A judicial foreclosure occurs when a mortgage owner pursues a foreclosure by filing a lawsuit in court. This contrasts with the non-judicial foreclosure process, in which the mortgage owner does not go through court. As a homeowner, your strategy in fighting a foreclosure will differ depending on whether the foreclosure is judicial or non-judicial. In a judicial foreclosure, you will need to respond to the lawsuit once you receive the summons and complaint. If you do not respond within the required time, a default judgment will be entered in favor of the lender, and it can proceed with the foreclosure sale.
However, the lender has the burden of proof in these cases, and a prompt response (known as an answer) can defeat or at least delay the foreclosure. A homeowner usually will attack holes or inaccuracies in the evidence provided by the lender. This evidence may include the mortgage, the promissory note, statements of payments, affidavits, and other documents that demonstrate the existence of the loan and the default. If you do not challenge the accuracy of the evidence, a judge likely will assume that it is accurate.
In addition to filing your answer and attacking the lender’s evidence, you can submit your own evidence. This might consist of your own affidavits or canceled checks that you submitted but that were not taken into account by the lender. Once the court has received all of the evidence, the lender may seek summary judgment. This is a legal way of saying that the lender should prevail as a matter of law because there is no dispute about the facts, and the law is on their side. You can oppose this motion, which may lead to a hearing. If the court grants summary judgment in favor of the lender, this will end the case and result in a foreclosure. If the court finds that material facts are in dispute, the lender will not be entitled to judgment, and the case will proceed toward trial. The lender has the burden of proof in a summary judgment hearing, just as they do in the overall case.
The next step is the discovery process. If the case proceeds past summary judgment, each side will want to gather evidence from the other side to help narrow the issues and more clearly articulate their positions. Discovery tools span a broad range from depositions and interrogatories to requests for production and requests for admissions.
Trials in Judicial Foreclosure Cases
The trial is the final hearing in the case, at which the lender will need to prove that it has the right to foreclose on the home. It will have the opportunity to present its case, including the testimony of witnesses. The homeowner then will be able to present their case against the foreclosure, also including witness testimony if needed. (Sometimes the homeowner will testify as a witness.) Each side has the right to cross-examine the witnesses of the other side. The judge then will decide who seems more credible. You probably do not have a right to a jury trial in a foreclosure proceeding, so the judge will make the final decision.
If the judge rules in favor of the lender, they will issue an order for the foreclosure and possibly set the date for the foreclosure sale. If the judge rules in favor of the homeowner, they will dismiss the lender’s case. This will save your home at least temporarily, but a dismissal without prejudice means that the lender can refile the case in the future.
The strict foreclosure process in Vermont and Connecticut allows a judge to bypass a foreclosure sale upon ruling for a lender. Instead, they can transfer title to the foreclosing party immediately. Read more here about strict foreclosures if you live in Vermont or Connecticut.