The Boat Has Left the Dock Before it Left the Dock

Posted by kevin on April 20, 2015 under Foreclosure Blog | Comments are off for this article

In the past week, I have received telephone calls from 5 homeowners whose homes were in foreclosure. 3 of the owners told me that they had received notice from the sheriff that a sale has been scheduled. In other words, final judgment had already been entered. I quoted them a fee, and when they picked themselves off the floor, I told them that the chances of overturning the judgment were slim and might not justify the expense involved.

If you have had the chance to read this blog (or other blogs dealing with foreclosures), you will know that in NJ, the courts have made it very difficult for borrowers to succeed in litigation. In 2011 just after pro borrower decisions, I was getting positive results in court on a regular basis. This made it easier to negotiate a settlement. One by one, however, defenses have been whittled down by the courts which has made litigation and settlement more difficult.

One of the first areas where the courts hit back at borrowers were in cases dealing with post judgment relief. What does that mean? Well, for the most part, it means that the borrower does not file an answer to the complaint, but waits until final judgment is entered before he or she hires an attorney to contest the foreclosure.

To set aside the final judgment, a borrower must file a motion to vacate the judgment. The test is that the borrower must show excusable neglect plus a meritorious defense. This a a pretty high standard, made even tougher by a series of unpublished decisions that came down from late 2011 to 2013 which further cut off access to the courts in post judgment situations. Add to the high standard to vacate and the tough case law, the penchant of many judges to give lenders more than one bite at the apple in opposing the motion to vacate. Your lawyer winds up writing 2 or more briefs and making as many appearances. And, after all that work, you lose about 90% of these motions on the trial level.

On a practical level, reviewing all the documents, drafting the initial papers, going to court and then writing supplemental briefs with two or more court appearances is time consuming and, thus, costly. It can easily run into $7500-9,000 worth of time. So, I tell clients unless you have that one in a thousand fact pattern, you are probably wasting your money.

So what do you do? If you are behind on your mortgage, you will get a letter of default from the servicer. Then, you will get a Notice of Intent to Foreclose along with the ‘we are your bank and we are here to help’ letter. That is the time that you hire an attorney. It gives you the best chance to get what you want, and it gives an experienced defense attorney the most flexibility in shaping a defense.

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