It is important to note that the process of foreclosure can vary from state to state, as can types of mortgages. These rights are specifically in reference to the state of Florida. If you are looking for information about foreclosure rights in another state, consult an attorney in that state.
Knowing your foreclosure rights in Florida is the best way to prevent losing your home or come to an acceptable resolution. In order to understand the foreclosure process, let’s first get back to the basic principals of mortgages. Generally speaking if you need a loan to purchase your home, you sign a promissory note and a mortgage. The promissory note will have the terms of your loan including the details of late fees and basically functions as an IOU.
The first step in the foreclosure process is a missed payment. A missed payment on its own is not grounds for foreclosure. Most promissory notes allow for a grace period following the first missed payment. After that grace period a late fee is assessed as detailed in the promissory note. If you are in a difficult financial situation, one missed payment may turn into several missed payments. This is when you will start accruing late fees and penalties and the company that holds your mortgage will most likely start contacting you by phone or mail or both.
Sometimes it is possible to renegotiate the terms of your payments so that you can get caught up on your payments. This can be a complicated process and is done on a case by case basis with the homeowner and loan holder directly.
The Consumer Financial Protection Bureau’s (CFPB) website contains information for consumers who are having problems paying their mortgage. Due to the experience many borrowers had during the most recent mortgage crises, the CFPB instituted several new rules. There are free foreclosure resources available if you are behind on payments. So be leery of anyone who tries to charge you in advance for help or offers a guarantee that they can stop your foreclosure. An experienced attorney can help you understand your rights and can attempt to stop the foreclosure of your home, but there are no guarantees—especially if you are days away from being kicked out of your home.
Mortgage servicers are required to make a good faith effort to contact you, the borrower, no later than 36 days after a missed payment. Before you become 45 days delinquent, a written notice must be sent to you and the mortgage servicer may not file for foreclosure until you are at least 120 days delinquent. These rules force the mortgage servicer to attempt to contact the borrower and give the borrower a minimum of 120 days to become current or work out a payment agreement or loan modification with the mortgage holder.
Please note, the CFPB allows for the most protection for borrowers who seek help early in the process. A borrower can submit an application for mortgage assistance. The sooner this complete application is received the better. If a mortgage servicer receives a complete application 45 days or more prior to a scheduled foreclosure sale, the servicer must acknowledge receipt of the application in writing and determine if it is complete. If the application is deemed incomplete, the servicer must notify the applicant and include a list of what information is missing.
If the application submitted is complete, mortgage servicers are then required to evaluate the borrower for all alternative options other than foreclosure. If a borrower is denied a loan modification option, the mortgage servicer is required to give the specific reason for the denial. Another important item to note is that the CFPB accepts consumer complaints about mortgages. If you have a problem with a mortgage servicer or feel that they are not adhering to the policies set by the CFPB you can call the CFPB at 855-411-2372 or complete a complaint form online.
If you don’t understand all of your options or you don’t feel comfortable navigating this process on your own, you should consult with an experienced attorney.
A breach letter is another important factor in mortgage contracts when dealing with a foreclosure in the state of Florida. Florida mortgages often contain a clause that require the mortgage servicer to send the borrower a breach letter informing the borrower that he or she is in default prior to proceeding with a foreclosure. The breach letter has had varying levels of influence on the foreclosure process in Florida. There have been cases where a foreclosure has been thrown out due to a mortgage servicer note adhering to the strict guidelines of what should be included in the breach letter.
A breach letter should include and specify the following: the default, what action is required to stop the default, a date that action must be completed by, and that the failure of that action on or before the due date may result in acceleration of the foreclosure.
The mortgage servicer acting as the plaintiff must file a lawsuit against the borrower, the defendant. The initial foreclosure process is started with the court at least 120 days after the borrower becomes delinquent with payment by filing a complaint with the court. The complaint is then served to the borrower with a summons and the borrower has 21 days to respond.
If the borrower does not respond a default judgment in favor of the mortgage servicer may be issued. If the borrower files a response with the court, the mortgage servicer can either file a motion for a summary judgement or go to trial.
The mortgage servicer may request an order to show cause why the foreclosure may not proceed. The court will set a hearing within an abbreviated time to determine whether there is or is not cause. If the borrower does not respond, does not show up in court, or does not show good cause why the foreclosure should not proceed the court can enter a final judgement of foreclosure. Once a lender is granted a judgment, the property may be sold not less than 20 days but no more than 35 days after the judgment. Once a judgment is entered against the borrower the property will be auctioned off or revert to the lender.
Following the sale of a foreclosure in Florida it is also important to be aware of a possible deficiency judgement. Often the mortgage servicer is not able to auction or sell the property for as much as the borrower owes. The borrower then can be held liable for the difference in these amounts.
Foreclosures can vary by state and it is important to know your rights. If you are behind on payments, an experienced attorney can assist you with navigating the foreclosure process. It’s important not to wait to get help before it is too late.
The article above is intended for education purposes only and should not be considered legal advice. If you need legal advice, contact an attorney regarding your situation.