How long can I stay in my home after defaulting on my mortgage?

How long can I stay in my home after defaulting on my mortgage?

The answer to this question will depend on the state in which you live. Some states are judicial foreclosure states, some states are nonjudicial foreclosure states, and some states like Maryland are quasi-judicial foreclosure states.

Foreclosure: Delaware, Pennsylvania. In a foreclosure state, the lender will file a complaint seeking a money judgment and mortgage foreclosure. This is very much like a conventional court process. The homeowner has the opportunity to file a response to the complaint and assert any defenses.

Most of these cases are resolved by entry of default judgment (if the homeowner fails to answer) or summary judgment (if the homeowner files an answer but has no legal defenses to the foreclosure). Once the lender has a judgment, they must bring in the sheriff to schedule a sale. A sheriff’s sale is usually held at the sheriff’s office in a large public room. This process can take about six to ten months from start to finish.

Some states require time before the lender can actually file a complaint. In Pennsylvania, the lender must give 33 days. In states like Delaware, the lender must actually have a mandatory mediation to give the homeowner a chance to negotiate a loan modification. Mediation can add 60 or more days to the process. This time is in addition to the six to ten months that will elapse before the homeowner loses the right to remain in the home after default.

Extrajudicial Foreclosure: Virginia. In a non-judicial foreclosure state like Virginia, foreclosure and eviction can happen very quickly because the courts do not get involved in the process. Many Virginia mortgages require lenders to give homeowners a 30-day notice and right to amend before starting the process. Upon failure to cure, and depending on the language of the mortgage or deed of trust, the lender may schedule a foreclosure sale and have the sale published in a local newspaper two, three, or four weeks later. A commissioner reviews the sale and costs and the deed can be transferred approximately thirty days after the sale.

Quasi-Judicial Foreclosure: Maryland. Maryland has more complicated rules. The lender cannot file a complaint (called an Order to Docket) until the later of (a) 90 days after the default or (b) 45 days after sending the homeowner Notice of Intent to Foreclose. The lender must wait an additional 45 days after serving the Entry Order on the homeowner (if the lender cannot serve the homeowners after trying on two different dates, the lender may post the Entry Order on the home). Just like in Delaware, there is an option for mediation in Maryland, but unlike in Delaware, the process is not mandatory; the homeowner must request a stay of the foreclosure sale to allow mediation to proceed if the lender does not agree.

According to some timelines, it can take up to 270 days before there is actually a foreclosure in Maryland, and even then a court must ratify the sale, the buyer must go to an agreement and, if the homeowner refuses to leave, obtain a court order to evict the homeowner. the house. It’s not surprising in Maryland for a homeowner to be able to stay in a home for a year or more after a default.

In all of these jurisdictions, a homeowner can file for Chapter 13 bankruptcy to stop a foreclosure sale and try to fix the default for 60 months so they can keep their home. Many people file for bankruptcy right before the foreclosure sale, so that even if the bankruptcy ultimately fails, they can maximize the amount of time they can stay in their home.

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