The Florida Foreclosure Process
Having a home go into foreclosure is never an easy process Florida homeowners can find themselves facing foreclosure due to a number of reasons. The most common are falling behind on their mortgage payments or failing to pay their property tax. Foreclosure can have serious consequences.
Here’s what Floridians need to know about the foreclosure process in their state and what they can do to avoid losing their home.
Homeowner Rights During Florida Foreclosures
If you are facing foreclosure in Florida, you have the right to defend yourself against the court action. You also have the right to discovery, which means the right to ask for the documents from your lender regarding your foreclosure. Remember, the proof of burden lies with the lender, and lenders often do make mistakes in filing foreclosure proceedings. If you find a violation, you can file a counterclaim, which will be tried in a jury trial.
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The Florida Foreclosure Procedure in a Nutshell
Notice of Default
Florida is a judicial foreclosure state, which means that foreclosures are handled in the courts. Should a homeowner fall into foreclosure, the lender will notify the borrower with a Notice of Default.
Next, the lender will go to the Circuit Court to start the judicial foreclosure proceedings by filing a lis pendens. Lis pendens is a public notification that the property is in foreclosure.
If the borrower does not stop the process, the court will issue a final judgment of foreclosure. Then the property is sold to the highest bidder, often the lender, in a publicly noticed sale.
Vacate the Property
If the home is occupied by the owner that has gone into default, the owner must leave as soon as the certificate of title is official. If the home is occupied by a tenant, not its owner, then the tenant has 30 days after receipt of the purchaser’s 30-day termination letter.
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Florida Foreclosure Facts
Once the clerk files the certificate of sale, a home’s owner has no way to get a foreclosed home back.
Florida’s right of redemption laws require the home’s owner to make this payment before the Circuit Court Clerk files a certificate of sale.
Florida foreclosure law allows for deficiency judgments; requiring homeowners to pay the balance between the home sale price and what is owed.
Property tax delinquency can lead to foreclosure your taxes are not paid on time, your home can be sold at a Tax Certificate Sale.
Your credit score will suffer. High credit ratings will drop by as much as 140 points. Lower credit ratings will see a drop between 85 and 105.
On average, a foreclosure will stay on your credit report for seven years. This can make it harder to get a new mortgage or rental agreement.
Alternatives to Foreclosure in Florida
Sometimes lenders will work with distressed borrowers to create a loss mitigation agreement to avoid foreclosure. If the borrower can prove hardship, such as the loss of a job, the lender may allow a new agreement that lets the borrower come current on the mortgage and keep the home.
Selling the property as a short sale, which means selling for less than what is owed, avoids the delays of foreclosure and allows the home’s owners to relocate on their own terms, rather than facing forced eviction. This option can also help protect credit.
Bankruptcy immediately stops all foreclosure action. Depending on the type of bankruptcy the borrower is approved for, bankruptcy may stop the foreclosure altogether, or it may delay the proceedings for a time.
A Florida homeowner can ask their lender for assistance when facing foreclosure. If the lender agrees, loan modification changes the terms of the loan to make the monthly payment fit the borrower’s current monthly budget.
The easiest and most stress-free alternative to foreclosure is often to sell as is. This means selling your house without making any repairs or updates. It’s typically the fastest and most reasonable option.
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