Foreclosure is a proceeding in which a lender seeks to regain property from a borrower who has defaulted on payments. All foreclosures in the state of Florida are Judicial foreclosures. They are controlled by the courts and governed by a set of guidelines. Lenders must submit to a process that defines specific actions and timelines.
Your lender may choose to begin foreclosure proceedings if you fall behind on your loan payments. Here is what to expect.
- You’ll initially be sent a Notice of Default. This letter typically asks you to bring your loan to a “current” status by a specific date. Your lender may choose to take legal action if you fail to respond or act on the request.
- Your lender’s attorney(s) will file a Lis Pendens/Complaint with the court. This announces that legal action is in motion and that you’re officially being sued by your lender.
- You will be notified of this action by way of a Summons/Service of Complaint. This letter is personally served to someone in your household who is at least 15 years of age. The summons may be published in a local newspaper in some cases. You’ll have 20 days to respond to the complaint by filing an Answer to the Complaint, and, if available, affirmative defences. This filing gives you a chance to state your case before a judge. If you choose not to respond, the lender may receive a default judgment.
- A Motion for Summary Judgment/Trial will be filed on behalf of your lender once you respond. This indicates to the court that a trial is not necessary because you have not disputed any issues of fact. A judgment will be entered if the judge agrees. However, if the judge believes that facts have been disputed, he or she will set a trial date.
- A date and time for the Sale of Property will be set when a judge enters a final judgment of foreclosure. Proceeds will go to the lender if the property is sold. If there are no bids on the property, the title will be conveyed back to the lender. The lender or third party purchaser will then be able to sell the property on the open market. You will most likely face eviction in either of these cases.
- The lender may have the right to sue you for a Deficiency Judgment. This happens when the property is returned to the lender, but the amount remaining on the loan is not obtained through resale. The lender has the right to collect what you owe with this action. The lender can also collect the foreclosure costs by garnishing wages or bank accounts, or by placing a levy upon your assets.
You DO have options if you’re facing a foreclosure. First, you can negotiate with your mortgage company to reinstate the mortgage. Second, you can file a Chapter 13 Bankruptcy. These two options assume that you can afford your current monthly payment. They also assume that selling or refinancing your home may be impossible if you have little or even negative equity. Many homeowners—especially those with sub-prime mortgages—can no longer afford their mortgage payments, even if their mortgage is current. That makes a Chapter 13 bankruptcy impossible. A third option is to sell your home or attempt to refinance. Fourth, you can give up, and vacate the home.
You have a fifth option with Parker & DuFresne. You can fight the foreclosure. You are not required to make your normal monthly mortgage payments while you are litigating a foreclosure case. You may be able to modify your loan or force the lender to rewrite the terms of your mortgage altogether. This can make it possible for you to keep your home. It may sound too good to be true. But you may have valuable defenses and counterclaims against your mortgage company. These could actually prevent foreclosure and even require your lender to pay you damages.