Understanding Foreclosure in Florida
A foreclosure occurs when the borrower of a mortgage loan is unable to meet the obligations he agreed to in the mortgage contract. When this happens, the lending agent has the right to seize the property and sell it at auction to the highest bidder. In Florida, this process takes 180 to 200 days to complete.
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Theory of Ownership
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Florida's foreclosure regulations are shaped by the lien theory of property ownership. This theory holds property that has been secured with a mortgage is collateral for that loan. However, the borrower owns the property unless the loan defaults and foreclosure proceedings are completed. The mortgage places a lien on the property until the loan is paid in full, but the deed remains with the borrower.
Judicial Foreclosure
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Florida only recognizes the judicial foreclosure process. This method requires the lending agent to file a lawsuit against the borrower for any delinquent amount. The court will generally set a date whereby the borrower must make any past due payments. If the deadline is not met, the home will be auctioned to the highest bidder. The court order will establish any details regarding the foreclosure, including when the borrower is notified, date and location of the auction, or any advertising requirements.
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Deficiency
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A deficiency occurs when the home is sold at auction for less than the balance due on the loan. When this occurs, in Florida, the lending agent may file a suit against the borrower for payment of this deficient amount.
Final Chance
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The borrower has one final chance, according to Florida law, to keep his property, even after the foreclosure sale is complete. This is accomplished by paying the full balance of the loan, plus any costs associated with the foreclosure. This right of redemption must be exercised before the court confirms the sale, which typically takes 10 days to complete.
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