If you’re facing a foreclosure in Delaware, you should learn about the process and your rights so you aren’t taken by surprise. Read on to learn how each step in a Delaware foreclosure works—from missing your first payment up until you have to leave the home—and get useful information about both federal laws and state laws that are designed to protect you.
Federal and state laws—in theory—establish a structured, predictable foreclosure process and timeline. But lenders sometimes make mistakes and violate the law when processing foreclosures. So, it’s strongly recommended that homeowners facing a foreclosure understand the specifics of both federal and state laws and procedures. If the lender messes up, you might have a defense to the foreclosure.
Federal laws give protections to homeowners both before and during the foreclosure process. For example, a foreclosure generally can’t start until the borrower is more than 120 days late on payments. (To learn more, see How Soon Can Foreclosure Begin?)
Foreclosures in Delaware are judicial, which means a court handles the process. In some other states, foreclosures are nonjudicial, which means they’re usually carried out with little, if any, court involvement or oversight.
Here’s what homeowners can expect if they default on their mortgage in Delaware.
Most homeowners get at least two preforeclosure notices: a notice about the default and a notice of intent to foreclose.
Notice about the default. Delaware law doesn’t require lenders to send homeowners a notice of default before starting a foreclosure. But most mortgages contain language requiring the lender to send the borrower a letter (often called a “breach letter”) before starting the foreclosure. Also, federal law requires lenders to attempt to notify homeowners both over the phone and in writing soon after default to remind them of the missed payment and to discuss options that might resolve the problem.
Notice of intent to foreclose. Delaware law does require lenders to send homeowners a notice of intent to foreclose by certified and first-class mail at least 45 days before starting the foreclosure.
In Delaware, a lender must file a lawsuit to foreclose a home.
At least 45 days after the lender sends the notice of intent to foreclose and 120 days after the actual default (in accordance with federal foreclosure laws), the lender begins the lawsuit by filing the initial pleading, called a “Complaint,” with the court.
Along with the Complaint, the lender must file supporting documentation, including a notice of foreclosure mediation if the property is an owner-occupied, one- to four-family primary residential property. Mediation gives the homeowner an opportunity to negotiate with the lender to find a workable solution to avoiding foreclosure. (To learn more about foreclosure mediation, see How to Potentially Stop a Foreclosure With Mediation.)
After the lender files the Complaint and supporting documents, including the mediation notice, the documents are served to the homeowner. A separate notice is also posted on the front door of the home. In Delaware, the paperwork served to a homeowner facing foreclosure is frequently called a “Writ of Scire Facias”—a Latin term for the judicial foreclosure process.
The homeowner gets 20 days to file a response, called an “Answer.” Homeowners who want to save their home are strongly advised to consult with an attorney about the judicial foreclosure process as soon as possible after service, if not before. Failing to file a timely Answer or filing an Answer that doesn’t meet specific, technical legal requirements could result in a default judgment (an automatic win) for the lender.
Delaware law does allow the homeowner to file an Answer later than 20 days from service, but only if the homeowner has elected to mediate. (The Answer must be filed on or before the scheduled mediation date.) However, unless advised differently by an attorney, homeowners should normally file their Answer within 20 days of service.
Once the Complaint and Answer have been filed, the court will issue a Case Scheduling Order, which notifies the parties of specific dates and deadlines, including court appearances, throughout the judicial foreclosure process.
If the court determines that the foreclosure is proper, it will enter a judgment against the homeowner. Solutions for avoiding foreclosure can be possible even after judgment so homeowners shouldn’t stop negotiating for a workout option just because a judgment is entered.
After judgment, a public auction of the home is scheduled. The auction will be conducted by the sheriff, usually at the courthouse in the county where the property is located. Notice of the sale must be:
The court must confirm the sale. Upon confirmation, the proceeds of the sale are applied to the homeowner’s debt. If the proceeds exceed the total amount owed, the homeowner is entitled to the excess (assuming there aren't other liens on the property). But if the proceeds fail to completely satisfy the amount owed, the lender may seek a deficiency judgment against the homeowner.
Up until confirmation, the homeowner may continue living in the home. After the court confirms the sale, though, the new owner, usually the lender, can get an order of possession from the court and evict the foreclosed homeowners from the home.
If you’re facing a foreclosure in Delaware, having a general understanding of the laws and process can provide you some level of comfort. If you want to read Delaware’s foreclosure laws for yourself, go to Title 10, Chapter 49, Subchapter XI of the Delaware Code, which provides many of the procedural requirements for foreclosures (again, called "Scire Facias").
If you need help understanding the law, want to file an Answer to the suit, or have questions about your particular circumstances, consider contacting a local foreclosure attorney. Homeowners facing foreclosure are also encouraged to contact a HUD-approved housing counselor.