When a debtor is behind on his mortgage, the creditor has a right to bring an action in court for the sale of the real property. This is called a mortgage foreclosure action. Once the debtor/defendant is served with papers from the court, he usually has only 30 days in which to serve a formal answer or other response. Generally, the only defenses to a foreclosure are that payments were misapplied or that accounting errors occurred, but there may be other legitimate defenses.

Foreclosure actions are generally heard before a Master in Equity or Special Referee. Once the Master or Referee has issued a judgment in favor of the creditor, the property is advertised for sale. The advertisement must be in a paper of general circulation in the county where the property is located. Sales of property are normally held at the county courthouse on the first Monday of each month. In some counties, the sale may be held on a different day.

Once the property is sold, it may not net sufficient funds to pay off the entire debt. In those situations, the creditor may have the right to request that the debtor/defendant pay any deficiency amount that is owed after the sale of the property. If a deficiency judgment has been requested, the bidding on the property will remain open for 30 days after the sale date. If the deficiency judgment is waived (and it may be waived as late as immediately prior to the sale), the sale will not remain open but will be final at the advertised time of sale. The debtor may seek protection from the deficiency judgment by invoking the Appraisal Statute. This limits any deficiency to the difference between the amount of the debt and the appraised value (as opposed to the amount actually received at sale).

After the sale, the new property owner can bring an eviction action to force the removal of the occupant, but often this is unnecessary as the judgment of foreclosure and sale typically provides for this remedy.

If you find yourself in this situation, we urge you to promptly seek legal advice and representation. We will be glad to discuss your specific situation and what options may be available to you.

If you have further questions about foreclosure, please do not hesitate to contact us.

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