Foreclosure in Florida entails many different steps. Two of the most important the lender must take are issuing the notice of default and notice of trustee sale. It is normal to feel trapped or helpless when you receive a notice of default from your lender. It is important that you do not give up. Simply receiving this notice does not mean you will lose your home. If you do allow the foreclosure to continue, the lender must also issue a notice of trustee sale.
There are strict requirements placed on both the notice of default and the notice of trustee sale. When lenders do not comply with these strict requirements, it can serve as a foreclosure defense. Below, our Fort Lauderdale foreclosure defense lawyers explain what you need to know about these two important notices.
What is the Notice of Default?
Your lender will issue a notice of default if they believe you have violated the contractual terms for delinquent payments. Usually, this means that you have not paid your mortgage for at least three consecutive months. The notice does not only inform you of the default but also of the fact that the lender is prepared to take legal action, which could result in you losing the property.
Once the lender has issued a notice of default, you are in the pre-foreclosure phase. At this point, your lender may still be willing to negotiate with you. Lenders do not really want to foreclose on homes. It is a long and costly process for them, and all so they can recover a property they do not really want. The options available for reversing the default status on your loan may include:
- Making a payment or payments to bring the loan current
- Negotiating for a loan modification, which could include changing the principal amount left on the loan, the interest rate, and more
- Arranging a short sale in which you sell the property before the lender can foreclose on the home
After receiving the notice of default, it is important to remember that the foreclosure process is a long one. There are many defenses available that can help you remain in your home. If your lender has issued a notice of default, it is essential that you speak to a Florida foreclosure defense lawyer who can explain what those options include.
Notice of Trustee Sale
Florida is a judicial foreclosure state. That means in order to foreclose on your property, the lender must file a lawsuit with the appropriate court to start the process. After that, the court must approve every action they take when trying to foreclose on your home.
After the lawsuit is filed with the court, the foreclosure trustee or the attorney for the lender will schedule a date to sell the property. A notice of trustee sale, sometimes also referred to as simply a notice of sale, is recorded in the same county where the property is located. The notice of trustee sale must state the exact location and time of the sale, as well as the minimum opening bid for the home.
In Florida, lenders must also publish a notice of the foreclosure sale in a newspaper. The notice must be published one day a week for two weeks in a row. The second time notice is published must be a minimum of five days before the sale.
The Foreclosure Sale
The notice of trustee sale is important because it tells the public of the day of the sale. Under Florida law, the sale must occur between 20 and 35 days from the date of the foreclosure judgment issued by the courts. The sale is open to the public and bids are placed during an auction.
Lenders can bid on the property at a foreclosure sale. In most cases, lenders make what is known as a credit bid. The lender bids the amount of debt owed on the mortgage, essentially earning credit in this amount. Lenders can bid the entire amount of the debt, including foreclosure costs and fees, or they may bid less. If the winning bid is less than the amount owed on the home, the lender can ask the court to issue a deficiency judgment against the borrower.
If a deficiency judgment is granted, the lender can then pursue the previous homeowner for the amount that is still owed. Any proceeds from the foreclosure sale will be subtracted from the original debt. If a deficiency judgment is granted, it is for the amount of debt the foreclosure sale did not cover. When the lender is the highest bidder, the property is considered to be “Real Estate Owned.”
In some instances, a third party offers more than what is owed for the initial debt. If this is the case and the sale generates excess proceeds, the previous homeowner is entitled to the surplus. Before acquiring the money, you must use any extra proceeds to pay off liens on the property.
It is crucial to work with a foreclosure defense lawyer, even if you are going to lose your home in a foreclosure sale. If the lender obtains a deficiency judgment against you, it could result in thousands of dollars more in debt for you. A foreclosure defense lawyer will not only give you the best chance of keeping your home but also shield you from any deficiency judgment that could make your life more difficult.
Call Our Foreclosure Defense Lawyer in Fort Lauderdale Today
Being sent a notice of default is scary, and it is stressful to receive a notice of trustee sale. At Loan Lawyers, our Florida foreclosure defense lawyer can help you understand what these documents may mean for your future. We will also advise on what defenses are available in your case, and will work hard to make sure you obtain the most favorable outcome possible. Call us now at (954) 523-4357 or fill out our online form to request a free review of your case.
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