Here we, KALIS KLEIMAN & WOLFE, P.A., provide written and audio answers to frequently asked foreclosure questions. For Attorney M. Scott Kleiman’s audio reply, click on the play arrow.
(The reader should not consider this information as specific. Anyone viewing this website should obtain specific advise pertaining to his/her particular situation and all cases.)Foreclosure:
- What is Foreclosure?
- What is a Lien?
- What is a Short Sale?
- What are some of the foreclosure steps?
- How long does it take to foreclose on a property in Florida?
- Can the bank just come and kick me out of my house?
- Once the foreclosure process starts is there anything I can do to stop it?
- Do I have to move out of my house during the foreclosure process?
- What happens at the actual foreclosure sale?
- Will anyone come into my house during the foreclosure sale?
- Can I sell the property and get my money out?
- What is a Deed in Lieu of Foreclosure?
- Do I need to continue living in my home to qualify for mortgage assistance or a Loan Modification?
- If the foreclosed property is sold at an auction for less than the total owed, can the lender collect the difference?
- What is an Underwater Mortgage?
When a homeowner defaults by failing to make payments on their mortgage, the bank or financial institution that holds the mortgage note may foreclosure on the property. The lender begins the process by filing records with the court. Foreclosure gives the legal ownership of a property to the bank or lending institute to try and recoup its investment.
A lien, which is public record, is alegal claim on real property, which basically protects a creditor to secure payment for any debt or other obligation. If the debt is not repaid the creditor may be able to seize the asset. In this case, the lender or the lien holder can foreclose its claim on the property and force a public sale to pay the debt.
A short sale is where a bank or lender will agree to accept less than the full amount of the mortgage. This allows individuals to sell the house to an investor or other buyer for a good price, while the lender recovers the bulk of the amount due without having to pursue foreclosure proceedings. Not all lenders will accept short sales or discounted payoffs, especially if it would make more financial sense to foreclose, and not all sellers or properties qualify for short sales.
In Florida, the pre-foreclosure timeline is as follows:
- Notice of Default. Sent by lender to you if a mortgage is in default. This is the first step towards beginning the foreclosure process.
- Disputing the Validity of the Debt. As the Borrower, you have the opportunity to dispute the validity of the debt and/or the default, both of which should be done in writing to the lender at the earliest possible time.
- Opportunity to Cure. Pursuant to Florida law, you have the right to reinstate your Mortgage by tendering all of the arrearages due on the Mortgage prior to the Lender exercising its option to accelerate.
- Option to Accelerate. The terms of the mortgage usually include the lender’s option to “accelerate” the mortgage upon a claimed default. This means that upon written notice to you, the lender can require you to pay the entire balance of the mortgage, not just the arrearages, in order to avoid the foreclosure. In most cases, your right to pay the arrearages and reinstate your mortgage terminates upon acceleration of the Mortgage. If the lender does not officially “accelerate” the mortgage by formal notice to you, the filing of the “Lis Pendens” may be interpreted by the Courts as a de facto notice of acceleration.
Depending on the court schedule, it usually takes approximately 180-200 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy. It will also depend a great deal on your mortgage holder and how aggressively they pursue your case
No. Only an order of the court can force you to leave your home. Ultimately you may be evicted but there are procedures within the court system that the mortgage holder must follow first for the foreclosure and then another set for the eviction.
Yes. If working from your first late payment there are at least 10 or 20 different ways to resolve the situation. The longer you wait, however, the more some of these options will become unavailable.
No. You do not have to move out of your house during the foreclosure process. Until the foreclosure process is complete, you are the owner of your home. Only after the process is complete and a Certificate of Title is issued to a new owner, would you possible have to move out. The new owner may allow you to stay under a lease or other provisions, but during the process it is your home and you can stay there.
In Florida there are now two types of foreclosure sales. There’s traditional type where you property is literally sold on the courthouse steps, where a clerk of court announces the sale and takes bids from people standing there interested in bidding on the property, including your lender. The other type of sale is now an electronic or on-line sale, which runs pretty much the same way as Ebay does. Where interested bidders will go in and input the information that they want to have considered for the in sale of property, including their maximum bid. It runs through an automatic process. Whoever has the highest bid will end up getting the property. If there is a bid in excess in the judgment against you, then that excess money will go to other lean holders and if there is anything left after paying them, it will back to you.
No one should come into your house prior to a foreclosure sale unless you give them permission to enter your house. During the entire foreclosure process you own the property. Only after the property is sold at a foreclosure sale, does someone else have ownership and the right to enter. The banks can not send any representatives in unless you give permission to enter your home.
You can always sell your property even in a foreclosure context. Whether you get your money out is the question of whether there is equity in the property or whether the sales price of the property is greater than the amount you own on the mortgage. And if it is, and you sell the property prior to a foreclosures sale of the home, then you will be able to pull the equity out. If you have no equity in the property, the amount you are selling is less than the amount, then you have a short sales context, and you will realize no money at the time of the sale of the property.
A Deed in Lieu of Foreclosure is a deed given by a property owner to the mortgage holder. It’s given instead of going through a foreclosure process or something along those lines and helps avoid going through litigation. It is usually an agreement by which a title is transferred to the mortgage holder and usually the borrower / property owner is relived of any payment obligation under the note.
At present, the answer to that is generally yes under most of the government authorize programs. One of the first questions that are asked by the lender is whether the property is residential and owner occupied. If it is not, under most of the government backed programs, and you are not living in the home, you will not qualify for a modification. That does not however preclude you from getting a modification from your lender from some internal bank program that might be out there. At present also, many are not willing to grant modifications as easily on investor properties or second homes such as that.
Yes, the lender can collect the difference if they are interested and motivated enough in carrying to continue on with the case. All because there was a judgment entered against you that foreclosed on the property and established how much was owed. That doesn’t mean the lender is entitled to that amount. The lender has to have a separate proceeding, perhaps within in the same case, called a deficiency proceeding. At which point, they put on evidence as to the value of the property and how much is owed. You as a home owner can also established value and then the court will determine what the difference between what is owned and the value of the property to determine the deficiency judgment. At present, many banks aren’t perusing deficiency judgments because of the sheer volume of case out there and the number of foreclosures that have occurred of the last few years. But that does preclude the lender from doing so in the future.
An Underwater Mortgage is one where the value of the property is less than the amount due on the mortgage obligation.
For more information, contact us. We are never too busy to answer your questions.