what does it mean in the foreclosure process when the attorney files original loan document

To me, as a lawyer in a judicial foreclosure state (where it takes a law suit to foreclose a mortgage) “in foreclosure” means that there is a law suit pending seeking to foreclose that mortgage. Papers have been filed, perhaps a hearing has been held, or a date set for an auction on the courthouse steps.

Full Answer

What is a foreclosure?

over time. The foreclosure process typically commences only after a borrower has stopped repaying the loan (meaning that the loan has gone into default); the lender therefore uses the foreclosure process to recover the proceeds of the loan through the sale of the property. Foreclosure involves specific rights and obligations with respect to both the

When does a lender have to foreclose on a property?

Aug 09, 2020 · A housing counseling agency or your real estate agent may recommend you seek a foreclosure attorney too. How Does Foreclosure Work. In New York, the judicial foreclosure process is required in order for the lender to take back the home. This means that there is a formal process that must be adhered to whereupon the lender must file a lawsuit.

How does judicial foreclosure work in the US?

Jan 09, 2019 · A foreclosure attorney understands the foreclosure process and the law. With this information, they are able to defend, negotiate, delay, and even stop the foreclosure all together. You need to discuss with a competent and experienced foreclosure attorney to discuss how to best defend against the foreclosure.

When does a bank have to file a lawsuit to foreclose?

A withdrawal is processed when a cure is made so that the foreclosure does not go forward. RULE 120 COURT ACTION and ORDER AUTHORIZING SALE – When a loan is referred to an attorney for a foreclosure action, the attorney files a Court action under Rule 120 of the Colorado Rules of Civil Procedure. The borrowers/owners are notified of the date and time for the Court …

What is an original loan note?

A loan note is a type of promissory agreement that outlines the legal obligations of the lender and the borrower. A loan note is a legally binding agreement that includes all the terms of the loan, such as the payment schedule, due date, principal amount, interest rate, and any prepayment penalties.

Do you need the original note to foreclose?

Trust Co. L 883128, 4 -6 (Cal. ... The court stated that the language in this deed of trust, governed California non-judicial foreclosure statutory procedures, does not require physical possession of the underlying promissory note in order for a foreclosure to be valid.Feb 19, 2015

Who holds the original promissory note?

The buyer of the note becomes what is called a “holder” because they hold your note as the owner of it. A holder has a special right to collect from you right away if you don't pay. But only the holder of an original promissory note can collect from you. A promissory note can change many hands as it is bought and sold.Jan 22, 2013

What is an original promissory note?

A promissory note, in simplest terms, is the acknowledgment of a debt. It is a written promise to repay an amount owed by one party to another and contains the terms of such repayment.Jan 28, 2020

How long after default does the foreclosure process begin?

In general, mortgage companies start foreclosure processes about 3-6 months after the first missed mortgage payment. Late fees are charged after 10-15 days, however, most mortgage companies recognize that homeowners may be facing short-term financial hardships.

In what type of foreclosure does a lender give a borrower a notice of default?

Judicial foreclosureJudicial foreclosure refers to foreclosure proceedings that take place through the court system. This type of foreclosure process often occurs when a mortgage note lacks a power of sale clause, which would legally authorize the mortgage lender to sell the property if a default occurred.

What makes a promissory note invalid?

Even if you have the original note, it may be void if it was not written correctly. If the person you're trying to collect from didn't sign it – and yes, this happens – the note is void. It may also become void if it failed some other law, for example, if it was charging an illegally high rate of interest.

What is the difference between loan agreement and promissory note?

A promissory note can be used for friend and family loans, or short-term, small loans. Loan agreements, on the other hand, are used for everything from vehicles to mortgages to new business ventures. Most banks and other large financial institutions have specific loan documents that they use for specific situations.Jun 18, 2021

Are promissory notes legal?

Unlike an IOU, which typically is flexible and informal, a promissory note creates a legal record of the loan and establishes a legal obligation to repay it. ... A promissory note falls somewhere in between an IOU and a loan agreement. They are legally binding, but they do not offer recourse for non-payment of the loan.Aug 17, 2021

How long does it take for lender to process promissory note?

Typically, you can expect to wait 1 – 7 business days for a personal loan to go through. Approval will generally take 1 – 3 business days, while disbursal will typically take 1 – 5 business days. It is possible for a loan to take as long as 30 days to process.

How long is a promissory note valid?

Depending on which state you live in, the statute of limitations with regard to promissory notes can vary from three to 15 years. Once the statute of limitations has ended, a creditor can no longer file a lawsuit related to the unpaid promissory note.

Is a promissory note recorded?

Promissory notes are typically recorded as public documents and accessible shortly after the closing. The trustee maintains the original deed until the loan is satisfied.

How does a foreclosure work?

Generally, the loan servicer, on the noteholder’s behalf, commences the foreclosure by filing a suit against the homeowner. If those bringing the suit cannot prove that they are acting on behalf of the party entitled to repayment under the terms of the note, they may lack legal standing to do so. Similarly, a foreclosure may be invalid if the foreclosing party or its representative files suit before becoming the holder of the note and the mortgagee.

How long does a foreclosure stay on your credit report?

A default, foreclosure, deed in lieu, or short sale may remain on a consumer’s credit report for up to seven years. A bankruptcy may remain on a consumer’s credit report for up to 10 years. The presence of adverse events on credit reports is likely to lower a consumer’s credit score, which can make it more difficult or expensive for a consumer to obtain credit in the future. Credit reports are also used by insurers and employers, so adverse credit events can affect the cost of insurance and/or employment opportunities.

What happens if you don't do loss mitigation?

If loss mitigation efforts do not succeed, the defaulted loan will proceed to foreclosure. There are two basic types of foreclosure. Judicial foreclosures proceed through the court system, while nonjudicial foreclosures take place outside it. The type of foreclosure process and other specific features are governed by state law, which varies considerably among the states, and by the terms of the mortgage itself. Some mortgages permit only one type of foreclosure. Some states permit only one type of foreclosure, while others provide for the possibility of either. State law can also vary depending on the type of property involved (its size and use) and by whether the mortgage was a purchase money mortgage or a refinancing of a previous mortgage. This overview is designed to present a general description of the foreclosure process. Actual state law may vary from the process described herein, and this overview should not be relied upon as a legal guide.

What is nonjudicial foreclosure?

Instead, in a nonjudicial foreclosure, the foreclosing party must notify the homeowner of the default and the scheduled sale. Sometimes this requires a formal “notice of intent to foreclose.” It is also required to advertise the sale. Advertisement requirements vary significantly by jurisdiction, but generally the sale must be advertised in a newspaper of record for the community for a few weeks prior to the sale. The assumption in a nonjudicial foreclosure proceeding is that the foreclosing party has the right to foreclose, provided that it appropriately provides notice and advertises the sale.

Can a foreclosure sale be evicted?

If the former homeowner does not voluntarily surrender the property following the foreclosure sale, the foreclosure sale purchaser can have the former homeowner evicted. Eviction is also a state law procedure; the precise process varies by state law, but it is not always automatic. Because foreclosure sale purchasers are often concerned about former homeowners damaging the property before they leave, they are often willing to negotiate with homeowners regarding relocation timetables and costs. They are, however, under no obligation to do so.

What are the alternatives to foreclosure?

These alternatives may include short sales, deeds in lieu, and bankruptcy. The Enterprises participate in the federal government’s HAFA program, which is designed to encourage alternatives to the foreclosure process for troubled home mortgage loans. Participating HAFA servicers may not seek deficiency judgments and may provide relocation incentives of up to $3,000 for eligible homeowners who tender deeds in lieu of foreclosure or do short sales.

Can a renter occupy a foreclosed home?

Sometimes a foreclosed property is occupied by renters. Renters’ rights in a foreclosure involving their landlord vary by state. Since 2009, however, the Helping Families Save Their Homes Act has included minimum protections for renters in the foreclosure of most mortgages, including all mortgages owned by the Enterprises. If the renter has a bona fide lease entered into prior to the notice of foreclosure, then the renter may occupy the property until the end of the remaining term on the lease unless the renter is given notice of termination by the foreclosure sale purchaser, in which case the renter has 90 days of occupancy rights. If the renter is not renting under a lease or the lease is terminable at will, then the renter also has 90 days of occupancy rights from notice of termination. Some states give renters additional occupancy rights; others merely give renters the right to notice of the foreclosure.

How long does it take to pay a foreclosure?

The lender will send a “demand” letter or foreclosure letter to the borrower, in which they will give the borrower 30 days to pay the default amount owed, plus a late fee. This is called the Redemption Period.

What is a pre foreclosure notice?

The notice of default must contain specific language and must attach a list of at least five nonprofit agencies nearby for the borrower to contact for aid.

What happens if you miss a mortgage payment?

Most homeowners or borrowers believe that if you miss a payment, if you owe money to the mortgage company, bank or lender, then it’ s strict foreclosure and you must give up your home. Fortunately, however, in reality, this is the furthest thing from the truth.

How does foreclosure work in New York?

How Does Foreclosure Work. In New York, the judicial foreclosure process is required in order for the lender to take back the home. This means that there is a formal process that must be adhered to whereupon the lender must file a lawsuit.

What are the two types of foreclosures?

Types of Foreclosure. There are two types of foreclosure: a judicial foreclosure, which requires a court order, and a non-judicial foreclosure, which does not. In a judicial foreclosure, the mortgagee must go to court and prove that it owns the mortgage and has the right to foreclose on it. New York adheres to a judicial foreclosure process, which ...

How long does it take for a foreclosure to be auctioned?

After the judge signs the Judgment of Foreclosure and Sale, the lender publishes a notice of sale about the auction in a newspaper at least 30 days before the auction date , and then may schedule an auction of the property by the referee.

What is a Lis Pendens?

The lender must also file a “Lis Pendens” (a pending lawsuit) in court. The “lis pendens” notifies people that title to the property is in litigation.

When does a lender have to give notice of foreclosure?

After the judge signs the Judgment of Foreclosure and Sale , the lender publishes a notice about the auction in a newspaper at least 30 days before the auction date, and then may schedule an auction of the property by the referee. If the borrower never filed an Answer or a notice of appearance, the lender is not required to give notice of the sale to the borrower.

How long does it take to file a foreclosure complaint?

The complaint must be served upon the borrower, along with a summons, typically providing 20 days to file a response or what is called an “answer” to the lender’s complaint (if the complaint and summons were served in person) or 30 days (if service was by certified mail or another way). Not including defenses in the answer waives the rights to bring those defenses later on, and therefore may assist the bank in accelerating the foreclosure process. Accordingly, the answer to the foreclosure lawsuit should be worded properly and an experienced foreclosure attorney should be consulted to include appropriate defenses and counter claims.

What is a Lis Pendens?

The “lis pendens” notifies people of the public that title to the property is in litigation. In addition to the summons and complaint, a “Help for Homeowners” notice must also be given to the borrower with the summons and complaint, thereby advising the homeowner of their rights during the foreclosure process.

What happens if you miss a mortgage payment?

Most homeowners or borrowers believe that if you miss a payment you may as well throw in the towel and agree to give up your home. Fortunately, however, in reality, this is the furthest thing from the truth. These lenders, whether it’s the bank or mortgage company, must strictly adhere to the judicial foreclosure process.

How to help yourself and your counselor?

Help yourself and your counselor by being on top of your paperwork by getting organized. The more organized and documentation you provide your counselor, the better they will be able to help you. The following are a list of documents you should try to gather and organize:

Can a foreclosure be delayed?

Not only does this mean that the foreclosure might not succeed, but it means that the foreclosure may be delayed. This is why hiring an experienced foreclosure attorney to defend against such suits is crucial.

What is an acceleration letter?

Specifically, the letter informs the borrower that the lender will accelerate the entire amount of the mortgage if the arrears (the total amount overdue) are not paid by a specified date set by the lender. This Acceleration Letter is only sent to the borrower after the borrower defaults on the loan.

How long does a foreclosure last?

WITHDRAWAL or ADMINISTRATIVE WITHDRAWAL – A foreclosure may be withdrawn (or stopped) for several reasons at the request of the lender or its attorney or by the Public Trustee if the sale has been continued for too long a period of time and not held within 12 months from the originally-scheduled Sale Date.

What is redemption in foreclosure?

REDEMPTION – A “redemption” is made AFTER the Foreclosure Auction Sale takes place and has several deadlines associated with it. If a redemption is made, a Certificate of Redemption is issued by the Public Trustee’s office. PUBLICATION – By law, the Public Trustee must publish a Notice or Combined Notice in a newspaper of general circulation within ...

What is a deed of trust in Colorado?

DEED OF TRUST – In Colorado, a mortgage is generally called a “Deed of Trust” and that document is signed and recorded at the time the property is purchased and financed. The Deed of Trust gives the Public Trustee the right to sell the property through foreclosure proceedings if the borrower defaults on the terms of the Deed ...

What is a NED record?

E & D DATE or NED RECORDED – The notice of Election & Demand for Foreclosure (NED) is the FIRST document the Public Trustee’s office receives from the lender or its attorney. This is recorded with the Clerk & Recorder’s office and the foreclosure is officially started at this time.

How long can you wait to file for foreclosure?

Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a few exceptions. (12 C.F.R. § 1024.41). This 120-day period provides most homeowners with ample opportunity to submit a loss mitigation application to the servicer.

How long before foreclosure can you send a notice in Georgia?

Under Georgia law, no later than 30 days before the date of the scheduled foreclosure sale, the lender must send you a notice of the initiation of proceedings to exercise a power of sale (that is, notice of the nonjudicial foreclosure). The notice must be sent via registered mail, certified mail, or overnight delivery, return receipt requested, to the property address, or to any other address you've designated by written notice to the lender. (Ga. Code Ann. § 44-14-162.2).

When is foreclosure sale in Georgia?

Foreclosure sales are generally held at the county courthouse on the first Tuesday of the month unless that day is New Year's Day or the 4th of July, in which case fore closures are held on the Wednesday of that week, between 10:00 a.m. and 4:00 p.m. (Ga. Code Ann. § 9-13-161).

How long does it take to get a deficiency judgment in Georgia?

To get a deficiency judgment in Georgia, the lender must file a report of sale with the superior court of the county in which the land is located within 30 days after the nonjudicial foreclosure sale. If the lender misses this deadline, it can't get a deficiency judgment. (Ga. Code Ann. § 44-14-161).

What happens if you don't respond to foreclosure?

If you don't respond with a written answer, the lender will automatically win the case. But if you choose to defend the foreclosure lawsuit, the court will review the evidence and determine the winner. If the lender wins, the judge will enter a judgment and order your home sold at auction.

How long does a mortgage servicer have to contact you?

Under federal mortgage servicing laws, the servicer must contact, or attempt to contact, you by phone to discuss loss mitigation options, like a loan modification, forbearance, or repayment plan, no later than 36 days after you miss a payment and again within 36 days after each following delinquency. No later than 45 days after missing a payment, the servicer has to inform you in writing about loss mitigation options that might be available and appoint personnel to help you try to work out a way to avoid foreclosure. A few exceptions are in place for some of these requirements, though, like if you've filed bankruptcy or asked the servicer not to contact you pursuant to the Fair Debt Collection Practices Act. (12 C.F.R. § 1024.39, 12 C.F.R. § 1024.40).

How to stop foreclosure sale?

In fact, if a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy. Once you file for bankruptcy, something called an " automatic stay " goes into effect.

How long does it take for a foreclosure to take place?

Even if you don't contest the foreclosure action, the sale usually won't take place until around a month after the judge issues a foreclosure order. So you'll probably have a couple of months from the first notice of the case to the date the court orders the sale to take place. You'll probably have at least double that amount of time, ...

How long do you have to give notice of foreclosure?

You can probably count on at least 30 days' notice before the foreclosure sale after the first official notice. In most states, you'll get a couple of months. Check your state's law in our Summary of State Foreclosure Laws to learn the process in your state.

What happens if a judge orders a foreclosure sale?

If the judge orders the foreclosure sale, you'll probably get a notice telling you when and where the sale will take place. In Connecticut and Vermont, though, in a process called a " strict foreclosure ," the judge can transfer title to the property as part of the judgment of foreclosure—without a foreclosure sale.

What is nonjudicial foreclosure?

Nonjudicial Foreclosures. In the remaining states, the foreclosing bank can opt to use an out-of-court (nonjudicial) process to foreclose. With a nonjudicial foreclosure, the bank has to carefully follow a series of steps described in the state statutes to complete the process.

What is a notice of sale?

a combined notice of sale and right to cure telling you that your home will be sold on a certain date unless you make up the missed payments. a notice of sale, or. in a couple of states, notice through publication in a newspaper and/or posting on the property or somewhere public.