Foreclosures in Florida and What Cobb Cole’s Attorneys Can Provide

Have you been served foreclosure papers on your Central Florida home? Have you fallen behind on your mortgage payments and are worried foreclosure is imminent? Consulting with one of the Real Estate Law attorneys at Cobb Cole can help guide you through a strategic foreclosure defense, helping you protect your investment and stay in the home you love.

Nearly 96,000 US properties had a foreclosure filing in the first quarter of 2023, up six percent from the prior quarter and 22 percent from the previous year. Florida ranked third in foreclosure rates, with 5,724. At the same time, the average days to complete a foreclosure rose to 950 days or nearly two-and-a-half years.

Understanding how foreclosure works, foreclosure laws, how the Florida foreclosure process works, and how a real estate law attorney can help you avoid foreclosure, including negotiating with your lender can be incredibly helpful and may put your mind at ease.

What is a Foreclosure?

Just like you face having your car repossessed if you default on your auto loan, you risk foreclosure if you fail to keep up with your mortgage payments. In both cases, a lender is within its legal rights to recover the outstanding debt by taking the assets used as collateral to secure the loan.

While every state has different regulations that govern the foreclosure process, one thing is sure. Foreclosure is much easier to resolve if you deal with the situation sooner rather than later.

Federal and Florida Laws Regarding Foreclosures

Under federal law, if you fall behind on your mortgage payments for more than 120 days, the lender can begin the foreclosure process to recover what is due. In Florida, foreclosures are “judicial,” which means the lender files a lawsuit to foreclose your home.

Foreclosed homeowners also can “redeem” the home after foreclosure before the later of:

• When the court clerk files the certificate of sale, typically within a day of the sale.
• The time specified in the foreclosure judgment. Courts generally require the property to be sold within 20 to 35 days of the final judgment data. Sales can be held more than 35 days from the judgment date with the plaintiff’s attorney’s consent.

After that, the foreclosure is considered final, and you cannot get your home back.

The Foreclosure Process in Florida

Understanding Florida’s foreclosure process helps you move forward and can reduce the anxiety and fear associated with the threat of losing your home. Here’s what the typical process looks like:

1. You miss mortgage payments. In theory, it only takes one missed payment to “begin” the foreclosure process, but if it’s a one-time occurrence, it’s unlikely the lender will take legal action. However, if your financial situation has changed and you expect to miss future payments, foreclosure could be in your future.
2. Pre-foreclosure loss mitigation. As mentioned, a foreclosure lawsuit cannot be filed against you until you’re delinquent on your mortgage for at least 120 days. Until then, the lender’s only option is to issue a breach letter and try to prevent potential loss through options like a loan modification or short sale. A real estate law attorney’s guidance at this point is recommended.
3. Consulting a real estate law firm. If no alternative resolution is reached, the process will keep moving forward. Meeting with an attorney specializing in foreclosure defense can help you explore options and ensure your interests are fully represented.
4. Notice of default. The foreclosure process officially begins when the lender issues a “notice of default” notifying you that a civil complaint has been filed against you.
5. Summons and complaints. The summons and complaint are served on you as the homeowner, and the action is publicly recorded.
6. Response to complaint. You have 20 days to provide an answer to the complaint and file it with the court clerk. Having your response drafted by a qualified foreclosure attorney ensures your side of the case is properly pleaded and all applicable defenses are raised.
7. Motion for summary judgment (MSJ). Most lenders want to avoid formal court proceedings. A motion for summary judgment requests the court to rule in the lender’s favor without a full trial because there are no material facts in dispute, i.e., you have not made your loan payments. As the borrower, you have the right to oppose the motion for reasons such as procedural errors, the mortgage’s validity, or another defense.
8. Trial. If the MSJ is denied, the foreclosure proceeds to trial, where both sides present their case and the foreclosure judge issues a ruling.
9. Foreclosure sale. If the court rules in the lender’s favor, a sale at auction of your home is scheduled. Once the property is sold, the title is issued to the new owner and you can be evicted. Florida has a minimum 10-day waiting period before the title is issued to the new owner.
10. Deficiency judgment. Florida lenders are entitled to seek a “deficiency judgment” for any outstanding amount not covered by your home’s sales price. This step is often avoided when you opt to work with a qualified real estate law attorney.

Fortunately, there are options available to homeowners facing foreclosure that can help them keep their home, including a short sale or loan modification.

Real Estate Law: How an Attorney Can Help During Foreclosure

Many people believe they must go through the foreclosure process on their own, without the help of a lawyer. However, working with a real estate law attorney, especially if you want to keep your home, might help you prevent foreclosure or bankruptcy.

If nothing else, hiring a foreclosure attorney helps you “know what you don’t know.” They can identify factors that support your case, such as a legal misstep by the mortgage company. And because they’ve been through it many times, they know the foreclosure process inside and out. For instance, if you’re served with a summons and complaint from your lender, you have multiple immediate questions to deal with, including:

• Should I file an answer or a motion to dismiss?
• How do I file one or the other with the court?
• Who do I serve?

While it’s certainly possible to learn the answers on your own, it can take hours or days. A real estate law attorney can answer these questions much more quickly. Plus, navigating the foreclosure process is legally complex, and having legal representation can be the only way to ensure your rights and interests are appropriately defended.

A foreclosure attorney has years of expertise handling negotiations with lenders, a skill that’s particularly helpful if you want to pursue loss mitigation and work out an arrangement that avoids the process entirely. Lastly, hiring a real estate lawyer can help slow down the foreclosure process, giving you time to pursue other options like:

1. A loan modification is where the lender agrees to modify the loan’s terms to make payments more manageable.
2. A short sale is when you sell the property for less than the outstanding loan amount, and the lender forgives the remaining debt.
3. A deed in lieu of foreclosure where you transfer ownership of the property to the lender to satisfy the outstanding mortgage. Under Florida law, there are strict requirements regarding the loan’s existing balance, grace period, days delinquent, and a waiting period. This option also comes with potential tax consequences, which a real estate law attorney can explain to you.

Along with these foreclosure alternatives, a skilled Florida foreclosure attorney can work with you to explore potential defenses such as:

• Procedural errors. Any mistake made by the lender in the foreclosure process can be grounds for requesting a stop to the proceedings.
• Faulty lender actions. Common errors include initiating foreclosure during a loan modification process, miscalculating the outstanding loan balance, mishandling payments, or adding unauthorized fees.
• Solutions for service members. The federal Servicemember Civil Relief Act (SCRA) provides additional protection against foreclosure for active duty service members.
• Lack of standing. A lender seeking foreclosure must prove its legal right to collect on the loan. If it can’t produce the proper documentation, it lacks “standing” to initiate foreclosure.
• Statute of limitations. All civil lawsuits are subject to statutes of limitations. In Florida, mortgage holders or lenders have five years from the date of default to initiate foreclosure proceedings.

If you’re facing foreclosure, speaking with an experienced Central Florida real estate law attorney could help you avoid foreclosure and ensure a better outcome.

Consequences of Foreclosure and How to Mitigate Your Risk

Losing your home to foreclosure has a significant number of disadvantages, including giving up the home you love. Financial consequences can last for years, with three of the worst being:

1. Credit impact. Missing monthly payments can affect your credit score. But nothing compares to the drop your score experiences after foreclosure. Some people see a decrease of 200 points or more. Weaker credit makes it more difficult to obtain future loans, including for another home. Filing a Chapter 13 bankruptcy can allow you to catch up on mortgage payments and stay in your home. Over time, you can also slowly rebuild your credit and get back on solid financial ground.
2. You might still owe the bank money. While foreclosure doesn’t automatically create a deficiency judgment against you, the lender can file another complaint to recover the monies it didn’t receive as part of the foreclosure judgment. For instance, if your home is valued at $250,000, but you still owe $300,000, the lender can seek a deficiency judgment for the additional $50,000.
3. Wage garnishment or bank levy. A lender might pursue other options to get you to pay the remaining loan balance. A foreclosure defense attorney can help you avoid these and other judgments by reaching an agreement with the lender. In any event, the discharged amount will be subject to income tax.

Another impact of foreclosure that people don’t often think about is the emotional toll it takes. The foreclosure process is long and exhausting, adding to the stress you were likely experiencing before the foreclosure began. You might feel shame over losing your home, even if the circumstances leading up to it were out of your control. The truth is foreclosure can happen to anyone. A real estate law attorney can provide compassionate understanding and guidance throughout this challenging process, helping you explore available options and work toward a resolution that minimizes a foreclosure’s adverse personal and financial consequences.

When Should You Hire a Florida Real Estate Law Firm for Foreclosure Help?

Facing a possible foreclosure on your Central Florida home can be an overwhelming experience. If you’re struggling to keep up with your mortgage payments or if you’ve been served with a foreclosure complaint, a real estate law attorney can help. They understand the complex legal issues involved in a foreclosure, and their support can alleviate some of the mental and emotional challenges you have, enabling you to make more informed decisions with confidence and clarity despite the difficulties you face.

The foreclosure attorneys at Cobb Cole have the knowledge and expertise to help you understand the foreclosure legal process and can negotiate with lenders on your behalf. They will also work with you to explore available alternatives to foreclosure, providing personalized advice and representation that addresses your unique circumstances. Our skilled team has decades of experience in real estate law, including mortgage loans and loan modifications. We’re here to provide the defense you need in your foreclosure proceeding, helping you obtain the best possible results.

Contact us online or call 386-255-8171 to learn more.