Foreclosure FAQs

The State of Florida has one of the highest foreclosure rates in the country. Most homeowners assume that there is no legal defense to the lawsuit when they fall behind on their mortgage payments. However, that could not be further from the truth. Sometimes, homeowners are wrongfully foreclosed upon even when they are current on their payments! It is important to consult with an experienced Florida Foreclosure Defense Attorney before throwing in the towel on your home or investment property.

Frequently Asked Questions

Here are some of the common questions that clients asks during the initial consultation on a Florida Foreclosure Defense case:

What happens if I do not hire an attorney to fight my Florida foreclosure?

The bank will get a swift and easy judgment and you will be out of your home within a few short months. If you hire an attorney, chances are, you can stay on the property for an extended period of time. You may even be able to work out a loan modification, principal reduction, deed in lieu or short sale. In some cases, it can take years for a foreclosure case to end. In the meantime, you are able to save your money (because you are not making a mortgage payment) for a lump sum offer with the lender to reinstate the loan, for a new place or for other bills.

Why does the Florida foreclosure process take so long?

Florida is a judicial state when it comes to foreclosing on real property. What does this mean? It means that the lender must go through the state court system and get a judgment in order to sell your home. Many states, including Georgia, are non-judicial states. Lenders do not have to use the courts to foreclose on property. They simply have to abide newspaper notice requirements and so forth to execute the sale.

With a combination of a collapsing economy, falling home prices and because Florida is a judicial state, Plaintiffs must use the courts to move forward with a foreclosure. There are a lot of cases backed up and just sitting on court dockets. Many of the Florida foreclosure courts have lost much of their state funding and now are trying to figure out how to handle thousands of pending foreclosure cases with limited resources.

If the party suing me for foreclosure is not the right party, can the true owner file a foreclosure against me?

Many times cases are dismissed because the wrong party is bringing the lawsuit. Does this mean that the nightmare is all over? I get a free house? The answer is probably not. Judges will usually give the foreclosing Plaintiff at least one more chance to amend the court filings and file documents that support ownership of the note and mortgage. However, if a fraud was committed upon on the court, the Plaintiff may be banned from brining another foreclosure lawsuit against that particular homeowner/defendant and a free home is more optimistic. Again, if the rightful owner brings the foreclosure action within five years of default on the loan, then the courts will most likely allow that party to continue with the lawsuit. This is a grey area of the law. Some courts require the action be brought within 5 years of the acceleration date.

What happens if I lose my foreclosure case?

The property will be set for sale, but the idea is you should have saved enough money to put something down on a new place. Whether or not the bank will pursue a deficiency judgment or write off the debt and send you a 1099 is a different matter. If you fear that is an option, you can always look to filing a bankruptcy or work with the IRS on paying back any tax liability. If the property is your primary residence, the tax debt may be absolved. The foreclosure can be reported on your credit report for up to 7 years. In some instances, this can be negotiated down. Once the property is sold at auction, a certificate of title will be issued. There is about a 10 (ten) day window after the sale where the sale can be contested, but it is an uphill battle. Once the title is transferred out of the borrower’s name, the borrower will have short window to vacate the property. However, it is only when title is transferred out of the borrower’s name, can the borrower be forced to leave the property. A deficiency judgment holds the borrower(s) responsible for the difference between what the property sold for at auction and how much was still owed by the borrower at the time of sale.

What is the RMFM program?

Up until December 19, 2011, Florida law provided that borrowers whose primary residences were in foreclosure were entitled to mandatory mediation. The borrower could elect out of or choose not to participate in the program. Was this program effective? Many of those who dealt with and were close to the program agreed that the program was not only a failure but a drain on the foreclosing process. The program was ineffective and caused borrowers time, money and effort and to no avail. Borrowers were disclosing anything and everything to bank representatives who would appear at these mediations. However, the representatives would not have settlement authority to reach some sort of resolution such as a modification or other alternatives to foreclosure. Informal mediations are still available. There are called conciliation conferences. This meeting can be arranged between the attorney for the bank and the attorney for the homeowner. Again, it does not always mean it is in your best interest to set these types of meeting up. You do not want to enter an arrangement with a party who has no interest or right to your property.

What happens to my tenants when a foreclosure is filed?

If it is your tenant’s primary residence, the bank must honor the remaining portion on the lease. If the tenancy is month to month, the Bank must give the tenant at least 90 days to vacate the property. Just because a property goes into foreclosure, this does not relieve the tenant from paying rent, even if the landlord is not applying it to the mortgage payment. If the tenant enters into a lease after foreclosure is filed, the Bank is typically not required to honor the remaining terms of the lease. As a landlord, you should disclose that the property is in disclosure before you decide to rent it to a tenant.

How much does it cost to defend a foreclosure lawsuit?

It depends on several factors. What stage of the litigation is the case in? How much is your normal monthly mortgage payment? Does the attorney work off of a contingency fee or a flat fee? Some attorneys require large retainers up front while others operate on a monthly fee basis. Very few attorneys work off of a contingency fee basis in these types of cases but it is possible. If you are on a very limited income, you may be eligible for legal aid.

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