As Foreclosures Climb in Florida, Know What to Expect During the Process

Throughout all of last year it seems, people could not wait to put the pandemic behind them and get back to normal life. Now that Florida has been reopened for a couple of months and ‘normal’ is looking more realistic than it has in the past 18 months, people are facing another challenge. With moratoriums on foreclosures and evictions expiring, they now face losing their home, which was protected at the height of the pandemic. As foreclosure activity continues to increase around the country, it is crucial that all homeowners in Florida know what to do if facing foreclosure and what to expect from the process. Below, we will cover the foreclosure process.

The Pre-Foreclosure Period in Florida

During the Great Recession, there were numerous reasons why millions of people lost their homes to foreclosure. One of these reasons was because lenders simply did not give homeowners adequate notice of the foreclosure. They simply started the foreclosure process and ended it as quickly as they could, pushing people out of their homes as they did.

To prevent this from happening again in the future, the federal government enacted the Dodd-Frank Act, which gave homeowners the protection of knowing they had a chance to get back on their feet financially before they would lose their homes. In most foreclosure cases, the servicer cannot start the foreclosure process until the homeowner is at least 120 days delinquent. After that time, the servicer can start the foreclosure process, unless there is a loss mitigation application pending.

Serving the Complaint

Foreclosures in Florida begin when the lender files a lawsuit and serves it to you. Once you are served with the foreclosure complaint, you must file your response with the court within 20 days. It is crucial that you file an answer. If you do not, the lender will likely seek a default judgment. Default judgments essentially allow the lender to win by default, and they may even seek a fast-track foreclosure if you do not respond or attend the court hearing.

Several defenses are available in foreclosure cases, and you should include these in your answer. A Florida foreclosure defense lawyer can advise on these defenses and which one is most suitable for your case. Still, even when defenses are included in your response, the lender may still file a motion for a summary judgment. When the lender files this type of motion, they are asking the court to rule in their favor without the need for a trial or other legal proceedings.

To avoid a summary judgment, you must raise legitimate defenses so your case can proceed to trial. It is also important to work with a foreclosure attorney in Florida that can argue those defenses for you during the trial. After the judge has heard from both sides, they will then determine if the lender has the right to foreclose on the home. If the court does find in favor of the lender, they will then order the home to be sold at a foreclosure sale.

You May Be Able to Reinstate Your Mortgage

Some states have enacted laws that allow borrowers to reinstate their mortgage by paying a lump sum payment that includes all delinquent payments and other costs and fees. When borrowers are able to do this, the lender must stop the foreclosure action.

In Florida, there is no such reinstatement law. However, most home loan contracts do allow for it. In these cases, borrowers can typically reinstate their mortgage right up until the point the court enters a judgment. It is important to work with a foreclosure attorney who will carefully review your home loan and determine if you can reinstate your mortgage. If your contract allows reinstatement, it will also outline how much time you have to reinstate it.

Even if your mortgage does not specifically allow for reinstatement, many lenders will allow it, again up until the court issues a judgment. It is critical that if you do reinstate your mortgage, you continue making your regular mortgage payments to avoid falling into foreclosure again.

You May Be Able to Redeem the Home

Redeeming your home is different than reinstating your mortgage. Instead of just paying the past due amounts and other fees, you must pay off the entire loan. Like when reinstating your mortgage, you will also have to pay all other costs including late fees, interest, and attorney’s fees.

It is not uncommon for homeowners who have defaulted on their mortgage to not have the resources to redeem a property. If you do, it is important to know that Florida law allows you to do so within a certain period of time. You must redeem your home before the certificate of sale is filed or until the redemption period outlined in the judgment of foreclosure expires.

The Foreclosure Auction

There is a good chance that when your home is sold in a foreclosure sale, the lender will purchase the home back. These properties are known as real estate owned (REO). Lenders may bid the amount of debt owed, or they may bid less. If the lender bids less than the total amount owed, they can then seek a deficiency judgment against the borrower.

Eviction

In most cases, the lender will get the right to possession in the foreclosure judgment after the certificate of title is filed by the clerk. The court will then likely issue a writ and the sheriff will execute it. If you do not vacate the property, the sheriff can then take action to force you out of the home.

Call Our Foreclosure Defense Attorneys in Broward County Today

If you have fallen behind in your mortgage payments or a lender has already started proceedings, our Broward County foreclosure defense lawyers can help. At Loan Lawyers, our seasoned attorneys can advise on the foreclosure process and give you the best chance of keeping your home throughout it. Call our South Florida foreclosure defense lawyer today at (954) 523-4357 or contact us online to schedule a free consultation.