Lis Pendens and Foreclosure

If you are facing foreclosure on your home, there is a good chance you will receive a lis pendens at some point during the process. The term lis pendens means “a suit pending” in Latin and is used to put the public on notice that there is a pending lawsuit over a particular real estate or a piece of land. Do You Need a Real Estate Attorney? If you need legal help with a real estate transaction, set up a FREE consultation today. CONTACT US NOW A lis pendens can significantly af…

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If you need legal help with a real estate transaction, set up a FREE consultation today.

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A lis pendens can significantly affect the ownership of a property, and it is important that you understand all the legal implications of this document. If you have received a lis Pendens, you should contact a lawyer to learn about your options and next steps. The lawyers at Moshes Law, P.C. are experienced in lis pendens and foreclosure. There is no reason to face these proceedings alone; call today for a free consultation.

What Is Lis Pendens Foreclosure

A lis pendens can be used in a variety of proceedings like divorce or contractual disputes. The most common use of a lis pendens is during foreclosure proceedings. This document is filed by the lender at the beginning of the foreclosure process after the homeowner defaults on their mortgage payments. Essentially, a lis pendens ensures that the homeowner is legally liable for any unpaid fees associated with the real estate, not the lender.

A lis pendens is important in foreclosure because it serves to notify any third parties – like potential buyers – that there is a dispute concerning the property. When purchasing property, buyers generally want real estate with a clean title. A lis pendens will deter buyers and prevent the owner from selling the property before the lawsuit is resolved.

Lis Pendens and Foreclosure

Any party who claims rights or ownership to real estate can legally file a lis pendens. If a homeowner defaults on their mortgage payments and breaks a contract with the creditor, the creditor can file a lis pendens on the property when they begin the foreclosure proceedings.

The two main types of foreclosure proceedings are judicial foreclosure and non-judicial foreclosure. In a judicial foreclosure, lenders must file a notice and complaint with the court. In some states, a lis pendens is an optional document; however, twenty-two states, New York included, require that the lender files a lis pendens along with the foreclosure documents. In these states, a judgment of foreclosure cannot be granted unless the lis pendens has been on file for twenty days or more. In a non-judicial foreclosure, the creditor doesn’t file a lis pendens but instead records a notice of default.

Whether a lender is required to file a lis pendens or chooses to file the document, it needs to be filed with the county recorder’s office in the county the foreclosure is taking place. A lis pendens generally has information about the property like a description and includes details about the nature of the claim.

Once a lis pendens is filed, the real estate is considered to be in pre-foreclosure. This is sometimes referred to as a pre-foreclosure Lis pendens. The property will stay in this status until the property is sold.

Effects

A lis pendens can have many effects on the real estate and the foreclosure process. Mainly, it affects ownership and the homeowner’s ability to sell the property. When a lis pendens is filed, it is a public record. If a potential buyer researches the property to ensure the title is clear, they will see the lis pendens and the pending lawsuit. This deters most buyers due to the legal issues and processes involved in purchasing a property that is subject to a lawsuit.

A lis pendens can also affect a homeowner in the future if they wish to purchase another house. Because this document is public record, lenders and even homeowners insurance companies can view the lis pendens and potentially deny financing or insurance coverage.

Payment

One way a homeowner can get a lis pendens removed or expunged is to satisfy the claim made in the lis pendens. A homeowner can post a bond with the court – either money or collateral – to cover the amount claimed in the lis pendens. The court will determine how large the bond must be based on the property value and additional factors. The process to satisfy a lis pendens with payment varies based on state laws.

Bankruptcy

When a homeowner defaults on their mortgage, it can be assumed that they are probably facing other financial issues as well. Unfortunately, foreclosures and bankruptcies often go hand in hand.

Sometimes, a homeowner can use bankruptcy as a strategic way to pause the lis pendens foreclosure and buy themselves some more time. This varies by state and whether bankruptcy will end up resulting in an extension of time on the lis pendens depends on the court.

If you are subject to a foreclosure lis pendens and you are considering bankruptcy, you should first contact Moshes Law, P.C. for a free consultation. Your experienced foreclosure lawyer from Moshes Law, P.C., will be able to guide you through this process and help you make the best decision for your future.

Homeowners Associations

Many homeowners don’t realize that if they belong to a homeowners association and fail to pay their dues, the HOA may have the right to file a lis pendens and foreclose on the property.

Every homeowner’s association charges fees and assessments that must be paid by property owners who belong to the association. The HOA will also have covenants and will be subject to state laws that give the HOA rights to get a lien on a property in the event the homeowner fails to pay the assessments.

If an HOA files a lien, it will automatically attach to the property, and the HOA has the option of filing the lien with the county recorder’s office to create a public notice of the legal action. The HOA now has the right to foreclose on the property and force the sale of the home.

When does a Lis Pendens Expire in a Foreclosure Action?

The length of time a lis pendens lasts on a foreclosure action is subject to state law. In some states, a lis pendens can expire in just a few months, while in other states, like New York, a lis pendens has a life of three years. In New York, once a lis pendens expires, it cannot be filed again. Your foreclosure lawyer will be able to educate you on all your state’s foreclosure laws and lis pendens expiration times.

How Long from Notice of Lis Pendens to Foreclosure

Like the expiration time period, how long from notice of Lis pendens to foreclosure will be based on local and state laws. Any state that requires a Lis pendens to be filed in a foreclosure proceeding requires that the Lis pendens be on record for at least twenty days to issue a foreclosure order.

If you have questions about a lis pendens and foreclosure, it is best to consult with an experienced lawyer for answers that are accurate for your state and situation.

What Is the Difference Between Foreclosure and Lis Pendens?

While a lis pendens and a foreclosure are part of the same proceedings, they are not the same document or legal process. A foreclosure is a formal court proceeding in which a lender attempts to recover the balance of a loan from a homeowner who has defaulted on mortgage payments. The foreclosure allows the lender to reclaim ownership of the real estate and sell the property to satisfy the existing loan.

A lis pendens, on the other hand, is a notice that lenders use when they initiate the foreclosure. The lis pendens notifies all parties that the property is part of a lawsuit and is filed with the county recorder’s office and made public record. Twenty-two states, New York being one of them, require that a lis pendens be filed with a foreclosure; however, it is an optional document in all other states.

Can a Lis Pendens Stop a Foreclosure

A lis pendens is not used to stop foreclosure because it is a document that lenders file along with a foreclosure proceeding. However, if a homeowner believes that the lis pendens is not founded on a duly recorded instrument, they may have the option to challenge the lis pendens.

A homeowner needs to show the court that the lis pendens filed against the property is founded on fraud or a non-recorded document for the court to consider discharging the lis pendens. This is very difficult to do, though, because any party that can show a good faith viable claim on the property has the right to file a lis pendens.

While challenging a lis pendens may not stop a foreclosure, the legal proceedings may delay the process.

Get Help from Foreclosure Right Now

If you are facing a foreclosure and have just received a lis pendens, you should contact a lawyer right away. The foreclosure process can be a tough legal battle to navigate, and a lis pendens can have lasting effects on your ability to get a mortgage or homeowner’s insurance.

At Moshes Law, P.C., we have experienced lawyers waiting to help guide you through this difficult time. Moshes Law Office offers free consultations so you can sit down with an attorney, go over your case, learn about your options, and make the best decision for your home and your future.

Don’t hesitate to call today for your free consultation.