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Know the Key Terms
- Default
Default is a legal term meaning that a party has been served with the summons and complaint and has not filed an Answer.
Default can be requested 35 days after Service of Process is completed.
- Final Judgement
Completes the foreclosure process.
In most cases, there is no Sheriff's sale -- the Final Judgement is your new Deed to the property.
If the federal government holds a lien on the property, however, then a Sheriff's sale must be scheduled.
- 'first in time, first in right'
The first lien to be filed has the first position in priority over all other liens.
- Order Setting Time
After all parties have been served, the Court issues an Order setting the deadline for redemption.
The deadline is generally 2 - 3 months after the Order Setting Time is entered.
- Pre-Action Notice
Also known as a Thirty Day Letter.
Certified letter to all persons with a recorded interest in the property.
If sent 30 days before the complaint is filed, then redemption will include statutory fees and costs.
- Redemption
Paying off the tax line.
Only the owner, mortgage holder, and prior tax lien holders may redeem the tax lien.
Over 95% of liens are redeemed.
Newer tax liens (a.k.a. 'Subsequent liens') may not redeem older liens.
- Ripe to Foreclosure
Generally tax liens cannot be foreclosed until 2 years after the tax sale.
However, the waiting period is only 6 months for liens on abandoned properties and liens that are sold by assignment from the municipality as opposed to auction.
- Service of Process
An authorized agent 'serves' (hand delivers) the foreclosure complaint and summons to each defendant.
If someone cannot be served in person, then under certain circumstances service can be made by mail or publication.
- Statutory Waiting Periods
There are over 120 days of statutory waiting periods which slow down the foreclosure process to give the owner time to redeem.
The laws which govern the foreclosure process require these delays such as the Thirty-Day letter, Default, and Order Setting Time which are described in this index.
- Subsequent Taxes
'SUBS' are taxes or assessments that become due after a tax certificate is issued.
The tax lien holder may pay the Subs and have the taxes added to the principal amount of the lien.
Subs accrue at 18% regardless of the interest rate stated on the tax certificate.
Foreclosure cannot be completed unless Subs have been paid through at least the date that the complaint was filed.
- Thirty Day Letter
Also known as a Pre-Action Notice.
Certified letter to all persons with a recorded interest in the property.
If sent 30 days before the complaint is filed, then redemption will include statutory fees and costs.
- Title Search
A formal written report listing all recorded interests in the property such as the owners, mortgages, judgments and other liens.
Title searchers are human and occasionally make mistakes.
If a title search omits a recorded mortgage or other lien, the foreclosure will not result in clean title and re-foreclosure proceedings will have to be completed in order to obtain clear title.
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