A default judgment is one option available to lenders who are pursuing foreclosure. Default judgments are an accelerated foreclosure process that moves faster than traditional foreclosures.
If you’re facing foreclosure, a foreclosure attorney can work with you to explain all of your options to avoid foreclosure and keep your home.
Contact Joshua Denbeaux today to learn more about the foreclosure process and how we may be able to help you avoid foreclosure.
Default Judgment
A default judgment is granted in favor of the lender without foreclosure proceedings. If you’re facing a default judgment, you have very little time to try to save your home, and acting quickly is extremely important.
A lender can move for a default judgment if the borrower fails to respond to a foreclosure lawsuit. When a default judgment is granted, the proceeding portion of the foreclosure process is skipped, expediting the foreclosure.
Once the court issues a default judgment, the lender can proceed with foreclosure uncontested. Typically, after a lender is granted a default judgment, they will sell the property to recover the outstanding debt on the mortgage.
How to Avoid a Default Judgment
If you receive a notice of foreclosure from your lender, it’s important that you respond. The summons will notify you of your foreclosure rights and the number of days you have to file a formal response.
Your answer to the notice is your opportunity to inform the court of your position on each of the allegations in your notice. With your answer, you formally create your defense and counterclaims against your mortgage servicer.
You need to file an answer if you receive a foreclosure notice. If you file an answer to your lender’s foreclosure complaint, they cannot pursue a default judgment against you.
A foreclosure attorney can work with you to help you file an answer. Your attorney can help you write your answer and make sure that it’s filed correctly and on time.
Consequences of a Default Judgment
If your lender is granted a default judgment, the most common consequence is losing your property. When a home is foreclosed on, the mortgage servicer becomes the owner of the property in question.
As soon as a default judgment is granted, your lender can move forward with the foreclosure sale.
A default judgment is a streamlined foreclosure, but it is still a foreclosure. Having a default judgment on your home could have a major negative impact on your credit score and hurt your ability to get new credit or loans in the future.
Homes sold in foreclosure by the lender are typically sold for less than the mortgage amount. With a default judgment, your lender could also pursue a deficiency judgment.
A deficiency judgment is when your lender seeks the remaining mortgage balance not covered by the sale of the property. You may find yourself without your home and still owing money to your lender.
Loan Reinstatement
If your lender is granted a default judgment, you may have the opportunity to work with them for loan reinstatement. Loan reinstatement is the period of time when you can make past due payments on your mortgage before the foreclosure sale to get back in good standing with your mortgage.
The options for loan reinstatement vary from lender to lender. Your ability to reinstate your mortgage will depend on your specific mortgage terms.
The courts can also annul default judgments. To get a default judgment annulled, you would need to work with your attorney to show good cause for why the answer was not filed.
Getting an annulment of a default judgment can be very difficult. There needs to be a legitimate reason for the answer not being filed. Missing the notice or forgetting to file an answer wouldn’t be qualifying reasons for a default judgment annulment.
Contact a Foreclosure Attorney Today
The foreclosure process is very specific, and it’s important that homeowners correctly follow the steps required. A default judgment can move very quickly. Simply forgetting to file an answer could mean that you find yourself with a foreclosed home and nowhere to live.
It’s important that you act on and respond to any foreclosure notices that you receive from a lender.
An attorney can help you through the foreclosure process. If you think you might be headed towards foreclosure, an attorney can help you negotiate with your lender and navigate the foreclosure process.
Contact Denbeaux Law to learn more about the foreclosure process and how we may be able to help you.
