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It’s important that you know and understand your rights after a foreclosure.

The foreclosure battle of Mary Lee Ward has recently gained national media attention as efforts to help her save her home manifested.  CNN first broke national coverage of the 82-year-old great-grandmother’s fight to remain in her New York home after a botched refinance attempt in the mid 1990s led to the current predicament.  With the help of many supporters and protesters holding handmade signs of support on the front lawn, New York State Assemblywoman Annette Robinson made an announcement. “We spoke to the Marshal.  The Marshal will not be taking any action today.”  While this specific circumstance is beginning to look like a fairytale ending to a nightmare for Ward, this will not be the case for the 10 million plus Americans currently going through the process.

Foreclosure is the legal process that occurs when a borrower severely defaults on their mortgage payments.  The mortgage lender sells the mortgaged property and uses the cash to put toward the outstanding loan.  The rights of both the borrower who lost the home to foreclosure and the person who bought the home at the foreclosure sale are involved in the mortgage foreclosure process.

Some states have a right of redemption rule that allows the borrower who lost their home the right to reclaim that property by making a payment in full of the sum of the unpaid loan plus cost.  The redemption period varies, and the deed issued is only in effect after the expiration of the redemption period.  Michigan is a title theory state, meaning the property title remains in a trust until the full payment is received for the underlying mortgage loan.

Non-judicial foreclosure is a method used in 30 states.  This type requires a foreclosure by advertisement notice but does not require court action.

The power of sale clause, a provision in most mortgages, allows an attorney to act as a representative of the lender and foreclose on the property in order to satisfy the underlying defaulted loan.  Foreclosures are typically sold at an auction conducted by a sheriff.

Before the auction can take place, the lender must publish a notice of sale for four consecutive weeks in a newspaper where the property is located.  After 15 days of the first publication, a notice containing the following must be placed at the property to be foreclosed:

• Name of mortgagor
• Name of the party and assignee
• Date of mortgage and it’s recordation
• Delinquent amount
• Description of the property
• Length of the redemption period (if applicable)
• Date and place of the foreclosure sale

The lender can also be a part of the auction to the highest bidder by the Sheriff.

Lenders who choose to go to court for a judicial foreclosure leave the final judgment up to the magistrate or judge.  Judicial foreclosure is more common for mortgages that do not have a power of sale clause.  In court, a complaint is filed and a recorded document that provides public notice that the property is being foreclosed on, a lis pendens, is also filed.

Uncontested non-judicial foreclosures take around 60 days to complete.  However the process can be delayed if the borrower files for bankruptcy, seeks an adjournment of sales, or further contests the action in court.

If you’re currently in foreclosure and any of the procedures mentioned in this article were omitted from your process, contact your attorney to further investigate if your rights were compromised.  You may not have the nationwide support of protesters standing in Ms. Ward’s corner, but at least you will have a leg to stand on in court.

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