Foreclosure Buyers Beware!  How Parrish v. Federal National Mortgage Association changes the game for some evictions.

September 20th, 2016 by JBWK

Submitted by Attorney Patrick Tench

The Supreme Court of Virginia’s recent decision in Parrish v. Fed. Nat’l Mortgage Ass’n, 787 S.E.2d 116, 120 (Va. 2016) has placed a potential roadblock in the way of foreclosure buyers.  Until now, if you purchased a home at a foreclosure auction and the person living there claimed to be the rightful owner and refused to leave, you could file a “summons for unlawful detainer” in your local general district court.  General district courts are courts of limited jurisdiction.  For example, they have the power to decide who has the right to possess real estate, but do not have the power to decide who owns it.   Litigation in general district court is relatively inexpensive, and most unlawful detainer cases can be handled in 30 to 90 days, from start to finish.   By contrast, litigation in circuit court (which is a court of general jurisdiction that has the power to determine property ownership, issue injunctions, etc.) can be very expensive and can take more than a year to resolve.

In Parrish, Fannie Mae received the deed to a foreclosed property in Hanover County.  The former owners of the property, the Parrishes, asserted that the foreclosure was defective and refused to leave.  Therefore, Fannie Mae filed a Summons for Unlawful Detainer in Hanover County General District Court and got a court order for possession of the property.  On appeal, the Supreme Court decided that when a “legitimate” question is raised about the validity of a foreclosure, a general district court no longer has jurisdiction over the case because it does not have the power to decide questions of ownership.  Therefore, the case must be dismissed without prejudice.   In other words, the new owner must start the process over and file a circuit court case in order to get possession of their property.

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