 What is ForeclosureForeclosure is the elimination of all rights of the homeowner covered by a mortgage and a process in which the homeowner’s property becomes the absolute ownership of the lending institution.
If you are facing foreclosure and think you are alone, think again! Foreclosure filings are increasing dramatically across the nation and particularly in Florida. In fact approximately 4.8 million homes nationwide are facing foreclosure and estimates suggest another 7.3 million Americans are expected to default on their loans between 2009 and 2010, 1.2 million of them in Florida.
Florida is the third leading state in the United States in Foreclosure filings. Miami-Dade County alone experienced approximately 54,040 Foreclosure filings in 2008. According to a recent Miami Herald article, “compared to a year ago, the rate in Broward County rose 53 percent and 97 percent in Miami-Dade County. These figures mean one of every 114 homes in Broward County is either going into foreclosure or already bank-owned. In Miami-Dade, there is one foreclosure for every 93 homes.”
The Foreclosure process begins when you fail to make mortgage payments. This could be due to anyone of several reasons such as unemployment, medical expenses, divorce, adjustable rate resets, increased real estate taxes, death and more.
Legal proceedings begin with a formal demand for payment which is a letter issued from the lender. This letter is referred to as a Notice of Default or Acceleration Letter. Usually the lender will send this notice when the borrower has been 3 months delinquent on the mortgage payments. This notice is a threat to terminate all your rights in that property, sell the property, and evict you from the premises.
What are my foreclosure rights in Florida.
Once the legal process of Foreclosure has begun, the borrower is accorded rights from the mortgage. One of the most important rights is the right of redemption. Redemption is the right of a property owner to redeem his/her real estate from foreclosure or tax sale by paying off the debt in full: including all penalties, arrears, property taxes, attorney fees, HOA fees, property insurance and any other fees advanced by the lender.
Under Florida law, the right to redemption is inherent in any mortgage. Any person having an interest in the mortgaged premises who would be adversely affected by the Foreclosure in entitled to redeem. A person or entity with the right of redemption may redeem the mortgaged property at any time before the issuance and filing of the certificate of sale or in the time period specified in the final judgment of foreclosure.
Additionally, loan documents may contain provisions that provide for various rights such as a right to reinstatement, choice of law, and limitations on borrower’s liability. A borrower has a right to defend a foreclosure action to enforce these provisions and to protect their property rights. It is important to obtain an attorney to give proper guidance and analysis.
Why Should I Fight My Foreclosure?
Defaulting home owners have limited options once they have been served with Foreclosure summons for their property. They include:
- 1. Negotiating a reinstatement of mortgage
- 2. Filing for Chapter 13 bankruptcy
- 3. Selling your property to pay off the debt
- 4. Giving up your home to the lenders
- 5. Filing for Foreclosure defense
Typically once the summons is delivered, the borrower has 20 days to respond to the summons using either one of the options stated above.
Negotiating the mortgage and filing for bankruptcy are only possible if the homeowner can afford the restructured monthly payments. If you can no longer afford the monthly payments on mortgages for any reason, you cannot opt for either route even if you can no longer afford paying the lender. On the other hand, if you wish to refinance or sell your property, you need to have a healthy equity.
In such cases, you will need to proceed for foreclosure defense if you still want to keep your home. Doing so will buy you enough time to work on other possible options as you are not expected to make mortgage payments during the litigation process for foreclosure. A lot can happen in the additional time afforded to you once you proceed for defense. So do not lose hope. You still have a fair chance of keeping your home safe!
Find an experienced law firm who will help you understand your case and the associated options you have at the time. They will help you study your case to dig out any possible counterclaims or valuable defense information against your creditors which would in turn prevent foreclosure and in some cases even force the lending company to pay damages. This could include something as basic as an improper assignment or failure to assign a mortgage and repayment note prior to foreclosure. Believe it or not there is a high incidence of this due to filing of incomplete documents or records by the mortgage company which gives you an opportunity to defend yourself claiming fraud.
In most cases, the company suing you is not your original lender. Having discovered this, you can file a counterclaim or defense on any aspect of the Foreclosure lawsuit filed against you, to buy you required time and find a proper channel of defense with the help of an attorney.
Foreclosure Defense
What are your options if you face Foreclosure Action?
The first decision you have to make when you are facing Foreclosure Action, is whether you are going to give into it or are willing to stand up against it and defend it. If you choose the latter option, you will need the help of an experienced attorney.
A Snapshot of steps leading to Foreclosure
We would like to emphasize that the legal proceedings vary from one state to another as per that particular state law. Seeking information for your case with a law firm not based in your state of residence may be a mistake so be careful. Not only could you gather wrong information, but you may be misled as well. Use a law firm that specializes in cases relating to Florida. However certain claims and defenses do come under the federal law, depending on the case.
The Foreclosure Process
In Florida, all lending banks follow the judicial foreclosure process. This process begins when the bank/lender files a lawsuit against the borrower, in the specific county Circuit Court As soon as the suit is filed, the home owner is served a notice on behalf of the bank. They are then given a timeline and an opportunity to file a counter claim to defend their rights. The main features of the State’s laws are
- A) Equitable Action
- B) No Judicial Relief for Debtors.
Pre-Foreclosure:
The Pre-Foreclosure requirements include a series of mandatory documents and pre-requisites to be stated clearly. Foremost these include existence of two important documents which is the Mortgage deed and the Note from the borrower. This is followed by Notice of the default prepared by the lending bank. Then is required the existence of a valid dispute and finally a way to amicably resolve the conflict.
Foreclosure Litigation
Foreclosure litigation begins with a filing of ‘Lis Pendens’ or litigation pending file against the borrower in the county court. After this, the debtor has 20 days to reply to the summons of the court with the help of an attorney. Based on the response, the court sets a date for the preliminary hearing where both parties are given time to settle amicably. If this fails, a Summary Hearing is set within 45 days after which a Foreclosure sale date is set by the court. This process has many other intermittent follow through steps which can be availed of at the discretion of the court. To take complete advantage of the system, and to fight consistently for your right to save your home, you must be sure to hire an experienced attorney who can justify your case.
Benefits of Defending Foreclosure Action
Losing your home to Foreclosure is anyone’s worst nightmare. The repercussions can be huge and alarming both socially and emotionally. It can and is likely to include relocating to another area or city, job changes, living away from family and friends etc. Often, the disturbing impact of such a loss affects the whole family, especially children. There is also a risk of losing a good part of your capital and savings if the home sale results in a deficiency judgment. This could affect your finances for the rest of your life, if you are not careful.
One of the ways to defend your home from foreclosure is to file for Bankruptcy. This gives debtors a substantial timeline to re-possess their home without being evicted. The timeline can range from a good three to five years.
Debtors can resort to many other defense claims against foreclosure. Doing so helps the debtors negotiate with the lenders in an attempt to save their homes with or without filing for bankruptcy. This can delay the entire foreclosure process so that the debtors have a chance to work on reclaiming their homes either by looking at alternate means or if lenders delay the process due to some finer points leading them to start the process from the beginning.
Florida Foreclosure Laws
In the State of Florida, The law states that Lenders/ Creditors may use the Judicial Process to Foreclose a defaulted mortgage. The State of Florida has no Non-Judicial Foreclosure, as per Florida Foreclosure Laws.
Pre-Foreclosure Duration
The process commences when the creditor files a lawsuit against the debtor in the county court around which the property is located, following a notice of defaulting the mortgage. Once the “Lis Pendens” or a “Litigation pending” notice is filed, the case goes on public record. The creditor can then notify the home owner of the suit filed against them for defaulting on the loan by mail or in person.
Once officially recorded in court, the defaulting party is sent a summons to the filed suit and are expected to respond to the notice within a stipulated period of time which is usually 20 days. If the debtor/ home owner fails to respond to the court summons, the court can find the debtor in default and proceed to a final hearing against the defaulting party. If the court ruling is against the homeowner, the final hearing will settle on the total value the homeowner owes the creditor as well as the timeline for foreclosure or short sale.
As per the Florida Foreclosure Laws, the creditors are not expected to contact the homeowners prior to initiating the lawsuit for foreclosure. However, this is not the same for deeds of trust or individual mortgage cases. The homeowner has a right to stop or delay the foreclosure process by paying the part or full payment due to the lending party.
Florida Foreclosure Sale or Auction Notice
Once the court has settled on a final hearing, the Foreclosure Sale date is set. This usually varies from 25 to 75 days after the hearing depending on various factors and specific State Laws. The court clerk then sends the concerned parties a notice of sale with the location, date and time of sale of the property as specified by the county court. This notice is circulated once a week for a period of two weeks. The law states that the second Sale notice should be issued at least 5 days prior to the day of sale.
The county court clerk typically presides over the sale which usually takes place at the county court at 11 am on the date of sale. The winning bid or the buyer is provided with a “Certificate of Sale” by the court clerk. The buyer is expected to deposit 5% of the total value of the sale right after the sale is closed and pay the remaining due amount within 20 days. Once the due amount is received, the court clerk transfers the ownership deed to the buyer provided no objections are met with.
Once the ‘Certificate of Sale’ is issued to the buyer, the debtor typically loses any right for redemption. However, this is subject to individual case basis.
Continue: Bank Deceptions
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