Going through a home foreclosure can make you not want to do your lender any favors, including maintaining the house in good condition and appearing at court hearings. Upholding these obligations can make the foreclosure process as smooth as possible and can even help reduce your liability at its conclusion. Failing to act in good faith during the foreclosure can increase your financial liability and may result in additional lawsuits.
Appearing in Court
As the borrower, you have a duty to appear in court and answer the lender's foreclosure lawsuit. Failing to appear in court can allow the lender to win a default judgment against you without any protest. This enables your mortgage lender to foreclose on your property and you lose the right to have a voice in court. Appearing at the foreclosure hearing is the best chance you have to point out inconsistencies in your mortgage document or illegal practices by your lender that could cause the court to rule in your favor and halt the foreclosure altogether.
Maintaining the Property
A mortgage document usually contains several clauses requiring the borrower to protect the value of the property throughout the life of the loan. This includes maintaining the grounds and repairing damage to the physical dwelling to preserve the equity in the home and protect the lender's investment. The obligation to protect the home persists for you as the borrower even in foreclosure. The mortgage lender could consider damaging the property to reduce the overall value of the home as vandalism and file an additional civil lawsuit or criminal charges against you as a result.
Vacating the Property
Once the lender sells the property through public auction, it's your duty as the former borrower to vacate the premises and remove all your belongings, including furniture, appliances and personal possessions. Depending on your state's laws, you may be able to stay in the home until the conclusion of the redemption period, which can last up to a year. Refusing to move out of the home after the auction could force the lender to contact the police or local sheriff's department, who will force you to vacate. This can only add to the embarrassment of losing your home in foreclosure by bringing the process further into the public light.
Payments and Property Taxes
During the foreclosure, your obligation to pay property taxes on your home may persist if the lender does not assume the payments. If you don't pay these taxes, you could wind up in court again as the local tax authority moves to seize the property. After your foreclosure and conclusion of the redemption period, the period you have to pay off your mortgage and retake the property, if your former lender cannot recoup the entirety of your mortgage debt, you may have to answer an additional lawsuit called a deficiency judgment. This judgment can obligate you to repay the difference in mortgage debt, leaving you owing thousands of additional dollars and still without a place to live.
Tags: your mortgage, appear court, conclusion redemption, conclusion redemption period, home foreclosure, mortgage debt, mortgage document
