As Fear of Foreclosure Increases in Florida, Here are Ways to Stop It

Florida homeowner meeting with a Fort Lauderdale foreclosure defense lawyer

The Household Pulse Survey, which has been conducted by the U.S. Census Bureau, shows that seven percent of households in Florida are behind on their mortgage and rent payments. The Census Bureau has been taking the survey at various times during the pandemic since it first broke out nine months ago. Of that seven percent, over half of respondents, 51.2 percent, say that they fear eviction or foreclosure, which is the worst percentage in the entire country.

The survey has a margin of error of 13 percent. That means the actual percentage could be as low as 38 percent or as high as 64 percent. Either way, it is a large increase from the 32 percent that said they feared eviction or foreclosure in the previous survey.

Clearly, many households in Florida are in trouble. Fortunately, there are still options for homeowners, and ways to possibly stop a foreclosure.

Federal Moratorium on Foreclosures

It was in April when Governor DeSantis issued a statewide moratorium on foreclosures and evictions. In early October when DeSantis allowed that order to expire, it meant that thousands of Florida homeowners faced the real fear of losing their homes. For homeowners with federally-backed mortgages, however, there is still hope.

In late August, the Federal Housing Finance Agency (FHFA) extended the federal moratorium on Enterprise-backed mortgages. This moratorium applies only to single-family mortgages backed by Fannie Mae and Freddie Mac, otherwise known as the Enterprises. The moratorium was originally set to expire on August 31, 2020. Now, the moratorium has been extended until December 31, 2020, and it may even be extended again in the future.

While the federal moratorium will protect over 28 million homeowners around the country, including many here in Florida, it will not protect everyone. Homeowners without a federally-backed mortgage that are in fear of foreclosure should understand there are still ways to stop it.

Unclean Hands

Florida is a judicial foreclosure state, which means to foreclose on the property, lenders must file a lawsuit. The case will then go to trial, which is heard by a judge without a jury. At the trial, you can raise a number of defenses that can stop the foreclosure. One of the defenses available is that the lender has “unclean hands.”

Florida case law Federal Savings and Loan v. Robert Smith shows that when a lender has unclean hands, the judge must deny the foreclosure action. To prove that a lender has unclean hands, you must prove that the lender engaged in an illegal or fraudulent transaction, or an unconscionable or oppressive act. For example, if the servicer did not allow you to repay your mortgage payments, that could be considered tortious interference, which can prove unclean hands. You must also prove that the act caused you harm.

Proving unclean hands is sometimes challenging, and proof is required if you are making such a claim. A foreclosure defense lawyer will understand the necessary evidence to collect that can prove unclean hands.

Lack of Notice of Default

In Florida, lenders are required to provide homeowners with a notice of default, and the action required by the homeowner to correct it. Usually, the requirement is found in the 22nd paragraph of the mortgage agreement. The lender must typically send the notice of default at least 30 days prior to starting foreclosure proceedings. The notice must also state the action required by the homeowner to stop the foreclosure.

Borrowers can raise the defense that the notice of default was never received. When they do, the lender then has the burden of proof of showing that they sent the appropriate notice.

Failure to Fill All Conditions Precedent

In a mortgage contract, each side has obligations to the other. The borrower has an obligation to pay mortgage payments on time to the lender, but the lender also has several conditions to meet. Failing to provide homeowners with the notice of default is just one of these conditions, but there may be others, as well. When lenders do not meet all of their conditions, it can serve as a defense to a foreclosure action.

Chapter 13 Bankruptcy

No one ever wants to face bankruptcy, but it can offer a real solution to a foreclosure action. If you file for Chapter 7 bankruptcy, you may still lose your home. The bankruptcy trustee will sell some of your assets to help repay the lenders you still owe. Although a portion of your home’s equity may be exempt, you may still lose your home.

A Chapter 13 bankruptcy, on the other hand, may allow you to keep your home. In this type of bankruptcy, the debts you have incurred are restructured into a payment plan that is more manageable for you. Usually, the plan extends for three to five years, during which time you repay your debts. If you are struggling with other types of debt, such as credit cards or auto loans, you can also restructure these during a Chapter 13 bankruptcy.

Although you are not required to work with a bankruptcy lawyer, it is important that you do. The bankruptcy process is not always a quick one, and even a small mistake could forfeit your right to file bankruptcy. A lawyer will ensure no mistakes are made, and that the repayment plan is as affordable as possible.

Our Florida Foreclosure Defense Lawyers Know How to Stop the Process

Floridians have been hit hard during the pandemic and it is the new reality that more homeowners are facing foreclosure than in recent years. If you are in fear of losing your home, our Fort Lauderdale foreclosure defense lawyers can advise on your case.

At Loan Lawyers, we can determine if your lender has taken the appropriate actions and when they have not, will use that defense to help you save your home. We will also advise on other foreclosure defenses that may apply to your case. Call us today at (954) 807-1361 or contact us online to schedule a free consultation with one of our experienced attorneys.

Loan Lawyers has helped over 5,000 South Florida homeowners and consumers with their debt problems, we have saved over 2,000 homes from foreclosure, eliminated more than $100,000,000 in mortgage principal and consumer debt, and have recovered over $10,000,000 on behalf of our clients due to bank, loan servicer, and debt collector violations. Contact us for a free consultation to see how we may be able to help you.