home is called said to be Under Water. Under water means that the home is worth less than the amount that is owed on it. In these situations, the bank can move for a deficiency judgment against the homeowner. Here is an example of that situation: The homeowner owes $850,000. The home is sold for $750,000 at the foreclosure sale. There is now a deficiency of $100,000. The homeowner still owes the bank the $100,000. This means the homeowner can lose their home and still owe the bank a lot of money. Filing a bankruptcy can stop the foreclosure sale and in certain circumstances eliminate deficiency judgments against the homeowner.
After the Sale
After a home is sold at a foreclosure sale the new owners need to notify the homeowners of the details of the sale. Then the new owners start to take action to have the prior homeowners removed from the house. Unfortunately, the loss of a family’s home is a very unpleasant experience.
The law firm of Schlissel DeCorpo LLP has been helping families deal with mortgage and foreclosure problems for more than 30 years. We can be reached at 718-350-2802, 516-561-6645 or 631-319-8262 or by e-mail at info@sdnylaw.com.
