What Is Summary Judgment in a Foreclosure?

In a judicial foreclosure, "summary judgment" is a judgment in favor of the lender after a borrower formally responds to a foreclosure lawsuit, but doesn't raise any valid issues or defenses. After the lender files a motion for summary judgment and a court grants it, the lender can proceed with a foreclosure sale.

You'll potentially face a summary judgment if you're in a judicial foreclosure, but not in a nonjudicial one.

How the Summary Judgment Process Works in a Foreclosure

The summary judgment process is a legal procedure used in judicial foreclosures. The lender (the plaintiff) files a summary judgment motion, asking the court to rule in its favor and order a foreclosure sale without holding a full trial. This typically happens after the borrower (the defendant) files an answer to the foreclosure lawsuit but the answer doesn't raise any valid legal defenses or factual disputes.

In a motion for summary judgment the lender:

• presents the facts, such as the borrower executed the note and mortgage, the plaintiff's status as owner and holder (or representative), the date of the borrower's default, when notice of default and acceleration was given, and the amount due
• explains the law and discusses the statutes and cases governing the case, and
• anticipates the borrower's arguments, such as any defenses they might raise. The lender will attempt to prove they should still win the case even if the defendant is correct in their arguments.

If the borrower fails to show a legitimate dispute or meritorious defense, and the lender meets its burden, the judge can grant summary judgment, giving the lender the right to move forward with selling the property at a foreclosure sale without further litigation.

Purpose of Summary Judgment in a Foreclosure

Because summary judgment happens before a trial, it promptly resolves foreclosures where the parties have no genuine issues or any material facts in dispute. In this way, the summary judgment process expedites foreclosures by resolving cases quickly, avoiding the time and costs associated with a full court trial.

Judicial vs. Nonjudicial Foreclosure: How Summary Judgment Applies

Summary judgment comes up in judicial foreclosures, but not in nonjudicial ones.

Summary Judgment and Judicial Foreclosures

To begin a judicial foreclosure, the lender files a complaint, petition, or similar document with the court. It then serves a copy of the complaint to you, along with a "summons." The summons will tell you about your rights and say how many days you get to file a formal response in writing, called an "answer," with the court, usually 20 or 30 days.

If you decide to file a response to the foreclosure, the answer must contain legally acceptable responses to the allegations against you in the complaint. An answer is your chance to respond to the complaint's claims and formally raise any defenses or counterclaims you have against the lender or the loan servicer. If you file an answer to the suit, the lender won't be able to get a default judgment from the court. Instead, the lender might file a motion for summary judgment, especially if your answer didn't raise any real issues.

In a summary judgment motion, the lender asks the court to grant a judgment of foreclosure without holding a trial because the borrower's answer wasn't sufficient. For example, the case's main facts aren't in dispute, any defenses raised lack merit, or the borrower didn't show that the lender or servicer violated the law. If the court grants summary judgment in favor of the lender, typically after a hearing, the lender wins the case, and the home will be sold at a foreclosure sale.

But if the court denies the lender's motion for summary judgment, litigation (including discovery and trial) will go ahead. At the end of the trial, the judge will likely either:

• order the foreclosure sale, or
• dismiss the case, usually without prejudice. ("Without prejudice" means the lender can refile the foreclosure.)

Summary Judgment and Nonjudicial Foreclosures

With a nonjudicial foreclosure, subject to a few exceptions, the foreclosure usually happens totally outside of the court system. You won't get a chance to answer a foreclosure complaint, and summary judgment won't be part of the process. Once the lender finishes the steps required under state law to foreclose (like mailing you a foreclosure notice, publishing a notice of sale in a newspaper, and posting sale information at your home), it will hold a foreclosure sale.

If you want to fight a nonjudicial foreclosure in court, you'll have to file your own lawsuit. Be aware that nonjudicial foreclosures usually move quickly. So, if you get a notice about a nonjudicial foreclosure and want to challenge it, talk to an attorney about filing a suit as soon as possible.

Can a Homeowner Challenge Summary Judgment in Foreclosure?

Yes, a homeowner can challenge summary judgment in a judicial foreclosure. After the lender files a motion for summary judgment, the homeowner has the right to respond and oppose the motion. To successfully fight a summary judgment motion, the homeowner must present evidence that there is a genuine dispute about a material fact or raise valid legal defenses, such as lack of standing, inaccurate lender documentation, or a failure by the lender to follow state or federal foreclosure laws, for example.

If the court determines that the homeowner's evidence raises a real issue worth considering, the judge may deny the lender's summary judgment motion and set the matter for trial. If summary judgment is granted, the homeowner could, depending on the circumstances, potentially file a motion for rehearing, move to reconsider the ruling, or possibly appeal the decision.

In the end, whether you'll be able to successfully challenge a motion for summary judgment depends on the strength and legitimacy of your arguments and defenses.

Common Defenses Against Summary Judgment in a Foreclosure

Some common defenses that you might be able to raise to fight a motion for summary judgment include improper notice, lender misconduct, and ongoing loss mitigation discussions (say you're in talks with the lender about getting a loan modification).

How to Respond to a Summary Judgment Motion in a Foreclosure

Generally, you should follow these steps if you want to respond to a summary judgment motion:

• Review the motion and any supporting documentation. Look for any statements or arguments you think are inaccurate and to determine the response deadline. If you find problems in the lender's motion and supporting documents, you might be able to create doubt about their case, making a court less likely to grant summary judgment.
• Gather your evidence and identify any defenses. Review your records and look for errors or disputes with the lender's facts, such as an incorrect payment history, lack of proper notice, or lack of standing to foreclose. You must show there is a genuine dispute over a material fact or issue. Just saying you disagree with the lender won't be sufficient to win against a summary judgment motion.
• Prepare a written response in the proper format. Include supporting documents and sworn affidavits as needed.
• File your response with the court by the deadline. Be sure to follow the local rules for filing the document.
• Serve a copy to the lender's attorney, as court rules require, and keep proof of service.
• Attend the summary judgment hearing if the court schedules one. Be ready to argue your case and answer questions.
• If the motion is granted, consider additional options. You might be able to ask the court to reconsider or appeal the decision, for example. Be sure to meet any applicable deadlines.

If you miss a deadline, don't make a proper legal argument, or fail to include appropriate evidence, the court might grant the summary judgment motion. Responding to a summary judgment motion is complicated. Most people fare better after getting help from a lawyer.

Talk to a Foreclosure Lawyer

If you want to file an answer to a foreclosure lawsuit or a response to a summary judgment motion, consider hiring a foreclosure lawyer. A lawyer can tell you about available defenses in your situation, prepare a response to file in court on your behalf, argue your case in court, and represent you throughout the entire foreclosure process.

If you need information about loss mitigation options, it's also a good idea to talk to a HUD-approved housing counselor.