Life often can take many turns that are unexpected… and that may be the understatement of the year for 2020.
If you or your family member are facing a foreclosure in Florida, it will help to understand the steps involved and how a skilled attorney can assist you through the process.
The first thing to be aware of is timing: the lender usually must wait for 120 days after the first missed payment, before filing a lawsuit to begin foreclosure proceedings.
During this time, the lender may begin to assess late fees. Hiring an attorney to negotiate on your behalf to mitigate losses can be helpful.
With Covid-19 affecting so many homeowners this year, the CARES act was put into place to help enable people to stay in their homes while dealing with some of the financial hardships brought on by the virus.
Under the terms of this act, homeowners with a federally backed loan may request and obtain forbearance from mortgage payments for 180 days; and then request and obtain additional forbearance for up to another 180 days.
Homeowners should know that while no additional fees will be added during this time, your regular interest payments will accrue. Contacting your lender to request the forbearance is necessary; and it will also be your responsibility to talk with your lender to determine how payments will be made once the forbearance period is over. The debt is not erased.
However, when a foreclosure is imminent, knowing the following sequence of events may be helpful:
Once the initial grace period for missed payments (normally 120 days) is over, the lender may issue a notice of default. This is the beginning of the foreclosure process. This lets the borrower know that because they have missed payments, the lender has filed a complaint against them.
Next, a Summons and Complaint will be filed with a lis pendens, (litigation is pending). This begins the judicial process, which means that the action will be publicly recorded.
Once this occurs, the homeowner will have 20 days to provide an answer to the complaint.
During this time, it will be helpful to seek the guidance of an experienced attorney, who can raise a defense on your behalf and file it with the clerk of court.
If no answer is filed, a decision will still be issued; it will just happen without the borrower being able to plead his or her case.
After this 20 day period, the lender, in most cases, will file a motion for summary judgment.
Filing for this type of judgment is the lender’s way of asking for a ruling from the court without having to go through formal court proceedings.
Both parties may present their cases in a summary judgment hearing.
The judge may either rule in favor of this motion or decide not to grant the summary judgment.
If the latter is true, then a foreclosure trial will be the next step.
At this point, the borrower will be well advised to hire an attorney to provide representation at the trial. After both sides present their arguments, the judge will issue a ruling.
If the judge decides in favor of the lender, the property will be scheduled to be sold at auction, usually within a few weeks.
In the state of Florida, lenders have the option to seek a “deficiency judgment” which may allow them to seek to collect dollar amounts beyond the revenue received from the sale of the property, to cover any losses incurred on the loan.
Having a qualified attorney on your side could help the borrower to avoid this additional judgment against them.
In fact, at various points during the foreclosure process, an attorney may be able to negotiate with the lender to mitigate losses, offer alternatives, such as a short sale, and, at the beginning, possibly keep the event of a foreclosure off of the record of the borrower.
This is a process which can be emotional and stressful. Hiring an experienced attorney to provide representation is a decision which will not only lessen the fear of the unknown, but allow the borrower to understand options and minimize losses.