Banks are not the only ones who need to be aware of Delaware’s foreclosure laws.
Residents of homes also will need to be familiar with them if they fall behind in their house payments, as they may have a viable defense to a looming foreclosure.
Likewise, not every lender is a large, sophisticated bank. Local banks may need some guidance through the foreclosure process, as will other lenders and businesses that rely on mortgages to secure their financial interests.
On the other side of the coin, small businesses or owners of investment real estate may also run into financial distress or may face a dispute about a mortgage.
Sometimes, individuals may even provide a loan that is secured by a mortgage. They, too, will need to understand how to protect their investment.
In Delaware, foreclosures require the involvement of the courts
Relative to those in other states, Delaware courts are heavily involved in real estate foreclosures.
Depending on the language of the contract, a lender may have to send notice to the borrower that the borrower is behind in payments even before a court gets involved.
The lender may at this time wish to accelerate the loan, meaning that the lender can demand payment in full before stopping the foreclosure process rather than being required to accept only catch-up payments.
Once the lender has filed suit in a Delaware court, there will be several additional steps involved. The borrower will have an opportunity to raise defenses to the foreclosure.
The borrower may also wish to try to delay the sale of the property after a court has granted the foreclosure and allowed the lender to schedule a sale at auction.
In some cases, it may make sense to offer to redeem the real estate from foreclosure by paying off the loan. This has to be done before the property actually gets sold.
The foreclosure of real estate is a complicated process that involves a number of steps. It is important that the parties involved are fully informed about the process and know their legal options.