By Giving Consent to a Judgment of Foreclosure and Sale, the Defendant Owner of the Property is Essentially Allowing to Have the Foreclosure Action Go Forth in an Accelerated and Unopposed Manner From the Beginning to the End
A Judgment of Foreclosure and Sale is the last step in a foreclosure litigation Proceeding before a foreclosure auction is scheduled; giving the debtor a “Consent Judgment of Foreclosure” agreement is a way to move the foreclosure along in a situation where the property owner is not looking for additional time at the property. A foreclosure proceeding otherwise can be more protracted if the property owner is actively defending the foreclosure litigation. However, consenting to the Judgment of Foreclosure essentially bypasses most of the potential litigation and allows the lender to schedule a foreclosure sale relatively quickly.
A Consent to a Judgment of Foreclosure is a viable remedy where a Deed in Lieu is not possible because of secondary liens by third parties against the property. Rather than giving the lender the deed, the property owner gives the lender a quick foreclosure judgment so that they could expedite the foreclosure proceeding against all the liens on the property. Otherwise a Consent to Judgment agreement, like a Deed in Lieu agreement, seeks to transfer rights to the the lender. The Consent to Judgment is just not as close to the finish line, giving the lender the obligation to actually conduct a foreclosure auction to finalize the transfer of ownership. As with the Deed in Lieu agreement, a lender may in exchange agree to not to pursue the borrower for a deficiency.
The advantage of a Consent to Judgment Agreement is that it allows the expediting of a foreclosure, similar in that respect to other non-retention options, but uniquely not having the problem of secondary mortgages and other liens like judgment or tax liens, which can get in the way of short sales, deed in lieu agreements and modifications. In return for such an agreement an owner could bargain over there being no deficiency for any amounts due on the first mortgage after a sale and not have to worry about how to make arrangements with potentially large amounts or high level liens against the property.
The disadvantage of a Judgment of Foreclosure is that if the owner’s goal is to move on and not to defend, the Judgment does not transfer possession or ownership so it is a relatively mild remedy compared to other Non-Retention Options, like a Short Sale or a Deed in Lieu. While a consent to judgment allows the foreclosure action to move faster, what really would make it move faster is if property owner seeks to move on. Because the owner is only giving the lender an improvement in position it is not decisive enough for the owner to expect major concessions.
There are not many limits to a Consent to a Judgment of Foreclosure Agreement because the typical limits on other Foreclosure remedies like secondary mortgage and/or judgment liens, which can limit or hinder Short Sales, Modifications or Deed in Lieu Agreement Options,, do not hinder a Consent to Judgment Agreement since the Lender is still free to foreclose on these secondary liens as it is proceeding with its foreclosure. Another potential limit on other options, which is the potential risk that the Owner would be found liable for debt forgiveness tax is not a limit because there is no debt being forgiven with a Consent to a Judgment of Foreclosure and Sale. Another potential limit is approval by the Lender to a remedy like a Modification or a Short Sale. While a Lender needs to approve of a Judgment of Foreclosure, it is less likely to deny approval for a Judgment of foreclosure which is what the Lender is seeking anyway.
The procedure for a Judgment of Foreclosure and Sale is generally the owner drafting the proposed order which is presented to the Court for signature. Once the owner is in favor of moving forward with the Judgment, the steps need to be implemented in terms of drafting and signing the deed.
Our office defends foreclosures and even though the Judgment is an advanced stage in the foreclosure, there are other ways if the owner regrets the decision to give the consent to the Judgment, to continue to delay and/or remedy the foreclosure with bankruptcy, negotiation and litigation options. Because of our broad range of tools dealing with foreclosure, we can better advise you and analyze your situation and take steps to further your interests as the facts of a situation unfold and move forward.