Florida Laws and Procedures for Foreclosures
Understanding the procedures and laws of Florida foreclosures can be confusing due to the multiple steps and resulting outcomes throughout the process. Our West Palm Beach foreclosure attorneys are here to provide expert insight to help guide those who may be facing such circumstances.
Typically, Florida residents sign a promissory note and mortgage if they receive a loan for a residential property. The promissory note ensures that the borrower will fulfill the terms of the loan according to the terms, and the mortgage establishes a security interest in the property.
When a borrower misses a mortgage payment, there are a series of events that follow. Usually, there is a period of ten or fifteen days where no fees will be applied; however, after this grace period is over the lender will issue a late fee. For every monthly payment missed, there will be another subsequent fee. According to the federal mortgage servicing laws, if a payment is missed, the bank will contact the borrower by both phone and in writing during the pre-foreclosure process. Our West Palm Beach foreclosure attorneys help our clients skillfully handle these phone calls and negotiate loss mitigation options such as loan modifications, forbearance agreements, or an alternative payment plan. The servicer typically waits until 120 days past due before officially starting a foreclosure on the home.
If the lender decides to pursue foreclosure, a lawsuit must be filed with the state court—considering foreclosures are judicial in the state of Florida. To proceed with a foreclosure lawsuit, the lender must also file a complaint that will subsequently be served to the borrower, along with a legal document called a summons that allows them 20 days to submit an answer. If the lawsuit has not been responded to within that set timeframe, the lender then has the legal right to ask the court for a default judgment. If an answer is submitted, the possibility of a default judgment is eliminated, and there will typically be a summary judgment filed. The lender usually wins summary judgments and receives permission to proceed with a foreclosure, unless the defendant can provide legitimate proof that there is a valid reason why he/she is unable to make the mortgage payment. If the bank’s request for summary judgment is denied, the foreclosure case will go to trial.
If the judgment of foreclosure is granted, the bank and court will schedule the sale of the indebted property in approximately 35 days. Additionally, the notice of sale is required to be published in the newspaper for two weeks before the foreclosure auction. The foreclosed home will be sold to the highest bidder, which is typically the lender because it is in the bank’s best interest to buy back their own property. The clerk will grant a certificate of sale once the auction is complete and the home is sold. The borrower can file an objection to the amount that the home was sold for up to ten days after the certificate of sale is issued. If the transaction is deemed legitimate by the court and the objection is overridden, a certificate of title and sale will be granted to the purchaser.
Starting the day that the certificate of title has been provided, the lender has the opportunity to obtain a deficiency judgment for up to one year. The deficiency amount is decided upon by the court, and cannot be more than the difference between the judgment amount and the fair market value of the home when dealing with owner-occupied residential properties. After the certificate of title is granted, the eviction process begins with a writ of possession which gives the person occupying the house 24 hours to vacate. If the owner does not vacate the property once the house is sold, the new purchaser of the home can either offer a cash-for-keys deal or take further steps to evict the previous homeowner through the sheriff. A cash-for-keys agreement is when the new owner offers to pay an amount of money contingent upon the previous owner vacating the house by a specific date and leaving the home in an acceptable condition.
The foreclosure process in Florida has many steps that can result in a multitude of outcomes and further actions, which can become overwhelming quickly. If you or someone you know is facing foreclosure, our West Palm Beach bankruptcy attorneys provide valuable insight and knowledge to help prepare a strong foreclosure defense. To learn more, please schedule a consultation at Kelley Fulton Kaplan & Eller today.