When homeowners fall behind on their mortgage payments, the bank may pursue foreclosure to sell the property and satisfy the mortgage balance. However, homeowners may have an opportunity before it’s too late to stop foreclosure and they lose their property. In Florida, it may become too late to prevent foreclosure when the court holds a foreclosure sale and sells the property at a public auction.
Understanding the Foreclosure Process: Notice of Default and Notice of Sale
The foreclosure process begins when a homeowner misses their first mortgage payment. After the first missed monthly payment, the mortgage holder or servicer may contact the homeowner to provide notice of default, letting the homeowner know that their missed payment constitutes a default. After three months of missed payments on their mortgage loan, a mortgage holder or servicer will send the homeowner a notice to accelerate, which gives the homeowner 30 days to make up all their missed payments.
Should the homeowner fail to make up the missed monthly mortgage payments, the mortgage holder or servicer will file a lawsuit to obtain a foreclosure judgment and issue a notice of sale. The notice of sale informs the homeowner and the public of the date and time of the public auction, during which the court will sell the property to the highest bidder. A homeowner can stop the sale by bringing their mortgage payments up to date and paying the mortgage lender or servicer for the legal expenses they incurred in pursuing a foreclosure action.
Timeline of a Foreclosure
In a foreclosure case, a lender or servicer may contact a homeowner after the first or second missed monthly payment to inform them that they have defaulted under the mortgage and discuss the reasons for the missed payments. The lender or service may notify the homeowner of their options, such as applying for a loan modification to help reduce their mortgage payments or a forbearance period if the homeowner expects to resume payments in a few months.
After three or four months of missed payments, the lender or servicer will send the homeowner a formal notice of default and intent to foreclose, providing the homeowner with 30 days to bring their payments up to date or make alternative arrangements with the lender or servicer to avoid foreclosure. After 30 days, the lender or servicer will file a foreclosure lawsuit and a lis pendens, which serves as public notice of legal action involving the property.
Once the lender or servicer files the lawsuit, they must serve the complaint and court summons on the homeowner. The homeowner then has 20 days to file an answer to respond to the allegations in the foreclosure complaint. A homeowner can file a valid answer to a foreclosure complaint by alleging that they tendered monthly payments or that they do not have a mortgage with the plaintiff. Otherwise, the court will likely rule in favor of the lender and enter a judgment of foreclosure.
After entering judgment, the court will schedule a foreclosure sale date, usually within four to six weeks. On the foreclosure sale date, the court clerk will conduct a public auction to sell the property to the highest bidder. The winning bidder then pays the full amount of their bid by the end of the day, after which the clerk issues a certificate of sale upon receipt of the winning bidder’s funds.
What to Do Immediately: The First 90 Days
Homeowners have several options for stopping a foreclosure within the first 90 days after missing their first payment. Homeowners should contact their mortgage lender or servicer as soon as possible after missing their first payment to discuss potential arrangements that can avoid the need for foreclosure. Homeowners should also gather all documentation related to their mortgage, including the loan documents, monthly statements, and proof of mortgage payments. Finally, homeowners should contact an attorney as soon as possible to understand their legal options for stopping a foreclosure.
Options to Stop a Foreclosure
Common options that homeowners have to stop a foreclosure include:
- Loan modification agreements, which can reduce mortgage payments by lowering the interest rate or extending the duration of the mortgage
- Refinancing, which may help a homeowner access lower interest rates to reduce payments
- Forbearance, under which a lender agrees to pause payment for several months
Using Bankruptcy as a Foreclosure Defense
When a homeowner falls behind on their payments, they can also file for bankruptcy to stop a foreclosure proceeding. A bankruptcy filing imposes an “automatic stay,” which prohibits creditors, such as mortgage lenders, from initiating or continuing any legal action to recover debts, including foreclosure lawsuits. However, the automatic stay ends at the close of the bankruptcy case. Furthermore, a mortgage lender can petition the bankruptcy court to excuse them from the automatic stay.
The “Too Late” Moment: What Happens at the Foreclosure Auction
In Florida, it becomes “too late” to stop a foreclosure when the property officially sells at the public auction. Unlike other states, Florida does not offer homeowners a formal post-sale redemption period in the legal foreclosure process. Therefore, once the property is sold at auction, the homeowner may lose the opportunity to prevent foreclosure. Under Florida foreclosure laws, the right of redemption ends upon the later of the filing of a certificate of sale by the clerk of the court or the time specified in the foreclosure judgment.
At a foreclosure auction, the court clerk typically conducts an online public auction. Bidders must register for an auction and deposit a percentage of their high bid with the court. The clerk will then sell the property to the highest bidder. The winning bidder must pay the balance of their bid plus court registry fees by the end of the court’s business day or by the deadline set in the foreclosure judgment. A winning bidder who fails to pay the balance of their bid will lose their deposit.
The Importance of Hiring an Experienced Foreclosure Attorney
A knowledgeable foreclosure attorney can help a homeowner explore their legal options for saving their home from foreclosure. An attorney can negotiate with a lender to pursue arrangements that avoid foreclosure. An attorney can also identify viable defenses that a homeowner may have against a foreclosure lawsuit. A lawyer will help a homeowner pursue their rights before it becomes too late to stop a foreclosure.
Contact Our Foreclosure Defense Lawyers to Learn More
If you’re struggling with mortgage debt and missed mortgage payments, it’s best to take action as soon as possible to prevent foreclosure proceedings.
When you receive a foreclosure notice from the bank, taking prompt action can give you the best chance of saving your home and protecting your rights. Waiting too long may cause you to lose the opportunity to stop the legal process of foreclosure. Contact Loan Lawyers today for a free, confidential consultation with our Florida foreclosure defense attorneys to learn more about the foreclosure timeline and understand when it may be too late to fight a foreclosure.
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Matis Abarbanel is the founding partner and senior attorney at Loan Lawyers in South Florida. He focuses his practice on consumer rights, helping homeowners navigate issues such as foreclosure and financial hardship. Matis also brings a wealth of experience from his previous work in personal injury law. As a devout Chasidic Jew, he is committed to making a positive impact in his community and dedicates his efforts to charitable initiatives through his non-profit organization, The Center, which aids at-risk Jewish youth. Matis actively serves clients across South Florida and is passionate about empowering individuals to secure their rights and achieve a better future.
