How to Stop Foreclosure in Florida - Knowing the Laws and Procedures

How to Stop Foreclosure in Florida

Before the mortgage crises, rules governing providers and the process were comparatively few and favored the mortgage lender. This made foreclosure unfair for homeowners.

However, loan management and procedures are now regulated by stricter legislation. Additionally, the new rules protect debtors more.

In general, servicers are to offer debtors ways to reduce their losses, account for every stage of the Florida foreclosure process, and rigorously adhere to guidelines.

Florida is a judicial foreclosure state, permitting residents who use loans to buy homes to do so under the terms of a mortgage and promissory notes. These documents combine with the legal safeguards to provide certain rights to homeowners.

It is best to contact foreclosure lawyers to help you stop foreclosure or get a fair market value when it can't be prevented.

Your Rights in Florida Foreclosure Lawsuits

Foreclosure Lawsuits

You are granted the following rights in a Florida foreclosure lawsuit:

  • A breach of preforeclosure letter
  • The right to request loss mitigation
  • You should receive notification of the foreclosure and be allowed to contest it in court
  • Get your loan current to avert the sale
  • Extra protections as a member of the military
  • The right to repay the debt to stop a bank foreclosure
  • To file for bankruptcy
  • Obtain any surplus funds from a sale

If a Florida homeowner is behind on your mortgage payments, don't be surprised. Discover the details of each Florida foreclosure stage, from the first missed payment to the foreclosure auction. Once you are aware of the procedure, make the best of your predicament and, ideally, find a solution to keep your house, if not, at least go through it with minimum stress.

Understanding a Preforeclosure

Preforeclosure is the term used to describe the time between missing your payments and foreclosure. The servicer may impose various fees during this time, such as late fees and service charges, and is generally required to give you information on how to stop the foreclosure by sending you a "breach letter" and a preforeclosure homeowner notice.

Mortgage Payments - Florida Laws and Foreclosure Protection

Mortgage Payments

If the property is your primary residence, the mortgage company must contact you or make an attempt within 36 days after missing payment and again after another 36 days of delinquency. This is to discuss options such as a forbearance, loan modification, and repayment plan.

You should receive written information about potential loss mitigation options. They must also designate staff to assist you in finding a way to prevent foreclosure within 45 days after missing a payment.

What Is a Breach Letter?

A clause in Florida mortgages states that before the lender can advance the debt, they must first give you a breach letter or notice of loan default. You have an opportunity to correct the default and avert foreclosure after receiving the breach letter.

When Is the Beginning of a Foreclosure?

With a few exceptions, federal law generally prohibits the servicer from starting foreclosure procedures unless you are over 120 days behind on payments. Most homeowners will have plenty of time to submit an application for loss mitigation.

The Florida Judicial Foreclosure Process

Judicial foreclosure begins when a creditor files a lawsuit to request a court order authorizing a sale. The court typically gives you 20 days to submit an answer. If you don't answer the lawsuit, the lender will approach the court for a default judgment and use that to conduct a sale.

The case will pass through the court system if you decide to fight the complaint. Following this, the lender can seek a summary decision from the court. This request urges the court to rule in favor of the lender since there is no disagreement. A notice of the foreclosure sale must be published by the lender once a week for two weeks in a row and the second publication occurring at least five days before the auction.

What Happens in a Foreclosure Sale?

Unless otherwise specified by the court ruling, the foreclosure sale should occur 20 to 35 days following the judgment date. The auction portion should be public. A lender typically places a bid during the transaction.

When the creditor is the highest bidder at the foreclosure sale but offers an amount less than the debt, they can get a default judgment in some states, including Florida. The house becomes Real Estate Owned (REO) if their bid is the highest amount.

However, if a third-party bids the highest, and the sale is more than what you owe, you are entitled to those additional funds.

The court clerk is required by Florida law to swiftly file a certificate of sale after the foreclosure sale. This gives you 10 days to protest. The clerk certifies the sale and gives the buyer a certificate of title after 10 days, presuming there are no objections.

Steps to Stopping a Foreclosure in Florida

Steps to Stopping a Foreclosure

Reinstate the Loan

There is no legislative right to reinstate the loan before the sale under Florida law. However, many mortgages give the borrower the option to remedy the situation following acceleration and restart the loan.

Check the loan details to know if you have a right to reinstatement and when you can exercise it. The lender might also consent to permit a reinstating.

Redeem the Property

Redeeming the property is one method of preventing foreclosure. Before the foreclosure sale, you must pay off the entire loan balance to redeem.

Loan Modification

Here, the lender changes the conditions of the loan to lower your monthly payment. They make it current by increasing the debt balance with any past-due sums.

Filing for Bankruptcy

You can file for bankruptcy when facing foreclosure. It is the best Florida foreclosure defense strategy if a sale is due to happen within a day.

An "automatic stay" takes effect as soon as you apply for bankruptcy. The stay serves as a directive that temporarily prevents the creditor from foreclosing on your house or taking any other legal action to recoup its debt.

Contact a bankruptcy lawyer immediately to know your options when facing foreclosure in Florida.

Get Help Defending a Foreclosure Lawsuit

The best way to avoid foreclosure is unique to your situation. Contact a short sale expert in Florida if you face foreclosure to learn about your options.

If you are unable to afford a legal defense, a housing counselor can guide your next foreclosure action. These professionals usually have knowledge of stock and asset sales.

Speak with an experienced foreclosure attorney to determine the available legal defenses. Most law offices offer a free consultation on cases involving foreclosure. They also use it as an opportunity to build a solid attorney-client relationship before the defense.