Mortgage foreclosures are never fun, but they happen more than you might think. When someone is facing a potential foreclosure, it can feel overwhelming. That is why it is important to have a solid understanding of the Florida foreclosure process.
Understanding the process can help you understand the implications of foreclosure and help guide you to finding the best way forward. It can also help reduce your anxiety when faced with a foreclosure.
Florida Foreclosure Step by Step
The overall foreclosure process in the state of Florida is approximately 30 – 90 days. However, that is only once the official foreclosure proceedings have begun. There are several months prior to that leading up to the official foreclosure process.
You may also want to consider contacting foreclosure defense attorneys if you suspect that you may have to pay a deficiency judgment (we cover that in Step 10).
If you are facing foreclosure, our following guide can help guide you through the process of foreclosure timeline from start to finish. That way you know what to expect and how to handle your next steps.
Steps Prior to Foreclosure Proceedings
Foreclosure does not just begin overnight. A Florida homeowner can expect the entire process from the first missed payment to the deficiency judgment to take several months. The following steps occur before the official foreclosure proceedings but are very much a part of the foreclosure process.
Step 1: Borrower Begins Missing Mortgage Payments
A missed mortgage payment is what kicks off the foreclosure process. Without a missed payment, there will be no foreclosure.
Once the first payment is missed, the property owners will likely receive a notice of that missed payment. There will also probably be late fees incurred as a result.
If payment is made, then the foreclosure process will not move further along. However, if the borrower does make another payment (due to financial hardship or some other reason) then a foreclosure action is likely to follow.
Step 2: Pre-Foreclosure Loss Mitigation Period
According to Florida law, the debtor must be delinquent on the loan for at least 120 days before a foreclosure lawsuit can be filed. During that time, the borrower should contact the mortgage lender to discuss potential loss mitigation strategies.
The homeowner may be able to secure a loan modification matching their ability to pay. Or, the debtor might be able to complete a short sale, where the home is sold for less money than the property value. Another option may be to be released from your debt by handing over the deed in lieu of foreclosure.
Step 3: Meeting with Foreclosure Defense Attorney
If the lender and debtor come to a foreclosure alternative, the foreclosure process can be stopped at any time. If the lender does not agree to a loan modification or short sale, or some other foreclosure remedy, the homeowner may potentially want to contact foreclosure defense lawyers for some legal advice. There may be legal options that the debtor is not aware of.
Official Foreclosure Proceedings Begin
After the120 day grace period, the mortgage servicer can officially begin the foreclosure process. The following step is what you can expect during this legal process.
Step 4: Lender Issue a Notice of Default
This step marks the official foreclosure process. The borrower will receive a notification that a civil complaint has been made against them. This is official documentation stating that the debtor defaults on a loan due to missed loan payments.
Step 5: Filing of the Summons and Complaint
The next step is when the Summons and Complaint is filed with a lis pendens. This signifies that litigation is pending. This is the formal start of the judicial foreclosure process, which is an official way to state that the action will be publicly recorded. In other words, the foreclosure goes on public notice. This complaint is usually delivered by hand by the Sheriff in the county where the homeowner lives.
Step 6: Debtor Answers
After the complaint is delivered, the debtor has 20 days to answer the complaint by filing it with the court clerk. At this time, the homeowner can raise a defense.
If the borrower does not answer the complaint, the process will proceed to the next step, which is a summary judgment. The debtor will not be able to plead their case. The borrower should answer the foreclosure complaint.
Step 7: Motion for Summary Judgement
In Step 7, the lender will most likely request a summary judgment motion. That way, the company can avoid a formal court process.
The judge may grant that if the borrower did not answer the complaint in time or the answer was deemed insufficient.
Then, both side can present their case during the summary judgment hearing. Once the judge hears both sides, they will make a judgment.
Step 8: Foreclosure Trial
If the motion for a summary judgment is denied, there will be a foreclosure trial. Both parties will argue their sides. Then a judge will issue a foreclosure ruling.
Step 9: Foreclosure Sale
If the judgment goes in favor of the mortgage lender, a foreclosure auction will occur. The property will be likely be scheduled to be sold at auction a few weeks later. After it sells to the highest bidder, the certificate of title will be transferred to the winning bidder. The original owner will then be evicted from the home.
Once the original owner is evicted, the new owner can move into the home.
Step 10: Deficiency Judgement
A deficiency judgment, sometimes called a default judgment, can potentially be sought by the mortgage company. The lender can seek a judgment for the dollar amount that was not covered by the sale of the real estate at the public auction. In other words, the borrower may still be responsible for the loan’s remaining balance after the home is sold at auction.
If you hire qualified foreclosure defense attorneys, you have a better chance at bringing the foreclosure case to an end without receiving a deficiency judgment against you.
How to Stop Foreclosure at the Last Minute
There are ways to stop foreclosure at the last minute, which you can read about here. Before it’s too late, you can also consider selling your house as-is to property investors. Companies that buy houses for cash can close in as little as 5 days. Sometimes your lender is happy to take even less than what you owe them if they can get their money fast.
If your house is in Southwest Florida, contact Tropic Coast Homes to learn more about this option.