A basic glossary concerning foreclosures
1. Formal notice – It’s a written request from the creditor (mortgagee) to the debtor (mortgagor) asking to fulfil an obligation. This request is commonly forwarded by mail or registered mail with acknowledgement of receipt so that the date of reception can always be proved.
2. Mortgage termination letter – It informs you that they give up on your loan and you become a “bad payer” – When you miss a loan payment, and more precisely, if your payment is more than 180 days late, the bank has the right to invoke it as the cause of termination of contract for breach of an essential term within the meaning of Article 1453 et seq. of the Italian civil code. The bank will also be able to invoke the judicial termination of the loan contract if you miss the loan payment more than 7 times, if your payment is more than 180 days late and, obviously, if you miss even just one of the agreed instalments. In all these cases the Article 1819 of the Italian civil code remains fully applicable: they can ask you the payment of the entire amount of the debt if you miss even just one of the agreed loan instalments, without resolution of contract.
3. Injunction – It’s a Court order to the debtor (mortgagor) to fulfil his obligation (ex. payment of an amount of money) and resolve the default within a certain period of time (normally 40 days). After this deadline the injunction becomes enforceable and foreclosure will initiate on the debtor’s property. The injunction can also be declared immediately enforceable and the mortgagor does not have the 40-days-time to pay back his debt or to object to it. This claim can be accepted if the credit is based on a bill of exchange, a regular bank cheque, a bank draft, a certificate of stock-market liquidation or on an order received by a notary or other authorized public official.
4. Order to pay – it is provided for in and regulated by the Article 480 of the cpc and it’s duly served with written notification. It is a notice that warns you to meet an obligation resulting from an enforcement order (for example a loan agreement and/or an injunction – decreto ingiuntivo). This order is the preliminary stage to the enforcement proceedings. In accordance with article 481 of the c.p.c, the order to pay loses its validity if, after 90 days from the date of its notification, the attachment order has not been served.
5. Attachment order or foreclosure notice – The enforcement proceedings start with this order in which it is clearly stated what the creditor (mortgagee) wants to obtain from the attachment. After lodgment of the original attachment order before the Court, the competent Court Registry Office will assign the relevant procedure number. This number will enable stakeholders to monitor auctions to carry out all the necessary checks on the institutional web sites of judicial court auctions.
6. Legal Appraiser – It’s a professional technical consultant (usually a building engineer or an architect) appointed by the judge whose task is to inspect the property and evaluate it. The estimated value will be the starting price (opening bid) at the first auction that will be arranged.
7. Judicial Auction Institution – It’s made up of private persons authorized by the judge. They deal with the sale, the custody and administration of the foreclosed movable and immovable assets (http://www.ivgbrescia.com/)
8. Notary Association for Enforcement Proceedings – It’s a staff of professionals and Notaries, appointed by the judge to carry out the transactions concerning the sale process and the following transfer of property (http://www.anpebrescia.it/)
9. Judicial auctions – Judicial auctions are a means to carry out forced sales of foreclosed assets. The law provides that if a private citizen or a society have outstanding debts, their properties – movable or immovable assets – can be subject to forced sale. Regulations establish the obligation to publish the notice of sale, the Court order and the estimate report (appraisal) on the dedicated websites at least forty-five days before the final date for submission of tenders or forty-five days before the date of the auction.
10. Adjudication of property at auction – The winning bidder is the person who has properly applied for admission to bid in the auction and, on the day the auction is set, competing with other possible applicants, has been awarded of the property at auction offering the highest bid.
11. Injunction to move – It is an order from the enforcement Judge. It transfers the foreclosed property to the winning bidder. This document also contains the order to the debtor (mortgagor) and to the custodian to deliver the immovable property which has been sold; it constitutes a valid document allowing for the transcription of the sale and an enforceable order for the delivery.