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Home Foreclosures: 16.4.4 Redemption in Bankruptcy

The amount necessary to redeem after a tax sale can also be paid as a secured claim in the chapter 13 bankruptcy process.343 The chapter 13 case must be brought before the debtor’s interest in the property has been terminated under state law.344 Several courts have held that because a tax lien is not consensual, the claim associated with the lien can be modified.345 Thus, for example, a debtor can pay the redemption amount with interest over the du

Home Foreclosures: 16.5 Fraud by Tax Sale Speculators

In many communities, there is a group of predatory speculators that seek to profit by manipulating the tax sale process. Some of these speculators buy many properties at tax sale. They then seek to lure unsophisticated homeowners to transfer their redemption rights in exchange for expensive or fraudulent sale-leaseback schemes or high-rate loans.360

Home Foreclosures: 16.6 Private Collection and Enforcement of Tax Liens

Sometimes taxing authorities contract out collection work to independent companies. The question arises whether these companies are governed by state and federal fair debt collection laws.363 Several courts have held that taxes are not “debts” within the meaning of the federal Fair Debt Collection Practices Act,364 but state debt collection statutes may have broader coverage.

Home Foreclosures: 16.7 Property Assessed Clean Energy (PACE) Tax Assessments

Property Assessed Clean Energy (PACE) programs provide financing for energy efficiency improvements to residential and commercial properties as an alternative to traditional loan products. These programs are authorized by local government entities under state legislation. PACE allows a property owner to finance specific home improvements by voluntarily contracting for the addition of an assessment to the property’s tax bill secured by a lien against the property. The local government entity funds the program by issuing bonds linked to homeowner tax payments.

Home Foreclosures: 16.2.2.1 Priority of Real Estate Tax Liens

If the property tax is not paid within a certain time period, the tax bill becomes a lien on the property. (Often this is the first day of the year following the year in which the tax is assessed.)14 The creation of a tax lien generally occurs automatically by operation of state statute. In some states, a lien for the tax obligation may arise automatically upon assessment even without a delinquency. The lien also typically becomes effective as against fixtures on the property.

Home Foreclosures: 16.3.3.1 Overview

Once a tax sale has been conducted, homeowners generally have three options: they can redeem the property by paying the purchase price plus interest, penalties, and costs; they can do nothing and the tax purchaser’s interest will ripen into ownership, or they can attempt to set aside the completed sale.

Home Foreclosures: 16.2.3.1 Overview

Most jurisdictions follow these sequential steps to foreclose on properties delinquent on taxes: (1) imposition of lien and notification of pending tax sale; (2) sale of a tax lien certificate or tax deed, or conditional transfer to the government entity; (3) period for homeowner to redeem; (4) foreclosure of the right of redemption; and (5) final transfer of the property.

Home Foreclosures: 2.2.5.2 The Distinction Between a Holder and the “Owner” of the Note

The “right to enforce” a negotiable note under U.C.C. § 3-301 is distinct from the “ownership” of a note. The owner of the note and the holder of the note can be different entities. The note’s owner, sometimes referred to as the note’s “beneficiary,” is the party ultimately entitled to receive the proceeds of payment on the note. When the holder and owner are different entities, there is typically a contractual relationship between the two parties. The contract gives the note holder the authority to enforce the note.

Home Foreclosures: Missouri

Mo. Rev. Stat. §§ 443.290 to 443.454

Most Common Method of Foreclosure: Power of sale.

Preforeclosure Notice:

Number of Notices: One.

Amount of Notice Required: Twenty days. §§ 443.310, 443.325. Last publication not more than one week before sale. § 443.320.

Home Foreclosures: 8.8.3.5.1. Individual arbitration

Where an enforceable arbitration agreement forecloses class arbitration, class action litigation in court, and individual court litigation, adequate client representation may require raising the consumer’s claims in an individual arbitration proceeding. While this is not preferred, under some circumstances consumers may achieve good results, particularly if the selected arbitrator has an open mind on consumer claims.

Home Foreclosures: 8.8.3.5.2 Class-wide arbitration

Where an arbitration clause prohibits class-wide arbitration, an arbitrator is unlikely to allow such relief, and a court would almost certainly overturn a class-wide arbitration award. Most, but not all arbitration clauses prohibit class-wide relief—some are silent on the issue.

Home Foreclosures: 15.3.3.3.3 Mortgagee optional election for non-borrowing spouses with HECMs predating August 4, 2014

After several years of continued advocacy by consumers and servicers concerning the significant problems and denials due to MOE deadline issues, HUD substantially revised its policy with the issuance of Mortgagee Letter 2019-15 on September 23, 2019. Like the prior versions of the MOE, Mortgagee Letter 2019-15 gives lenders the option to assign the loan to HUD and allows an eligible non-borrowing spouse to remain in the home.

Home Foreclosures: 5.5.2.7.2 Impact of E-Sign and UETA when state or federal statutes require written notices to borrowers

State statutes mandating foreclosure-related notices to borrowers are typically clear in defining the content of a required written notice and how it must be served. For example, a New York statute requires a ninety-day notice to the borrower before a lender can commence a judicial foreclosure.279 The notice must contain a prescribed text explaining how the New York foreclosure process works and describe steps the homeowner can take to avoid foreclosure.

Home Foreclosures: 10.8.2.1a. The Significance of When the Lease Commenced

The two key predictors under state law as to whether a tenant has rights to remain in the foreclosed property are whether the lease was executed before or after the mortgage and whether a foreclosure is judicial or non-judicial.621 If a lease was consummated prior to creation of the mortgage, the lease generally is treated as not extinguished by the foreclosure, in both judicial and non-judicial foreclosure states.622 This is so because the foreclosure purchaser acquires no greater interest than

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Veteran's Letter to VA Concerning Mortgage Foreclosure

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Sample Foreclosure Prevention Intake Form

This six-page intake form obtains client information concerning a threatened foreclosure:  basic information about the homeowner, the home, the mortgage, other mortgages and liens, an income budget, an expense budget, information on other debts and assets, and a comparison of income to expenses.

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Default and Delinquency Counseling Checklist

This checklist assists in foreclosure prevention counseling, setting out the various steps the counselor should follow.