Falling behind on your mortgage can force you to learn many legal concepts and words that you probably don't come across unless you're a lawyer, such as judicial or clerk's default.
What is a judicial or clerk's default?
A judicial or clerk's default is "a binding judgment in favor of either party based on some failure to take action by the other party. Most often, it is a judgment in favor of a plaintiff when the defendant has not responded to a summons or has failed to appear before a court of law.”
A judicial default is issued by a judge, and a clerk's default is issued by a clerk of the court. How does that come into play in foreclosure? It has to do with the lawsuit that follows as a result of defaulting on payments.
If you live in a judicial foreclosure state, your lender must file a lawsuit in court in order to foreclose on you. They will be the plaintiff and you will be the defendant in the lawsuit. The plaintiff starts foreclosure by filing a complaint with the court. A copy of the complaint will be served to you along with a summons.
Answering (or not answering) Complaint
You have a right to answer the complaint and deny or admit the charges contained in it and raise your own affirmative defenses. (Affirmative defenses are facts raised by the defendant that defeat or mitigate the consequences of their conduct.)
If you don't answer the complaint in the required time period (about 20 to 30 days in most states), the plaintiff can file a motion for judicial default against you. If they get it, the allegations in the complaint are considered true and correct and you can't challenge them over the course of the action unless you get the default vacated.
Unless you want to be foreclosed on as soon as possible, you should take advantage of your right to respond to the complaint. It's putting up a fight and making it more difficult for the plaintiff to foreclose on you.
Failing to answer the complaint is like losing a basketball game because you didn't even bother showing up to play. You don't want to hand your opponent an easy victory by not raising any defenses.
Answering the complaint is one of the important things our firm, which provides foreclosure defense and loan modification assistance, does for our clients. A recent answer we filed for a Florida client admitted that our client owned the property in question, but denied all the other allegations, and raised multiple affirmative defenses including:
- Failure of condition precedent.
- Lack of standing.
- Failure to comply with rule of federal law governing FHA-insured mortgages.
Vacating the Default
If you've already failed to answer your complaint in the allotted time, you or your attorney can file a motion to vacate or set aside the default. You have to show that you didn't answer because of a mistake, inadvertence, or excusable neglect. That's the legal standard that has to be met.
How that standard could be proven to the courts include situations such as the following:
- The complaint wasn't served to the defendant in the proper way.
- Notations from the process server are missing.
- Service that was supposed to be personal was done by publication.
- Plaintiff failed to try to serve the defendant at their residence or failed to file an affidavit of diligent search.
- Defendant was unable to file an answer for some reason, such as being in the hospital.
It's also possible for the default to be set aside by agreed order with the plaintiff's attorney. The bank's attorney could agree to set aside the default as a professional courtesy to allow the defendant's attorney to prove their case on its merits.
A default or default judgment could also be vacated or set aside because of a gross error of material fact that adversely impacts the defendant.
Even if it can't be vacated or set aside, a default judgment isn't the end of the road. The plaintiff still needs to get a final judgment before they can set a sale date, which can be called a default judgment for failure to respond to the Complaint.
This can be avoided by just answering the Complaint. Sometimes a homeowner will fail to do that because they've been talking to the department of the bank that handles loan modifications, which often doesn't communicate so well with the foreclosure department. The loan mod department can be telling them not to worry because a loan modification is coming, then in court the bank's attorney is trying to foreclose. That's called dual-tracking, which isn't supposed to happen.
The bottom line is that you should not make it any easier for your lender to take your home by not answering the summons and complaint! You can answer a complaint and defend yourself from foreclosure, but you are better off letting a professional handle it. Without experience, like the experience that comes from filing countless answers and securing more than 7,000 loan modifications, you're going to have a hard time defending yourself in the most effective way.
Images courtesy of Sira Anamwong at FreeDigitalPhotos.net