Bankruptcy Lawyer West Jordan Utah: Foreclosure Hearing

How hard it is to fight a foreclosure depends to a great extent on where you live. If your state requires the foreclosing party to sue you, this is called judicial foreclosure then, it’s easier and less expensive to jump into the existing lawsuit than it is to challenge a non-judicial foreclosure, which proceeds without court supervision. With a non-judicial foreclosure, you’ll have to bring your own lawsuit.

Challenging a Judicial Foreclosure

In a judicial foreclosure, the foreclosing party must bring a lawsuit to get the foreclosure started. You will be notified of the foreclosure lawsuit when papers called a summons and complaint are delivered to (served on) you. The papers will advise you of the lawsuit and give you a period of time within which you must respond if you choose to contest it. And, significantly, the foreclosing party will have the burden of proving to the judge that the foreclosure is justified under the terms of the mortgage. Whether or not you respond is up to you. Either way, the mortgage holder will be required to prove that the foreclosure is legal. The proof will typically consist of a thick bundle of documents purportedly containing various papers that you signed when obtaining or refinancing your mortgage, like a mortgage (or deed of trust) and a promissory note. There will also likely be notices, signed agreements, internal accounting of payments both made and missed and written statements under oath called declarations or, if sworn before a notary public, affidavits from employees with the foreclosing party or mortgage servicer who claim to have knowledge of:
• your missed payments
• the lender’s compliance with your state’s laws regarding foreclosure procedures, and
• the circumstances through which the foreclosing party came to own the mortgage.

As a general rule, if you don’t point out errors or omissions in the paperwork, the court will accept the papers as evidence that will support a foreclosure judgment and order for sale. If you do respond, you will have the opportunity to tell a judge why you think the papers are wrong and that foreclosure is not warranted. To contest the foreclosure, you must file an “answer” in most places. In it, you state your factual and legal arguments for opposing the foreclosure. If you have evidence of your own regarding these issues, you also can file your own sworn statements. For example, if the foreclosing party claims that you missed five payments, but you can prove typically with canceled checks that you missed only one, you would submit a statement under oath to that effect and attach your canceled checks. After you file your answer with the court, the foreclosing party may file a motion of summary judgment, which you must respond to, and the court will hold a hearing on the matter. The court will grant judgment in favor of the foreclosing party if there is no dispute as to the important facts of the case. But if the court denies summary judgment, the case will proceed toward a trial. Before the trial, discovery will take place. This is the process by which you and the foreclosing party ask each other for facts, documents, and other information prior to the trial. In a foreclosure, each side may ask the other to provide certain information (through a demand for production of documents, interrogatories, and depositions) that might help prove or disprove the right to foreclose. At the trial, the foreclosing party must prove it has the right to foreclose. Then you must prove that the foreclosing party should not be permitted to foreclose. You will both present your cases, sometimes through witnesses who can be questioned by the judge and cross-examined by the other side. For example, if there is a conflict over missed payments, both you and an official from the mortgage servicer would testify, and the judge would decide which of you is most likely telling the truth.

At the end of the trial, the judge will either:
• order the foreclosure to go ahead (and in many states, set the sale date), or
• dismiss the case, sending the foreclosing party back to the drawing board.

Foreclosure proceedings vary according to state legislation. The local government may set up a hearing to approve the potential foreclosure. Whether or not you should attend this hearing depends on what you want. If you are willing to move out of the foreclosed real estate without any protest, then you do not have to attend. If you want to dispute facts to defend yourself and to stop the foreclosure proceedings, this is your last chance to do so. Judicial foreclosures require a courtroom hearing before the foreclosure process can begin. When a lender wants to foreclose on a property, it must file a complaint with the courts. When the courts receive a legitimate complaint, they notify the borrower and set a hearing date. Judicial foreclosures offer a borrower a chance to argue his case and provide the borrower with options before undergoing the foreclosure process. If there is no dispute, a judge will grant the foreclosure and decide upon a fair amount to reimburse the lender. The property will be seized and sold in a public auction.

Non-Judicial Foreclosures

Non-judicial foreclosures do not extend borrowers the same flexibility as judicial foreclosures. No courts or judges are needed to approve these foreclosures. Instead, the lender will send a default notification to the borrower. Within this letter includes a “grace period,” in which borrowers are given a certain amount of time to pay the amount owed. If borrowers do not pay the owed amount, then lenders will issue a Notice of Sale. In non-judicial foreclosures, there are no courtroom hearings to attend. Any arguments or disputes you have must be settled with you bank or lender.

Reasons to Attend the Hearing

By attending the hearing in a judicial foreclosure, borrowers can defend themselves against the event. If the lender violated any contracts or laws or if you think your case constitutes an exception, this is your only chance to stop the foreclosure process judicially. You may be permitted to pay the balance owed to avoid foreclosure, but the lender also will expect all courtroom fees to be paid in full. Additionally, attending the hearing may slow the foreclosure process, giving you time to find alternative housing and save money for rent.

Reasons Not to Attend the Hearing

If you do not attend the hearing in a judicial foreclosure, you will most certainly lose the case, and the courts will grant lenders the foreclosure. If you have no arguments to defend yourself, you may decide to skip the hearing. Attendance is not mandatory, so you will not be fined or prosecuted for not attending. If you are ready to get the whole process over with and behind you, then you may be able to catalyze the process by not attending. You also may omit expensive court costs and attorney fees by not attending the foreclosure.

What Should I Expect At My Foreclosure Hearing?

In some states, foreclosure hearings are held by the Clerk of Court or Assistant Clerk of Court, as judges rarely hear foreclosures. The Clerk of Court is only to hear cases involving “legal defenses.” Cases involving any other type of defense, such as defense of fraud cases, are to be handled through Superior Court. This is due to North Carolina being a “Power of Sale” state. There are three possible outcomes of a foreclosure hearing. The first outcome is that the Clerk of Court will deny the right to foreclosure. During a foreclosure hearing, a mortgage holder is required to prove four different components in order for the Clerk of Court to approve a foreclosure sale. Generally, the mortgage holder provides the Clerk of Court with documents supporting each of the four components. The four components considered at a foreclosure hearing are as follows:
• Reasonable debt occupied by the mortgage holder or party seeking to foreclose.
• Default on the debt
• The right for the mortgage holder to foreclose based upon the deed of trust to the home
• Notice of hearing was sent to the Debtor
If the mortgage holder does not prove the existence of the four components, the Clerk of Court will not approve the sale. The second outcome of a foreclosure hearing is the Clerk of Court will issue a continuance. Under Section 45-21.16C of the General Statutes, the Clerk of Court may continue a foreclosure hearing up to 60 days. This could be due to the Clerk’s conjecture that the issue can be solved with time. For example, the Clerk may issue a 60 day continuance if the Debtor is in the process of working something out with the mortgage company. If the Clerk issues a continuance at a foreclosure hearing and the Debtor is present at the hearing, the Debtor will receive a written order from the Clerk stating the continuance. The third outcome of a foreclosure hearing is the Clerk of Court will issue a “sale date”. More than likely, the Clerk of Court will approve a foreclosure sale if the mortgage holder can prove all four components mentioned above. If a mortgage holder is able to prove all four components, the Debtor will receive a “sale date”, which represents the date at which the Debtor’s home will be sold. The sale date usually follows approximately 20 days after the foreclosure hearing. Once a Debtor receives a “sale date”, the Trustee, whom is listed on the deed of trust, will then post a “notice of sale” flyer at the county courthouse bulletin board in addition to sending notice to the borrower. Once the sale date has arrived, Utah issues a ten day upset bid period. The ten day upset bid period allows for the filing of a bankruptcy within that ten day period in order to stop a foreclosure. If a bankruptcy is not filed before the sale date or during the ten day bid period, the Debtor will no longer own the property. If you have a foreclosure hearing or foreclosure sale date pending it is important that you immediately contact an experienced bankruptcy attorney to learn more about how you can save your home. When you have failed to pay your mortgage for multiple months, the mortgage-holder or its agent may initiate foreclosure proceedings to take possession of your home. While each state has specific procedures, most foreclosure hearings are conducted in a predictable way. Understanding the routine can do more than assuage your fear; it can help you catch errors in procedure or fact that enable you to fight the foreclosure.

Pre-Hearing

After the bank has made legally required efforts to get the homeowner to pay, it can file a Notice of Intent to Foreclose with the courts. The Intent to Foreclose is published in local newspapers. If there is still no resolution, the bank will file papers to foreclose. The homeowner will receive written notice and have a specified length of time to answer. If the homeowner answers, the court will schedule a hearing date at which both the foreclosure and homeowner must appear. It is in the homeowner’s best interests to answer and attend.

The Plaintiff – The Mortgage Holder

In front of the judge, the mortgage company will present documentation demonstrating that the mortgage was not paid and that all legally required steps to obtain payment have been followed. If the defendant does not show up in court, the judge will issue a summary judgment, allowing the mortgage company to expedite the foreclosure without the homeowner having a say in the matter. In other words, the judge will treat the case as if the homeowner never answered the original court papers. At this point, foreclosure and sale of the home can happen within weeks.

The Defendant – The Homeowner

When the homeowner has the opportunity to speak, she has a variety of options. She can ask for a minimum of 90 days to arrange payment of her mortgage; in most cases, she must work out a way to pay the full past-due amount, including fees and additional interest. She may also challenge the plaintiff’s case if there is proof that the mortgage has been paid, or that the facts are different from those presented. In any case, the defendant will almost always get more time to resolve the problem.

Outcome Of Foreclosure

If the defendant does not show up in court or does not respond, the mortgage company will obtain a summary judgment, at which point it can foreclose and auction off the house in as little as 30 days. A defendant who does appear in court has a variety of options, from requesting more time to arranging a Chapter 13 bankruptcy. In nearly every case, showing up for a hearing will at least get the defendant more time before any action is taken.

Will Your Foreclosure Take Place In or Out of Court?

In Utah, foreclosures are typically not done through court, although sometimes they take place at a courthouse. In some states, foreclosures must go through court. In others, it can proceed out of court. Find out what happens in your state. Foreclosures take one of two major paths: judicial (in court) or non-judicial (out of court). If your home loan is secured by a mortgage, chances are excellent you’ll go through a judicial foreclosure. If your loan is secured by a deed of trust, you’ll probably go through a non-judicial foreclosure. (Learn the do’s and don’ts when you’re in foreclosure.) The real estate industry in a particular state, and the laws that industry’s lobbyists have pushed through the state legislature, pretty much determine whether mortgages or deeds of trust are used there. Again, mortgages are usually foreclosed in court, while deeds of trust are typically foreclosed non-judicially. Though, it isn’t always clear what the foreclosure process will be. Even in a state where foreclosures are normally non-judicial, the lender might choose to foreclose through the courts. Not sure which document was used to secure your home loan? You can find out by:
• reviewing your original paperwork (that pile of documents you got when you closed escrow on your house)
• calling your loan servicer (the company to whom you make your payments)
• contacting a counselor at a local HUD-approved housing counseling agency and asking which document is typically used in your state, or
• visiting your local land records office and pulling up the recorded document (under your name or address) on the public-access computer. In some states, the borrower has a right to request a judicial foreclosure even if a deed of trust authorizes a non-judicial foreclosure.
In judicial foreclosures, your lender through its foreclosure attorney gets things started by filing a foreclosure lawsuit in the local court. You’ll receive official notice of the lawsuit when a sheriff or process server personally serves you with (or mails or posts on your door in some cases):
• a summons explaining your right to file a written response to the lawsuit and telling you how long you have to do so, and
• a copy of the document (called a petition or complaint) that requests the foreclosure and that sets out the reasons why the judge should issue a foreclosure order.
If you don’t respond, the lender will most likely get a default judgment authorizing the sale of the home. A default judgment means that you automatically lose the case because you didn’t respond to the suit. If you do respond by filing an answer with the court, the foreclosing party can’t get a default judgment. Instead, it will likely file a motion of summary judgment. You must respond to the motion or else the lender will win automatically. Even if you respond, the court may grant summary judgment in favor of the foreclosing party if there’s no dispute as to the important facts of the case. However, if you have a valid defense and the court denies summary judgment, the case will proceed toward a trial, at which you and the lender will present your evidence and arguments. The judge will then:
• order the foreclosure to go ahead (and in many states, set the sale date)
• postpone a final decision to give the lender more time to fill in a missing gap (proof of ownership, for example), or
• dismiss the case, sending the lender back to the drawing board.

Foreclosure Attorney Free Consultation

It’s not a matter of if, it’s a matter of when. Legal problems come to everyone. Whether it’s your son who gets in a car wreck, your uncle who loses his job and needs to file for bankruptcy, your sister’s brother who’s getting divorced, or a grandparent that passes away without a will -all of us have legal issues and questions that arise. So when you have a law question, call Ascent Law for your free consultation (801) 676-5506. We want to help you.