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Lis Pendens and Foreclosure

Founding Member of Moshes Law, P.C.
During his years of practice, Yuriy has concentrated in litigation and real estate transactions as his areas of expertise.

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…

Do You Need a Real Estate Attorney?

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

A legal notice regarding pending litigation can have a profound impact on property ownership title to the property. It’s crucial to grasp the full legal ramifications of this notice. If you’ve received such a notice, seeking advice from a qualified attorney is advisable to explore your available courses of action. Moshes Law, P.C. specializes in handling matters related to pending litigation and foreclosure. Don’t navigate these legal challenges solo; reach out today for a complimentary consultation.

What Is Lis Pendens Foreclosure

A legal notice plays a crucial role in various legal matters such as divorce cases or disputes over contracts. In foreclosure proceedings, it’s commonly utilized. This notice, typically initiated by the lender when a homeowner fails to meet mortgage payments, ensures that the homeowner bears responsibility for any outstanding real estate fees rather than the lender.

In foreclosure cases, this notification serves to alert interested parties, such as potential buyers, about an ongoing property dispute. Prospective buyers typically prefer properties with clear titles. This notice discourages buyers and prohibits the property owner from selling the property until the legal dispute, or pending suit, is settled.

Lis Pendens and Foreclosure

Any party asserting rights or ownership to real estate or interest in real property can legally file a notice of pending litigation. If a homeowner defaults on mortgage payments and breaches a contract with the creditor, the creditor can file such notice on the property upon initiating foreclosure proceedings.

There are two primary types of foreclosure proceedings: judicial and non-judicial. In a judicial foreclosure, lenders need to submit a notice and complaint to the court. In certain states, a specific document, which is optional in some places, is required. Twenty-two states, including New York, mandate that lenders file this document along with foreclosure paperwork. In these states, a foreclosure judgment cannot be issued unless this specific document has been on file for at least twenty days. On the other hand, in a non-judicial foreclosure, the creditor doesn’t submit the same document but instead records a notice of default, providing constructive notice.

Whether a lender is obligated or opts to submit a notice of pending litigation, it must be lodged with the county recorder’s office in the jurisdiction where the foreclosure is occurring. This notice typically contains property details such as a description and outlines the nature of the claim, specifically pertaining to real property.

Upon submission of the notice, the property enters a pre-foreclosure phase. This interim period, often termed pre-foreclosure, persists until the property is sold or reaches a final judgment.

Effects

A legal notice about ongoing litigation can bring various implications to real estate and foreclosure proceedings. Its primary impact involves ownership and the homeowner’s ability to sell their property. Once filed, this notice becomes a part of the public record. Any potential buyer conducting a title check will encounter the notice and the ongoing lawsuit details. Consequently, most buyers are discouraged from pursuing such a property due to the legal entanglements and complexities associated with it.

Moreover, this notice can have repercussions for homeowners in the future, especially if they intend to buy another house. As this document is publicly accessible, lenders and homeowners’ insurance companies may access it. This visibility could potentially lead to denial of financing or insurance coverage.

Payment

One option is to address the underlying issue causing the claim. Another approach involves posting a bond with the court, which can be either money or collateral, covering the amount specified in the claim. The court determines the size of the bond, considering factors such as property value. The process for resolving a claim through payment varies according to 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.

At times, homeowners may employ bankruptcy strategically to temporarily halt foreclosure proceedings, allowing them additional time. The effectiveness of this approach varies across states, as the outcome concerning the extension of time depends on the court’s decision.

If you are subject to a foreclosure 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 may not be aware that failing to pay dues to their homeowners association could result in the HOA initiating foreclosure proceedings on their property.

Every homeowner’s association imposes fees and assessments that are obligatory for property owners affiliated with the association. Additionally, the HOA establishes covenants and adheres to state laws, granting it the authority to place a lien on real property should the homeowner default on the payments.

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 duration for which a notice of pending litigation lasts in a foreclosure case depends on the laws of the state. In certain states, this notice may lapse within a few months, whereas in places like New York, it remains effective for up to three years. Once the notice expires in New York, it cannot be refiled. Your foreclosure attorney can provide comprehensive guidance on your state’s foreclosure regulations and the expiration periods for such notices.

How Long from Notice of Lis Pendens to Foreclosure

Similar to the expiration period, the duration between the notice and foreclosure process is determined by local and state laws. In jurisdictions where filing a notice is a prerequisite for foreclosure, it must be recorded for a minimum of twenty days before a foreclosure order can be issued.

For accurate information pertaining to your state and circumstances regarding foreclosure and any related notices, it is advisable to seek guidance from a knowledgeable attorney.

What Is the Difference Between Foreclosure and Lis Pendens?

In the context of real estate proceedings, it’s important to differentiate between a foreclosure and a lis pendens. While both are integral parts of the legal process, they serve distinct purposes.

Foreclosure entails a formal court procedure initiated by a lender to recover outstanding loan amounts from a homeowner who has defaulted on mortgage payments. Through foreclosure, the lender seeks to regain ownership of the property and sell it to settle the debt.

In contrast, a lis pendens serves as a notice issued by lenders at the onset of foreclosure proceedings. It informs all concerned parties that the property is subject to litigation and is recorded in the county recorder’s office as a public record. While mandatory in certain states like New York as part of foreclosure procedures, it remains an optional filing in others.

Can a Lis Pendens Stop a Foreclosure

When a homeowner faces foreclosure, they cannot use a specific document to stop the process. Lenders usually file a particular document, commonly known as part of the foreclosure process. However, if the homeowner questions the document’s validity, they have the right to challenge it.

Challenging this document requires the homeowner to prove in court that it’s either based on fraud or a document that hasn’t been officially recorded. Yet, this can be a difficult task because anyone with a legitimate claim on the property can submit such a document.

While contesting this document might not completely halt the foreclosure, taking legal action could potentially delay the proceedings.

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. Navigating the foreclosure process can pose significant legal challenges, potentially impacting your eligibility for obtaining a mortgage or homeowner’s insurance in the long term.

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.

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