Florida’s foreclosure process is a legal procedure through which a lender tries to recover the balance of a mortgage loan that has defaulted from a borrower. The lender is able to sell the property to pay off the outstanding debt through this process
A Summary of the Foreclosure Process
The process can be easily understood in 6 simple steps:
1) Default: A homeowner defaults on their mortgage when they fail to make the monthly payments agreed upon in the mortgage contract.
2) Demand letter: If the homeowner is in default, the lender may send a demand letter requesting the full payment. The letter may also include information about the homeowner’s right to fix the default by paying the expected amount within a certain timeframe.
3) Notice of default: If the homeowner does not fix the default within the timeframe stated in the demand letter, the lender may file a
notice of default with the county clerk. This is a public record and may be published in a local newspaper.
4) Notice of sale: If the homeowner does not fix the default or reach a settlement with the lender, the lender may continue with the foreclosure process by filing a notice of sale with the county clerk. This notice must also be published in a local newspaper. The notice will state the date, time, and location of the public auction where the property will be sold to the highest bidder.
5) Foreclosure sale: The property is sold at the public auction to the highest bidder. If the property does not sell, it becomes the property of the lender.6) Eviction: If the homeowner is still living in the property after the foreclosure sale, the new owner may file an eviction lawsuit to have the homeowner removed from the property by the authorities.
Timeline of foreclosure in Florida
In Florida, foreclosures are handled by the courts through a legal process called judicial foreclosure. This means that the lender must file a lawsuit against the borrower in order to foreclose on the property.
The foreclosure process in Florida can take anywhere from 180 to 200 days, but it may be delayed if the borrower contests the foreclosure or files for bankruptcy.
The foreclosure process begins when the lender sends a “Notice of Default” to the borrower, indicating that the borrower has fallen behind on their mortgage payments and that the lender is starting the foreclosure process.
This usually happens after the borrower has missed at least three payments.
Next, the lender will file a “Lis Pendens,” or “suit pending,” which is a lawsuit against the borrower for defaulting on their mortgage and demanding that they pay the full balance of the mortgage.
The Clerk of Court will record the Lis Pendens and the borrower will be served with a copy of the lawsuit.
The borrower will then have 20 days to file an answer with the court, which allows them to present their side of the case at a hearing in front of a judge. If the borrower files an answer, it may also delay the foreclosure process, but this is not guaranteed.
After the borrower has had the chance to file an answer, the lender’s attorney will file a motion with the court to request a summary judgment. This will trigger an additional 20-day period for the borrower to file an answer before a hearing can be held.
If the borrower is unable to contest the foreclosure or work out a loan modification or short sale, the judge will set a date for the foreclosure sale, which is typically 30 to 45 days after the hearing.
On this date, the property will be sold at auction to the highest bidder. The sale may be postponed at the request of the lender or the lender’s attorney.
After the sale, there is a 10-day waiting period (or longer if specified in the judgment) before the Clerk issues a Certificate of Title to the new owner.
During this time, the borrower or any junior lien holders may pay off the borrower’s debt and stop the foreclosure sale, a process known as the Right of Redemption. If necessary, the Sheriff may then evict the previous owner and remove their possessions.
If the sale price does not cover the balance due on the loan plus costs, the lender may sue the borrower for a deficiency judgment to recover the remaining amount.
How long can you stay in a foreclosed property in Florida?
Here are the usual foreclosure processes waiting times in chronological order:
Filing and Serving Lawsuit (15 Days)
The bank will file a lawsuit and receive a case number. They will then serve the homeowner with the documents. It may be necessary to try and serve the homeowner on multiple occasions if they are not home. If the bank is unable to serve the homeowner, they may have to use service by publication.
Response (20 Days)
The homeowner must admit or deny the allegations made in the complaint. They may also file affirmative defenses, which allow them to address the allegations and provide reasons for denying them. In response to these defenses, the bank may file a motion to strike.
Discovery (45 to 90 Days)
Either the bank or the homeowner can serve discovery on the other party to try and strengthen their position. The other party has 30 days to respond. If they fail to respond, a motion to compel can be filed.
Types of discovery include:
- Interrogatories: Questions sent to the opposing party that must be answered under oath.
- Request for Production: Documents requested by the opposing party that must be produced.
- Request for Admissions: Statements that the opposing party must admit or deny.
It is generally advisable for homeowners to have a defense attorney handle their case, as they may not be familiar with the process.
Summary Judgment (60-90 Days)
If the bank believes they can obtain a final judgment, they will file a motion for summary judgment. This means that there are no issues of fact or law that the homeowner can allege that would prevent a judgment. At the hearing, the bank must produce the note and mortgage and disprove the homeowner’s defenses. If the bank is successful, the court will set a sale date within 35 to 120 days.
A summary judgment hearing can be the final phase before a foreclosure sale.
Sale Date (35 to 120 Days from Final Judgment)
On the sale date, individuals can bid on the property. The highest bidder will become the new owner.
The length of time before the sale can be increased if the homeowner or bank files a motion to cancel the sale and the court agrees. However, homeowners should not rely on this motion being granted.
Certificate of Title (10 Days)
If there are no objections to the sale within 10 days of the filing of the certificate of sale, the clerk will issue a certificate of title. This will allow the successful bidder to become the new owner and take the necessary steps to secure possession of the property.
Seek help from a housing counselor
If you are a homeowner facing foreclosure, seeking the help of a housing counselor can be a useful step in finding a solution. These trained professionals can provide you with advice and assistance on various housing-related issues, including understanding the foreclosure process.
By working with a housing counselor, you can better understand your rights and options, and develop a plan to avoid foreclosure. They can also help negotiate with your lender and advocate on your behalf to find a solution that is suitable for you.
When meeting with a housing counselor, it is important to be honest about your financial situation and provide all necessary documentation. This will enable the counselor to understand your specific situation and create a customized plan.
It is essential to remember that each situation is unique, and what may work for one homeowner may not be effective for another. Therefore, if you are facing foreclosure, it is important to consider all options and work with a qualified professional to find the best solution for your individual case.