Foreclosure by sale is a legal process that begins when a mortgage lender files a lawsuit against the borrower. If the borrower does not respond, the lender automatically wins the case. If the borrower does respond, the court will move on to the litigation process. Depending on the value of the home and the amount of debt, the court will order either a strict foreclosure or a foreclosure through sale.
The foreclosure process is mainly governed by state laws, although some federal laws limit what mortgage lenders can do during this process. In order to obtain a foreclosure judgment, both parties must have breached their obligations or, if there is a defense and the case is contested, the trial must be concluded or a motion for summary judgment must be granted. If there is little or no capital in the property, it is not recommended to apply for foreclosure through sale as it will result in additional attorney fees, auction costs and appraisal costs. If there is significant equity in the home, an objection to a strict foreclosure must be filed and a motion to foreclose by selling must be made. The repayment period is the time between the foreclosure award by sale and the date of sale. Bankruptcy protection can provide a short break from foreclosure proceedings, however, unless the mortgage lender is willing to modify the mortgage, nothing prevents them from going to Bankruptcy Court to lift the suspension and resume proceedings. If the property is sold at a public auction for less than the amount of the loan that guarantees the underlying mortgage, then a deficiency judgment can be issued.
A foreclosure by market sale combines characteristics of both a short sale and strict foreclosure process. Once all legal days have elapsed, a foreclosure certificate is filed in property records which serves as proof that the lender now owns it. Connecticut law allows lenders to seek deficiency judgments in both sales decree foreclosures and strict foreclosures. Servicers must provide borrowers with opportunities to mitigate losses, consider every stage of foreclosure and strictly comply with foreclosure laws. Forms must be submitted if you are sued in a foreclosure case and submit a certificate for Foreclosure Mediation Program. The court will order strict foreclosure when it determines that if you sold your home it would have little or no value due to total amount of mortgage debt, other liens and foreclosure rates being equal to or greater than assessed fair market value of your home.
