How The Foreclosure Process Works In Florida
Foreclosure is scary, no one wants to think about losing their home. Owners at risk of foreclosure need to deal with the stress of meeting timelines, court hearings, and possible eviction.
Foreclosure is the legal process that is followed, whereby a lender attempts to collect a debt from a debtor, specifically the balance owed on a mortgage. The loan balance recovery process may differ from state to state, but today we will focus on the foreclosure process in Florida.
Below are the steps in the foreclosure timeline in Florida.
Step 1: Noted defaults
Payment defaulting is the trigger for the foreclosure process. Once the debtor fails to make payments, a “Notice of Default” will be issued by the bank to let the debtor know that the note must be paid in full immediately. This note is usually delivered by mail and the objective of this channel is to compel the borrower to honor the initial agreement.
There is a 120-day grace period, where if the debtor still does not pay, the lender may now go forward with the foreclosure to get their dues back. During this period, the lender will contact the debtor and see if they are willing to take another option. It is also at this time that the lender may furnish the borrower with a breach letter to inform them that they have defaulted on the loan before accelerating the foreclosure.
Step2: Contacting a foreclosure attorney
Once the grace period expires, the debtor can contact a Florida foreclosure attorney. This legal personnel will guide the lender on how to proceed with the process and may even call on the debtor for arbitration as they look for other means to settle the loan. It is reasonable for the debtor to try to negotiate another payment plan with their lender, as a record of foreclosure can hurt their creditworthiness.
Step3: Issuing the notice of default
Once a notice of default is issued to the debtor, the foreclosure process officially begins. Serving the notice of default to the loan delinquent is a way to tell them that the matter is in court. A Florida sheriff or any other relevant officer may hand-deliver the document to the defaulter.
The judicial process starts with filling of the summons and complaints. At this point, the debtor should understand that there will be a public recording of the case.
Step4: Response from the debtor
After the issue of the notice of the default, the debtor has twenty days to respond and have recordings taken by a court clerk. The response stage is a chance for the defendant to argue out his or her case before it goes to the jury. If there is no response, the case proceeds to summary judgment.
Step5: Foreclosure trial
The court will hear the case and offer a ruling, which both the defendant and plaintiff should abide by. The defendant may also hire a foreclosure lawyer to help with their defense if they want to change the tide of the court sessions.
Step6: Foreclosure sale
The foreclosure sale is the final step of the foreclosure process in Florida. It involves recovering the dues owed to the lender. The property will undergo auction a few days or weeks after the ruling in order for the bank to cut their losses and at least regain what is owed on the property. If the property doesn’t get sold, the bank will possess the home and become an REO property. A debtor may appeal the ruling if he or she has sufficient grounds to do so.
Final word
Losing your home can be scary, but there are ways to avoid foreclosure if you take a proactive approach. Some of the ways to avoid foreclosure include:
- Disputing the foreclosure: Use a defense attorney to state your case
- Rent out the property: Use the money from the rent to pay off your monthly mortgage
- Florida Mortgage Assistance Programs: Florida HHF Elderly Mortgage Assistance Program (ELMORE) and HUD.gov offer counseling are just some of the resources to help you avoid foreclosure.
- Selling the property: Selling the property before foreclosure will allow you to avoid foreclosure and hopefully also make a profit.
- Filing for bankruptcy: This will affect your credit, but at least it will stop all lawsuits and attempts to collect a credit by creating an “automatic stay”.
- Mortgage Workout: You can negotiate with your lender to lower your monthly bill.
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