What is Lis Pendens and its relation with foreclosure?

Lis pendens is a pending lawsuit against a home owner who has defaulted in mortgage payments. This affects the title of property but the possession of property remains with the home owner who can sell it or refinance it to avoid foreclosure. The property remains in pre foreclosure till it comes into auction and is finally foreclosed.

Lis pendens is a Latin Phrase which translates to “suit pending” is an actual notice filed at the local county office stating that the lawsuit is being filed against a concerned property. This notice is regarding the title of property or claiming ownership of the said property by the lender. This will show up with county recorder affecting the title of property.

As lis pendens is a pending law suit, the homeowner still has the possession of the property and they can go for selling or refinancing it. It is filed in the state where judicial procedure is followed; in other states with non-judicial procedure a notice of default is used.

After the lis pendens is filed, pre-foreclosure process is deemed to have started and the property usually takes from 90 days up to one year to be sold finally in an auction depending on the state in which the property lies if it is not already sold by the home owner during this period.

The filing of lawsuit is an opportunity for a home buyer and such properties go on for listings in the pre foreclosure sections of online listings. More than 1 million such properties are available on such lists. The comprehensive pre foreclosure or foreclosure listing websites are always on the lookout for such properties and they add these properties the moment a lis pendens is filed.

Lis pendens is an alert to the buyer that a particular property is available as a pre-foreclosure property as its title or ownership is in question. Smart Investors are always tracking such properties to buy them directly from the home owner as pre foreclosure properties before they come in the market or at auction.

The great advantage of a lis pendens is the cost benefit it offers. Properties with such a notice are available at up to 50% of the market value as these are generally distressed properties plus the title has already been affected and home owner needs to pay as soon as possible to the lender to avoid adding up interest day by day.

So a property is a pre foreclosure property from the day a lis pendens is filed till it is finally sold at auction and is finally a foreclosed home.

Article Tags: Home Owner, Such Properties

Source: Free Articles from ArticlesFactory.com

ABOUT THE AUTHOR