Florida Foreclosure Rights of Owners
Although Florida does not offer borrowers much in the way of protection from foreclosure or related judgments, and courts have known to be brutal in their hasty disposition of foreclosure hearings, Florida does allow every borrower the right to a court hearing. This is the most significant right of owners in foreclosure in the sunshine state.
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The Promissory Note
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A foreclosure is allowed because the borrower signed a promissory note to make monthly installment payments on a loan. The note generally explains when a loan goes into default and sometimes outlines the process a lender must take before filing for a foreclosure in court. There may be language in the note that protects the borrower as well. If you miss a mortgage payment, read your promissory note. If the lender has violated any provisions of the note, write them a letter citing the language in the note and, if the lender files a foreclosure complaint, you will be able to use the note as evidence in your response. During the pre-foreclosure time period, and throughout the foreclosure process, a property owner can request alternatives such as loan modifications, short sale and deed-in-lieu, the latter being a process in which you simply deed the property to the bank. The lender is not obligated by federal, state or local law to agree to any alternative.
The Judicial Process
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The foreclosure process in Florida is driven by state law. It requires the lender to file a complaint in the county in which the property is located and record what is known as a "lis pendens," which means "lawsuit pending" in Latin. The borrower has 20 days to respond after being served the complaint. If he does not respond, the lender has the right to attempt to get a judgment without a hearing. If he responds, he is guaranteed a hearing in court. If the court approved the foreclosure, it issues a judgment, and the court clerk proceeds to notice the property for sale at an auction.
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The Hearing
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The borrower does not have to respond to the complaint and does not have to show up in court, whether he responds or not. However, if you want an opportunity to challenge the foreclosure, make a request for a loan modification or other alternative on the record, or merely to delay the foreclosure, your best and probably last opportunity is at the hearing. Temper you expectations. According to "The Wall Street Journal," because of a huge backlog of foreclosures flooding Florida courts, judges have been known to dispense hearings in intervals under one minute. You may have little time to make your case or request.
Protecting Other Assets
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Florida is a deficiency judgment state. That is, state law permits the lender to go after the borrower for the balance of the unpaid loan not recovered through the foreclosure sale. He has five additional years after the foreclosure to file for this judgment in court. While bankruptcy is not generally a successful method to save a home that is worth less than its mortgage, it can be when it comes to protecting other assets from deficiency judgments. There are numerous types of bankruptcy from which to choose, depending on your specific goals in protecting assets from a post-foreclosure deficiency judgment.
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References
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