Recently, JP Morgan Chase, the third largest home loan servicer in the United States, announced that it has frozen all of its pending foreclosure cases, so that it may review the accuracy of documents filed with the courts. In response to this news, many association board members and property managers have contacted our office questioning the impact on their associations’ pending foreclosure cases. To be clear, this freeze will not affect association foreclosures, provided the board followed Kaman & Cusimano’s recommendation to either file a foreclosure complaint or an answer and cross-claim.
Kaman & Cusimano has strongly encouraged its service option client community associations to be aggressive in pursuing delinquencies. To do so, the firm has always recommended that an association either 1) file a complaint to initiate foreclosure proceedings when a balance become high, or 2) join the bank’s foreclosure by filing and answer and a cross-claim.
Filing a complaint or an answer/cross-claim enables the association to push the foreclosure, continue the court proceedings, and order a sheriff’s sale regardless of the status of the bank’s claim. Additionally, filing these documents enables associations to participate in mediation, to be active in loan modification negotiations, and to receive any excess proceeds from the sheriff’s sale.
Again, if your association has aggressively pursued its delinquent accounts and followed Kaman & Cusimano’s recommendations, the Chase foreclosure freeze will not affect your association’s ability to obtain judgment on its claim, and ultimately order a sheriff’s sale.