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What Happens During Home Foreclosure?

home foreclosure

The prospect of losing your home is understandably a terrifying one. Familiarizing yourself with the Florida home foreclosure process is the first step to understanding your options if you are facing foreclosure. Though the process is complicated and lengthy, there are many points at which you will have the opportunity to negotiate with the lender with the aim of keeping your home. We’ve set out the key stages in the process below so that you are empowered to act quickly and decisively if you ever find yourself at risk of home foreclosure.

What Is Home Foreclosure?

Home foreclosure is the process by which a lender seeks to recover the outstanding balance on a home loan from a borrower who has defaulted on their mortgage. The balance is recovered through the sale of the property at an auction, and the funds from the sale are used to settle the outstanding balance on the loan. Foreclosure is also referred to as ‘home repossession.’

It is important to note that in Florida, foreclosure is a judicial process (not all states are ‘judicial foreclosure’ states). This means that the lender must bring a civil claim against the borrower in court and seek the court’s permission to repossess and sell the property at an auction. While each home foreclosure is different from the next, depending on the circumstances of the borrower and their response to the proceedings, foreclosures typically take between six months to a year (or longer if unforeseen obstacles cause a delay in the legal proceedings).

Notice Of Default

All foreclosures begin with a default, i.e. the borrower fails to make their monthly mortgage payment. While some lenders will begin foreclosure proceedings after one missed payment, usually, lenders will commence proceedings when the borrower has missed about three payments in a row.

The proceedings officially commence when the lender files a ‘notice of default’ at the office of the county recorder, which formally notifies the borrower that they are in default. The notice will set out the amount owed and give the borrower a period to remedy the default (i.e., to catch up on their missed payments). During this period, the borrower has an opportunity to negotiate with the lender to attempt to avoid home foreclosure.

Lis Pendens, Summons And Complaint

If the borrower fails to remedy the default or reach an agreement with the lender, then the lender will file a ‘lis pendens’ (‘suit pending’) – this is a public document that essentially gives notice that foreclosure proceedings are imminent. Once the lis pendens has been filed, the lender has up to 120 days to serve the borrower with a summons and complaint. A summons notifies the borrower that foreclosure proceedings have been initiated against them and sets out a timeline (usually only 20 days) for them to respond to the allegations set out in the complaint.

Default, Summary, And Final Judgment

If the borrower fails to respond to the complaint, the lender may seek to obtain default judgment against them. If they do respond but the response does not disclose a valid defense, the lender may seek to obtain summary judgment against them. If a response disclosing a valid defense is filed, then the proceedings will move to the trial preparation phase. If the foreclosure goes to the trial phase, the length of the home foreclosure process will be greatly extended, as both parties will need to gather and present their evidence and argue their case before the court.

Default Judgment

If the lender files for default judgment, the court will consider the lender’s case in the absence of any response or defense from the borrower. If the court decides to grant the default judgment, it will issue a final judgment that sets out the final amount owing by the borrower (including any interest and liability for the lender’s legal costs). The court will also set a date for the public auction of the property, which will usually be about a month following the date of the final judgment.

Summary Judgment

A lender may apply for summary judgment when a borrower has filed a response to the complaint, but the response lacks sufficient evidence. By filing for summary judgment, the lender is essentially arguing that there would be no point in going to trial because the borrower clearly lacks a valid defense. If the court grants the summary judgment, they will enter a final judgment (as described above), and the home foreclosure sale will proceed.

Auction And Right Of Redemption

The date of the foreclosure sale will have been set by the court in its final judgment (regardless of whether that judgment was issued in default judgment, summary judgment, or trial proceedings). A public auction will be held, and the home will be sold to the highest bidder. However, in Florida, the borrower has a ‘right of redemption.’ In terms of this right, the borrower has ten days following the sale of their home by public auction to remedy their indebtedness and prevent the sale from going through. The borrower will need to pay the full amount owing on the mortgage, plus any interest and fees, in order to exercise their right of redemption. Once the ten-day period has lapsed (without the borrower exercising their right of redemption), the county clerk will issue a certificate of title to the new owner.

Post-foreclosure Proceedings

In some cases, the foreclosure sale is not the end of the home foreclosure process. Homeowners should be aware that Florida is a ‘right of recourse’ state. That means that if the proceeds from the foreclosure sale are insufficient to cover the amount owing on the mortgage, the lender can still initiate further proceedings to cover the amount outstanding from the borrower and may seek to execute against other assets that the borrower may have.

How To Avoid Home Foreclosure in Florida

There are a number of options that you can explore to try to avoid home foreclosure. These include renegotiating the terms of the mortgage with the lender, loan reinstatement, and signing a deed-in-lieu of foreclosure. And, as the process outlined above makes clear, there are several opportunities within the foreclosure process itself to come to an agreement with your lender before the actual foreclosure sale takes place.

To give yourself the best chance of saving your home, you will need a reliable foreclosure defense attorney by your side. At the offices of Gary I. Handin, P.A., we have years of experience in assisting distressed homeowners facing foreclosure proceedings. We will advise you on your options and do our utmost to help you achieve the best outcome for you and your family. Call us at 1-877-815-4560 to schedule a consultation.

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Gary I. Handin, P.A.

Providing professional legal services for the city of Coral Springs. Contact us today for a free consultation – 954-796-9600.

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