Anyone who receives a real estate foreclosure deed almost always thinks the same thing: that it is now over and the house is lost. In most cases this is not the case, but the margin for maneuver is reduced week after week. The moment in which you intervene matters more than the path you choose.

This article explains, in a concrete way, what happens after the foreclosure notification and what are the possibilities that really remain open. It is not legal advice: it helps us understand the situation and ask ourselves the right questions before the procedural deadlines close by themselves.

What happens after the notification

Real estate foreclosure does not transfer ownership. The property remains in the debtor's name, which in most cases continues to inhabit it, but he is bound: the deed is transcribed in the real estate registers and from that moment the property can no longer be sold freely.

The creditor must file the application for sale within ninety days of registration, otherwise the foreclosure becomes ineffective. From there the execution judge appoints a custodian and an expert, who draws up the appraisal report. That report is the most important document of the entire procedure: sets the value from which all subsequent auctions will start.

Then comes the hearing foreseen by the article 569 of the Code of Civil Procedure, the one in which the judge decides how to proceed with the sale. It is the threshold beyond which various options close. Six to twelve months generally pass between the notification of the foreclosure and that hearing, sometimes more. It is in that window that almost everything is played.

The roads that remain open

1. The conversion of foreclosure

It is the tool foreseen by the article 495 of the code of civil procedure and allows the seized property to be replaced with a sum of money. In practice: the debt is paid and the foreclosure ceases.

The points that count:

• The application must be submitted before the judge orders the sale. After that it is no longer possible.
• A deposit must be paid upon filing the application not less than one sixth of the amount of the credits for which proceedings are being taken, including those of the creditors involved, net of what has already been paid and documented.
• The judge may authorize payment of the remainder in installments, up to a maximum of 48 months, if there are justified reasons. Interest accrues on the installments.
• Failure to pay just one installment is enough, or a delay greater than 30 days, to lapse from conversion. In that case the sums already paid remain included in the procedure and the sale restarts.

Four years of deferral is a real advantage, but the initial deposit remains a real obstacle for many: on a debt of 150.000 euros we are talking about 25.000 euros to find immediately.

2. Direct sales

Introduced with the civil trial reform, it is governed by article 568-bis of the code of civil procedure and allows the debtor to sell the property himself, under the control of the judge, instead of undergoing the auction.

The conditions:

• The application must be filed no later than ten days before the hearing provided for by the article 569, and it can be presented only once.
• An offer to purchase at a price must be attached to the application not less than the value indicated in the appraisal.
• The bidder must pay a deposit not less than one tenth of the price offered.
• The request and offer must be notified to the proceeding creditor and to the other creditors at least five days earlier of the hearing.
• The offer is irrevocable: whoever presents it cannot back out.

The advantage is that it sells at the estimated value, not at the depressed price of an auction. The downside is that you need a real buyer, willing to move within a tight deadline and to pay the deposit immediately.

3. The agreement with the creditor

You won't find it in the code, but it is the most traveled path in practice: the closing of the position is negotiated with the bank or fund that took over the credit upon payment of a sum lower than due, balance and write-off.

It works because it's often convenient for them too. Many bad mortgage loans were sold to funds that bought them at a fraction of face value: Cashing in on a certain amount right away can be worth more than an uncertain auction that drags on for years. The weakness is that there is no right to get it. It depends on who the other party is, how much the property is worth and how large the guarantee is.

4. The opposition

Se l’atto presenta vizi — importi non dovuti, irregular notifications, difetti del titolo esecutivo — esistono gli strumenti dell’opposizione all’esecuzione e agli atti esecutivi, provided for by the articles 615 e 617 of the Code of Civil Procedure. The terms are short and the evaluation must be made by a lawyer on the file, not by hearsay. This is not a way to go to save time: an unfounded opposition costs money and does not move the auction date.

Because waiting for the auction is the worst case scenario

The most widespread and most harmful belief is that, if no one buys, the house remains with the owner. It doesn't work like that.

When an auction fails, the judge can set a new experiment at a reduced base price up to a quarter compared to the previous one. After the fourth failed attempt the decline can arrive up to half. The mechanism repeats until the property is sold.

There are two consequences, and both must be taken into account:

1. The property is sold for a fraction of its value. Three or four markdowns bring an appraised property 200.000 euro to be awarded for less than half.
2. The debt is not eliminated with the sale. If the proceeds do not cover the credit, the remainder remains due. You lose your home and are left in debt.

Every month of waiting reduces the recoverable value. This is exactly why a serious evaluation must be made at the beginning of the procedure, not when the third auction has already been set.

What does it take to understand where you are

Before choosing any path you need four elements. Anyone who promises a solution without seeing them is selling smoke:

• The notified writ of seizure, with the procedure roll number.
• The expert's opinion, if already deposited: it says how much the property is worth in the eyes of the court.
• The updated debt count, including interest and expenses, and the list of creditors involved.
• Mortgage and land registry surveys, to find out how many and what formalities affect the property.

With these four documents you can understand in a few hours whether the position is recoverable, with which instrument and in how much time. Without, you navigate by sight.

A warning

This article is for informational purposes and does not replace the advice of a lawyer. Executive procedures have peremptory deadlines: a day's delay definitively closes a road that was passable the day before. If you have received a writ of foreclosure, the first thing to do is have the cards read by a professional, non cercare risposte generiche online — comprese queste.

twenty S.r.l. has been operating in the Milanese real estate market for over ten years and deals with the evaluation of properties subject to enforcement procedures, analysis of mortgage and land registry surveys and consultancy on purchase and sale transactions. We are not a law firm: we work on the value of the property and the economic feasibility of the operation, alongside your lawyer.

If you find yourself in this situation and want a confidential evaluation of your position, write to us: we look at the cards and tell you frankly if and how you can intervene.