Understanding the Foreclosure Process
Getting served with a foreclosure lawsuit or falling behind on your home payments is one of the most unsettling things we see clients going through. If you are in either situation, you probably have lots of questions about the foreclosure process, how a lawyer might be able to help, and whether you can even afford one. To help you understand how foreclosures usually proceed in Florida, we have assembled a basic timeline that shows key dates and events that can typically take place.
If you or someone you know is facing foreclosure, the Florida foreclosure defense attorneys at the Law Offices of Evan M. Rosen, can help. Contact us for a consultation to find out more details about the foreclosure process and the defenses that might be available at 855-55-ROSEN or by filling out our online form.
A borrower is in “default” when he or she stops making payments to the lender as required by the terms of the note and mortgage. If payments are not brought current or an adequate settlement is not quickly reached, a lawsuit will almost certainly be filed.
Plaintiffs in foreclosure actions are held to the same burden of proof as any plaintiff in a civil matter — they must prove each element of their case by a preponderance of the evidence. Preponderance means the greater weight of the evidence. A foreclosure plaintiff must establish that they are the correct party to bring the action, that they are entitled to receive payments under the note and/or that they are entitled to foreclose. This concept is known as “standing,” which requires the plaintiff to plead in the complaint — and prove — how they are entitled to foreclose. There are a few ways a bank can do this. Each with their own unique issues and challenges.
Plaintiffs in the foreclosure lawsuits are often a bank, servicer, investor, trust or government sponsored entity ("GSE"), like Fannie Mae or Freddie Mac. In almost every case, this party is not the original lender listed on the closing documents.
In addition to standing, a foreclosing entity must prove breach of the loan agreement, that it complied with all contractual and statutory "conditions precedent," and it must prove the amount of damages. Because Florida is a “judicial foreclosure” state, a court must intervene in order for a plaintiff to foreclose on a property. Some other “non-judicial” states do not require a court’s involvement for a lender to take back a mortgaged property where the borrower has defaulted.
It is also extremely important to know that Florida is also considered a “right of recourse” state. This means that a lender has the right to go after the borrower for recourse or the amount of the loan that was not satisfied by the foreclosure auction. In other words, if you owe $100,000 on a property that you lose in foreclosure and the property is only worth $75,000 at the time of the foreclosure sale, the foreclosing party has a right to pursue you for the $25,000 deficiency. This can either be pursued as part of the foreclosure action, as it is typically done, or a bank can file a separate lawsuit. Deficiency judgments can be successfully negotiated away, litigated, or discharged in bankruptcy.
The timelines below set out the relevant periods in a typical pre-foreclosure and foreclosure process in Florida.
- Day 1: Payment is due but no payment is made.
- Day 7-10: Lender/mortgage servicer calls borrower.
- Day 16: Late charges begin to accrue.
- Day 20-25: Lender/mortgage servicer calls and writes borrower.
- Day 30: Default reported to credit bureaus and lender sends second letter.
- Day 40: Lender/mortgage servicer sends letter with payment options.
- Day 60: Lender/mortgage servicer sends demand letter or “acceleration notice”; credit bureaus update their reports.
- Day 90: Lender/mortgage servicer sends file to attorney; credit bureaus update their reports.
- Day 90+: Any time after 90 days, the entity claiming their entitlement to foreclose will typically file suit.
- Day 1: Complaint and lis pendens are filed. Those documents, along with a "summons," are served on all defendants. This includes all borrowers and the property owner.
- Day 20: A responsive pleading is due; with no responsive pleading filed, plaintiff moves for default judgment. (With competent legal counsel, there can be a number of legitimate issues raised through motions, hearings and discovery requests that would extend this time period greatly.)
- Day 45-60 (If not represented by competent counsel): Court schedules hearing for default judgment and enters final judgment of foreclosure at the hearing. The pertinent statute requires a court to order the sale of the property on a specified day within 20-35 days of judgment. But, sales can still lawfully take place later than 35 days and are sometimes set many months after judgment is "rendered."
- Day 80-95 (If not represented by competent counsel): Notice of sale published once a week for two consecutive weeks in a local publication, with last posting at least five days prior to sale. The auction is completed and the winning bidder applies five percent deposit from funds advanced electronically prior to sale and then pays the rest by noon the following day. Dade, Broward and Palm Beach counties conduct their auctions online. Certificate of sale is filed "promptly" after sale, and right of redemption ends when certificate of sale is filed.
- Day 105 (If not represented by competent counsel): At least ten days after filing certificate of sale, certificate of title is issued. Title vests, and no further action is necessary unless property is still occupied.
- Day 106 -119 (If not represented by competent counsel): If property is still occupied 1-14 days after certificate of title issues, sheriff issues notice to vacate. This commands the occupants of the property to vacate within 24 hours.
- Day 119 – 140 (If not represented by competent counsel): Sheriff vacates the property and, if necessary, forcibly removes all occupants and personal property.
However, with competent counsel, this process can take many years, if the bank is, in fact, ever able to foreclose. We have helped clients obtain a "free house" and have helped structured many different types of deals to keep clients in their homes indefinitely.
The information above is intended to be a brief overview to help you understand the basics of how the foreclosure process works.
To find out more about foreclosures or to inquire about how our Florida foreclosure defense attorneys can help, contact us today for a consultation at 855-55-ROSEN or by filling out our online form.
Let the lawyers and staff of the Law Offices of Evan M. Rosen serve you!