Going through a Florida foreclosure is not a pleasant experience. On top of that, you can get overwhelmed with dealing with the foreclosure process. There are legal timelines you must be aware of like court hearings and possibly eviction if you can’t stop the foreclosure.
These are the questions most commonly asked by homeowners struggling with foreclosure:
- What’s the foreclosure process in Florida?
- How much time does the FL foreclosure process take?
- How long before they evict someone after a foreclosure?
- Can I stop a Foreclosure in Florida?
- Is FL a foreclosure redemption state?
Generally, a Florida foreclosure can be avoided if you know what you’re doing. In this post we’ll be discussing the foreclosure process in Florida and what you can do to stop foreclosure.
Foreclosure is a legal process where the mortgage lender of the home takes action to repossess the home or sell it at a public auction to the highest bidder. Once the foreclosure has been complete, the new owner or the bank has the right to evict anyone living there.
Florida Judicial Foreclosure
That’s a fancy way of saying the courts decide the case. A Florida foreclosure must go through the courts and abide by timelines issued by the judge assigned to the case.
FL Lien Theory
In Florida, you own your property with a mortgage note. The deed is in your name and so is the debt attached to the home.
When the bank gave you a mortgage, they also filed a lien on the home. This is a recorded official document outlining the amount owed and your promise to pay them back. On the lien, the buyer is named as the owner of the deed and title to the property.
In some other states, the bank owns the home until the mortgage is paid in full.
Florida Foreclosure Law
If you find yourself struggling with foreclosure then knowledge is your best friend. Understanding the foreclosure laws in Florida will help you to make good decisions moving forward.
If you already have a foreclosure sale date you need to hire a foreclosure attorney to try and delay the proceedings.
Do you need help selling a foreclosure property in Florida?
The Phases of Florida Foreclosure
- Foreclosure lawsuit
- After the foreclosure sale
The thought of losing your home can be terrifying but it’s far worse if you don’t know how long it takes. Knowing how much time you have will help you when making a plan of action to stop the foreclosure.
Pre-Foreclosure: The amount of time from missing a mortgage payment until the bank files a lawsuit. Pre-foreclosure begins as soon as you miss your first mortgage payment. A Florida pre-foreclosure lasts anywhere from 3 to 6 months depending on the lender and the situation. You can extend or even stall pre-foreclosure by working with your lender on alternatives to foreclosure.
Pre-foreclosure is the perfect time to explore your options. If your home has no equity you may be a good candidate for a short sale. If you want to keep your home, you can ask about a loan modification. Another option if the home has equity is selling to a cash buyer.
What Happens When You Start Missing Payments?
Most lenders in Florida allow a 15-day grace period after missing a mortgage payment. Once the grace period is over, you will probably incur a late fee. At 30 days past due the bank may report you to the credit bureaus. After 30 days your lender will start reaching out more frequently. This is a good opportunity, to be honest with your lender and start a dialogue about your situation.
By the time you are 45 days late on your payment, you will be referred to the loss mitigation dept where a rep will be assigned to you.
A foreclosure lawsuit in Florida begins with the bank filing a Summons, Complaint, and finally a Lis Pendens. A “Summons” is a legal notice of the foreclosure lawsuit and it orders you to appear before a judge at a certain time and day. You will also have 20 days to file your response.
The complaint puts in motion the legal and factual basis for the lawsuit. A foreclosure complaint describes the terms of the mortgage or promissory note, property being foreclosed on, the amount due, etc. Complaints will also specify the relief sought after by the lender.
The Lis Pendens
A “Lis Pendens” is a written notice that states the foreclosure lawsuit has been filed against your home. The purpose of this is to inform the public there is a lawsuit against the property. Banks are required to file and record the Lis Pendens with the local county in FL.
A Lis Pendens can be several pages long and must include: names of the parties involved, filing date of the lawsuit, property description, and relief being sought.
The Service of Summons and Complaint
Once the Lis Pendens has been filed, the bank must “serve” you with the complaint, summons, and Lis Pendens regarding the foreclosure lawsuit. This is usually done by mail or by a process server.
Responding to the Summons
Once you’ve received the summons and complaint, you have 20 days to file a response. You must file a response before the 20 days run out. If not, the judge may decide to fast-track the foreclosure sale date. For example: “I’m currently working with my lender to do a short sale on my home, please allow me some time to do this so I can avoid foreclosure”
Once you’ve filed your answer, the judge may just put it to the bottom of his stack or set a date for a “Preliminary Hearing”.
The Preliminary Hearing
If by this time you still haven’t found an alternative to foreclosure, the process continues with a preliminary hearing. In the preliminary hearing, you tell the court what your plan is to avoid the foreclosure and the judge decides what happens next. If the judge sees that you’re being proactive by pursuing an alternative to foreclosure with the bank, you may be granted more time.
If you haven’t taken any action to correct the situation then the judge will probably set a foreclosure sale date.
Summary Judgment Hearing
In this hearing, the lender will present their case to the judge to rule in their favor. This is based on only the non-disputed facts so if something is wrong, this is the time to speak up. You have the chance to offer up any proof of why the foreclosure shouldn’t move forward.
Your lender might include the financial damages including mortgage balance and interest as part of a summary judgment motion.
Foreclosure Sale Date
The county court may set a foreclosure sale date after the entry of the summary judgment. At that time, it will be sold to the highest bidder or required by the bank to list as an REO property. Whoever the new owner is at this point will have the option to evict anyone living in the home.
Alternatives to Florida Foreclosure
If you want to sell the property to avoid foreclosure and walk away then doing a short sale may be the way to go. A short sale is when the bank allows you to sell the home for what it’s worth and not what it owes. So if you owe more than the home is worth, requesting a short sale is a great option.
Applying for a Short Sale
If you decide on a short sale, you’ll need to submit a complete short sale package. The short sale package generally consists of your financial information like pay stubs and bank statements, proof of hardship, letter explaining your situation. The lender will usually request 30 days for a short sale review.
If you wish to pursue a short sale on your property then you need a short sale agent. This is a real estate agent that specializes in short sales. A short sale is a much more complex process than a normal listing which is why most agents shy away from short sales. An experienced short-sale agent can step into your shoes and deal with the lender on your behalf.
Hiring the wrong Realtor can mean the difference between selling your house and being foreclosed on.
A short sale agent can also help you with:
- Advising you on most current loss mitigation programs available
- Completing and submitting the short sale package properly
- Provide you with updates on your short sale review
- Keep you up-to-date on court hearings and timelines
A loan modification is when your lender adjusts the terms of your mortgage by reducing the payment making it more affordable to you. If you want to stay in your home and can afford a slightly lower payment, then this may be a good 1st option.
Deed-in-Lieu of Foreclosure
The transferring of ownership back to the bank instead of a foreclosure.
Filing For Bankruptcy
Courts issue an “automatic stay” on creditors (consult with your local bankruptcy attorney)