Florida Foreclosure Process
If you are falling behind on mortgage payments and you feel that you may find yourself dealing with a foreclosure, you need to educate yourself on the foreclosure process and the potential consequences. This article summarizes the process in understandable steps and the timelines associated with each. Please keep in mind, not all lenders have the same processes and methods.
Step 1. Missed Payment
The foreclosure process begins with a missed payment. When the borrower misses the payment, they should expect a late fee and a notice shortly thereafter. The information about a late fee should be noted on the promissory note. Generally, these fees usually end up being between 4-6% of the total amount of the missed payment.
Step 2. Try to Fix The Problem Before 120 Days Goes By
The borrower has 120 days from the day they were delinquent before the lender can file a foreclosure lawsuit against them. In that time period the lenders options are very limited, there is just not much they can do. The lender usually reaches out to the borrower if they get behind by two payments. When the lender does reach out, they usually will be open to exploring loan modifications and payment plans to help get the borrower back on track, but not always.
Step 3. Issue Notice of Default
This is when the foreclosure process is set in motion. This notice tells the borrower that the lender has filed a civil complaint against them. From here, it takes between 10 and 20 days for the borrower to get served.
Step 4. Lis Pendens
The lender will file a Summons and Complaint with what a document called a ‘lis pendens.’ In plain english, a lis pendens is a document given to the borrower that says they not made their payments by the agreed dates and that the borrower is coming after the property. Once the borrower is served these documents, they have 20 days to respond.
Step 5. Borrowers Response
The response to the complaint is a critically important part of the foreclosure case. This will be the borrowers main shot at defending their point of view and why they are having problems making sufficient payments. Here at FL Home Buyers, we recommend consulting with an attorney due to the fact that what you say here will have a major effect on the outcome of this foreclosure process.
If the borrower provides an answer and the judge feels that the borrower has a fair case, a summary judgement will not be granted and the foreclosure trial will start.
Step 6. Summary Judgement
If there is no response from the borrower or the judge rules in favor of the lender, it will move forward to what is known as summary judgement. The summary judgement hearing will be scheduled between 30 to 60 days after the answer period is over. Usually the judge will total up all amount of money owed to the lender and put the lender in a Final Summary Judgement.
Step 7. The Sale of the Property
If the summary judgement is ruled in favor of the lender, the property will be scheduled with the local county clerk to be sold at the county auction within the next 30-45 days.
One law, specifically in Florida, favors the lender and can be detrimental to the borrower. If the lender is not made whole by the auction proceeds, the lender can pursue a deficiency judgement against the borrower. This judgement would allow the lender to pursue recovering their loss from the borrower personally, outside of the realms of the subject property.
Saving the Property
There is no question about it, it is best for every party involved to avoid a foreclosure. The bank does not want to deal with the time and cost and the lender does not want to be kicked out of their home and have their credit trashed. Here at FL Home Buyers, we work with homeowners and their lenders to come up with solutions to put a stop to these issues and provide a win-win solution for both parties.
No one wants to deal with a foreclosure. The process is lengthy and complicated and there is no room for error by either party. Worst of all, it really messes up your chances to buy another home in the near future without paying a huge premium. Your credit score will take a massive hit and you may have to wait two years before buying another home. Check out our article here: “How does foreclosure affect me?” Give FL Home Buyers a call today and let us show you how we can solve your problems!