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FORECLOSURE - A REAL TALE

alt="post box real tale about foreclosure" It is important to appoint a lawyer as soon as you receive a Court notification

In relation to the post “How to face a Foreclosing Proceeding” we bring to attention a real (and sad) case. A British couple signed a Mortgage Loan to buy their family home. The amount of the monthly instalments were euro 3,000 that had been paid during the years previous to the crisis. From 2011 problems came and there were late payments. The bank foreclosed (year 2011). One day, the husband received a notification (in the address stated in the Mortgage Deed which was the mortgaged property). It was the foreclosing claim. In the bank they were told that they should not be worried, as everything would be sorted. They did not plea. The Court considered the couple notified and continue with the process. In July 2012 the husband received another notification (this time collected), which informed that there would be an auction in October 2012. They went to the bank branch and find a supposed agreement: if, from that date on they paid euro 1,600 monthly, the auction would be paralysed and the foreclose process filed. At least, it was what they understood. Needless to say, that they did not sign any document. All remained in the office.

Thus, the auction was suspended at the bank´s request. But execution was not filed and was kept stand by during two years. In spite of depositing every month euro 1,600, the bank decided to “rekindle” the execution in 2014. Logically, the euro 1,600 monthly deposits were not sufficient to cover the euro 3,000 monthly instalments.  The couple was always in debt. So in September 2014 they received another notification in which they were informed that there would be an auction in October 2014 (two years after the first auction) by virtue of the Writ of Execution of 2011 (the same resolution in which the auction of October 2012 was based). At this stage they decided to appoint a lawyer (although late).

At this time, it may come up to our mind the saying “Ignorance of the Law excuses no man” (ignorantia juris non excusat). This Spanish principle of law is also referred in British law, for instance, the English jurist John Selden (1584-1654) wrote: "Ignorance of the Law excuses no man; not that all men know the law, but because it's an excuse every man will plead, and no man can tell how to refute him”. The protagonist couple of this story should have known that what they agreed in the bank´s branch has no legal relevance if not captured in public document. There is no doubt about their good faith, they were convinced that the foreclosing proceeding would not continue, which was corroborated by the fact that they did not have news from the bank during two years. But things were not as they thought.

Despite of all legal efforts (plea to Court asking for nullification, opposition to the enforcement –late, as the deadline had expired in 2011-, appeals, etc.) there was no way to stop the auction. In the bank office, as expected, nobody remembered anything about the 2012 supposed deal. The bank adjudicated the property (October 2014). Clearly, as there was no possibility of opposing, all was favourable to the bank. However, until now (October 2014) due to various legal resources, the bank could not take possession of the family home.

But more, like the sum by which the bank adjudicated the property did not cover the full amount of the debt, the bank decided to sue them for the outstanding balance. Now, at the time of liquidating the debt the bank did not take into account the euro 1,600 monthly payments. Logically, the liquidation was higher than the real debt (specially due to the interests). The only thing that could be made (on top of delaying the eviction) was to claim to Court to reduce the debt, as it finally did.

What is the moral of this tale?. In another post we refer to the importance of acting in time after receiving a foreclosing Court notification, specially in cases of family home involved. In this one, we add that it could be possible that, whether for whatever reason, the notification may not come to its addressee and, therefore, the judge orders notification by edicts, continuing with the proceeding by default. In some cases, the lack of notification reverts to the nullification of the process but in some others not. That is why the mortgagee that knows that is in breach with the mortgage instalments must know that sooner or later the bank will foreclose and it is convenient to attend to Court in order to plea, at least to win time. Never give up.

Spanish

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