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How Long Does A Bank Have To Foreclose On A Delinquent Mortgage?

Financial circumstances change all the time, and it is not unusual for homeowners to fall behind on a mortgage. Whether it is a job loss or unexpected bills, sometimes the money to make a mortgage payment just isn’t there. When you fall behind on your mortgage, how long does a bank have to file for foreclosure?

Foreclosure doesn’t happen immediately after a missed payment. Lenders are required to give home owners a grace period of 10-15 days to catch up on a single missed payment. After two missed payments, homeowners will begin receiving phone calls and letters about the overdue mortgage. If you cannot make your payments, it is important not to ignore these communications. When you are only slightly overdue, it is a good time to talk to your mortgagor about your options.

Once your mortgage payment is 120 days overdue, the bank may legally begin the foreclosure process. The federal Consumer Financial Protection Bureau enacted this rule beginning on January 10, 2014 in order to give homeowners adequate time to discuss a loan modification or other plan to catch up the delinquent mortgage. Once this 120-day period ends, the foreclosure process may begin.

However, there is no rule that a bank must begin the foreclosure process after the 120-day period is over. In some instances, mortgage lenders have waited years before beginning a foreclosure. This occurred frequently during the peak of the financial and foreclosure crisis, and many homeowners spent years living in their homes without making payments.

The state of Florida does require creditors like a mortgage lender to file a lawsuit over a debt within five years. This statute of limitations means that if a mortgage lender fails to file for foreclosure within the five-year deadline, it may not be able to institute foreclosure proceedings at all. As a result, some courts have held a bank has no recourse against a homeowner that missed five years of payments without facing a foreclosure proceeding.

However, the state of this law is in flux. The Florida Supreme Court is currently deciding an appeal from the Fifth District Court of Appeals that will determine when the clock begins ticking on the state’s statute of limitations. The Fifth DCA, Fourth DCA, and Third DCA have all issued conflicting decisions on when the statute of limitations begins and when the statute of limitations forbids a bank from pursuing a foreclosure.

Some courts have held that the statute begins running as soon as the bank accelerates the mortgage in anticipation of a foreclosure. Others have held that each new missed payment starts the clock running again. Still others have held that the five-year limit restarts from the date the first foreclosure case was filed, allowing lenders to file additional foreclosure cases after the initial case is dismissed without prejudice.

The Florida Supreme Court is expected to rule on the Fifth DCA’s appeal soon. At that time, it will hopefully become clear when the statute of limitations applies and when a mortgage lender is time-barred from filing for foreclosure.

If your house is in danger of foreclosure, it is important to speak with an attorney as soon as possible. At Loan Lawyers, our attorneys can help you create a plan to save your house using tactics like traditional foreclosure defense, loan modifications, or bankruptcies. Before you give up on your home, schedule a free consultation today by calling (844) FIGHT-13 (344-4813).

  • ABC News
  • American Civil Liberties Union
  • CBS 4
  • CNN
  • Daily Business Review
  • Florida Trend's - Florida Legal Elite 2014
  • Florida Trend's - Florida Legal Elite 2014
  • National Association of Consumer Advocates
  • National Association of Consumer Bankruptcy Attorneys
  • NBC News
  • National Consumer Law Center
  • The New York Times
  • Avvo
  • Avvo
  • Avvo
  • Avvo
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