Stop ForeclosureIf you’ve been served with a foreclosure complaint, you probably have a lot of questions. Who are all these defendants? What does my homeowners’ association have to do with it? Why is the county treasurer listed? Who is “John Doe”? What’s this about an “unknown spouse” when I’ve been married only once—to my current spouse, who is also named in the complaint? We’ll address these questions in this article. There are three critical issues:

  • If you own the home, do you want to keep it?
  • Among all the defendants named in the complaint, whose liens will be paid if the home is sold?
  • If you have an interest in the house itself, such as that arising from a land contract, but don’t own it, can that interest be protected?

If you’ve received foreclosure papers from a court, you should contact a foreclosure defense attorney as soon as possible. There could be a lot at stake.

At Slater & Zurz LLP, our experienced foreclosure defense team can help with your foreclosure suit, whether you’re the homeowner or a lienholder whose debt is secured by the home. Regardless of what your interest in the home may be, it’s important that you act quickly to protect your interests. We’ve been serving the legal needs of our Ohio clients for over 40 years, and have developed a long track record of success. Call or email our professional foreclosure defense team to schedule a free consultation. We’ll review your foreclosure papers, answer your questions, and let you know what your rights and options are.

Everyone with any interest in the home must be included in the foreclosure suit.

In a foreclosure suit, the party seeking to foreclose on the property has to include as defendants everyone with a lien or any other interest in the property. In addition to the homeowner, foreclosure defendants include potential spouses and ex-spouses, other lenders, possible tenants, contractors who put in a porch or remodeled the kitchen (if they have a mechanic’s lien), and taxing authorities.

Not only do all persons with a potential interest in the property have the right to notice of the foreclosure suit and an opportunity to respond, but the priority of each of their claims must be established. Priority determines the order in which lienholders and other creditors are paid if the home is sold.

If the foreclosure is ultimately granted, all liens will be extinguished. Although liens against the property will be cancelled, the underlying debts will remain. If the proceeds of a foreclosure sale are insufficient to pay all claims, those creditors with the lowest priority may not be paid. If the homeowner loses the home through foreclosure, there is often little incentive to prevent him or her from filing bankruptcy to eliminate any remaining unpaid debts.

  • Local taxing authorities must be included.
    • If you’ve paid your taxes, the taxing authority still must be named. Don’t worry!

The local taxing authority will always be named in any foreclosure suit. This can be alarming if you don’t owe any taxes at the time the complaint is filed. The taxing authority is listed for two reasons:

  • The taxing authority has the first priority among all liens. Any back taxes will be paid before the foreclosing party or any other lienholders are paid.
  • Even if no taxes are presently due, the taxing authority is still entitled to all taxes due up to the day of the sheriff’s sale.

Even if you do owe taxes (and assuming that the taxing authority is not the foreclosing plaintiff), the taxing authority is not a formidable defendant. Local government entities will usually enter into payment plans to avoid foreclosure. If the other lienholders are on board it is unlikely that a deal will fail due to back taxes.

  • One exception: if a taxing authority has sold your tax debt to a third party, the third party may not be very accommodating. Beware!

Some municipalities, counties, and other local government entities auction past due tax debts to third-party companies for collection. These companies are often difficult to deal with. If you find yourself dealing with one of these companies, it is essential that you contact a foreclosure defense attorney. These companies bought your past due tax debt solely to turn a profit. They can be extremely difficult to work with, and often prefer to rush cases to foreclosure to reap a quick reward.

These companies are often out-of-state entities that do bulk business. This makes it difficult to identify or involve knowledgeable people within any particular debt collection company. It is also difficult to reach people within the company who have the authority to resolve the tax debt prior to litigation. Ultimately, the judge can order the debt collection company to produce a representative with the authority to resolve the company’s claim. However, the court must be convinced that such an order is necessary—a task best handled by a foreclosure defense lawyer.

At Slater & Zurz, we’re dedicated to vindicating the rights of homeowners who may be unfairly stripped of their rights by lenders and other creditors whose only concern is their own profitability. We will not be bullied into submission by unscrupulous “creditors” with questionable claims. We will aggressively investigate and pursue every claim against you, and insist that every person and entity seeking to profit from the foreclosure, including any out-of-state debt buyers who may have paid substantially less than the face amount of the debt, document their asserted claims and prove their claimed priority status before the case is submitted to the court for decision.

  • Homeowners’ associations may be included in the foreclosure suit.  

Condominium and other homeowners’ associations are likely to be listed as defendants. These defendants can be unpredictable, as each association is governed by different rules and bylaws. Some associations are easy to work with; others are more difficult. Dealing with these entities can be affected by the personalities involved as well as any legal issues.

A starting point for negotiations is to get a copy of any bylaws adopted by the association. Next, you should determine whether you have any legal obligation to comply with your association’s stated requirements:

  • Does your deed require you to pay dues or fees of any kind?
  • Does your deed restrict your ability to use or sell your property beyond the limitations in state or local laws and ordinances?
  • Did you sign any separate agreement to pay dues or fees, or to comply with specific limitations not referenced in your deed?

If you are uncertain about your obligations, a foreclosure defense attorney can help! In some instances, home or condo owners never signed anything agreeing to make “required” payments or accept novel restrictions on the sale or use of their property. If an obligation is not included in your deed or any other agreement you may have signed, you may not be obligated to pay or comply.

At Slater & Zurz, our experienced foreclosure defense team can determine what you are legally obligated to pay to condo or homeowners’ associations and other creditors. Our objective in representing a homeowner is to minimize the totality of all debts that must be paid or settled, whether you want to retain ownership of your home or walk away without significant financial consequences. Call or email us for a free, no-obligation consultation. We’ll look at your foreclosure papers, let you know what your options are, and recommend the best route to success based on your objectives.

  • Home equity creditors must also be named as defendants.

If you have a home equity line of credit, the creditor must be listed as a defendant, since the creditor may be entitled to some equity in the home, subject to its priority. The home equity creditor will be listed as a defendant even if you are not behind in payments, or currently have a zero balance. Not everyone listed as a defendant has a claim, but simply could have a claim, therefore entitling that potential creditor to notice of the litigation and an opportunity to respond to the complaint.

  • Other lienholders also must be included in any foreclosure suit.

A foreclosure case may include other lienholders as well. Anyone who has a valid judgment against a property owner can attempt to place a lien on that individual’s real property to ensure that the debt is paid prior to any sale of the real estate. These debts can include anything from an old credit card debt to a mechanic’s lien for a home renovation. Sometimes when debts are paid, the liens aren’t properly removed by the party who received the payment. If there are any questionable liens listed in your foreclosure case, you should speak to a foreclosure defense attorney.

  • “John Doe,” unknown spouses, and other unnamed defendants also may be included.

Plaintiffs in foreclosure cases often try to protect themselves, and the validity of the foreclosure proceedings, by adding unnamed defendants described with reference to their respective interests vis-à-vis the property. These can include an “unnamed spouse” or “unnamed tenant.” This does not mean that you have a spouse that no one knows about, or that there’s a tenant hiding in your basement—the plaintiff is simply covering all the bases. If someone should have been named and was not, that can blow up the entire process later. As long as “unknown spouses” and the others are named as defendants, and given notice by publication of the complaint in a local newspaper, the foreclosure is likely to be shielded from future attack.

A tenant can have an equitable interest or lien arising from an agreement governing the tenancy, such as a land contract. In land contract cases, determining who has what kind of interest, as well as the value of that interest, can become complicated.

It’s therefore essential that you contact a foreclosure defense lawyer, to help you sort out these various interests.

If you don’t own the property being foreclosed upon, a foreclosure defense attorney can help you preserve a land contract or other interest in the property.

If you are named as a defendant in a foreclosure action, but are not the titled homeowner, you should still consult a foreclosure defense lawyer to assess your rights and options.

If you have a land contract under which you are purchasing the property being foreclosed upon, a foreclosure defense attorney can assist in preserving your interest in the land contract. One of our foreclosure defense attorneys at Slater & Zurz can represent you in a third party’s case against your land contract vendor, and challenge the third party’s lien if it impairs your interest in the property. If a third party’s claim threatens your rights with respect to the property you’re buying under a land contract, call or email us for a free consultation. We will assess the risks posed by the third party’s claim, and recommend what we believe is the most effective strategy for protecting your investment.

If you have a lien or other interest in property subject to foreclosure, you should be involved in the litigation. You can work in the litigation towards a settlement to ensure that if the titled property owner keeps the property, the debt secured by your lien will be paid. If the property owner is likely to lose the property, it’s essential that you participate in the litigation to elevate your claim’s priority above that of as many other claims as possible.

Priority establishes the order in which claims are paid from the proceeds of the sheriff’s sale. Often the priority order is based on whose claim was first in time, with secured claims (e.g., those backed by a lien) receiving higher priority than unsecured claims. Establishing priority can quickly become complicated in light of several issues, including when the liens at issue were recorded, and whether they were properly recorded.

At Slater & Zurz, our foreclosure defense lawyers are ready to help with your case. This applies to all the parties named in a foreclosure, because each party named has different risks and rewards in going forward with foreclosure litigation.

A home is a major investment. Trust an experienced, full-service law firm to assist you in your efforts to protect that investment.

At Slater & Zurz, we understand what your home means to you, whether you’re focused on its value as an investment or whether you’ve developed an emotional attachment to it over the years. We’re aware of all the options available to you, whether you’re willing to do whatever it takes to keep your home or would rather surrender it to preserve your credit status. Either way, our track record of success demonstrates that we know how to win, and we’ll pull out all the stops if that’s what it takes. Call or email our foreclosure defense team to schedule a free consultation with no obligation. One of our foreclosure attorneys will review your court papers and related documents, and will discuss your short-term needs and long-term goals. Based on that information, we’ll craft a plan to address the foreclosure and achieve your objectives. We’ll be there for you when you need us!