Foreclosure Defense Lawyers

Understanding the Foreclosure Process

When a borrower stops paying, they are in “default” under the terms of the note and mortgage.  The mortgage gives the person or entity who lent the money, who “owns” the note and mortgage, and/or who is otherwise “entitled” to foreclose for other reasons the right to file a lawsuit to foreclose on the property.  The bank, investor, trust, servicer and/or whoever owns the note and mortgage or is entitled to enforce on behalf of the owner, then becomes the plaintiff in the lawsuit.  Like every other plaintiff in any civil lawsuit, the party seeking to foreclose has the burden to prove all elements of their case by a “preponderance” or greater weight of the evidence.  In a foreclosure action, the plaintiff must successfully prove among other things that they are the proper party; they are entitled to receive payments due under the terms of the note and/or that they are the party entitled to foreclose.  This is generally referred to as “legal standing.”  Part of standing includes pleading in the complaint and ultimately proving that the plaintiff is the “owner and holder” of the note or is otherwise entitled to foreclose on behalf of the owner and holder.  If the mortgage was transferred as they typically are in today’s secondary mortgage market and subsequent securitization so that the plaintiff is not the original mortgagee listed on the mortgage, the plaintiff has a lot of work to do to prove it received the mortgage via a lawful assignment or chain of assignments both required by law and required by the multitude of agreements created in the securitization process.

Another interesting point to note is that Florida is known as a “Judicial Foreclosure” state.  This, as it sounds, requires the court’s intervention in order to foreclose on the property.  Some states, “non-judicial foreclosure” states require no court to take back the mortgaged property in the event of a default.

Below is a chart illustrating the time periods in the pre-foreclosure and foreclosure process in Florida.

PRE-FORECLOSURE TIMELINE

Day 1 – Payment Due, No Payment Made

Day 7-10 – Call from Lender/Mortgage Servicer

Day 16 – Late Charges begin to accrue

Day 20-25 – Call and Letter from Lender/Mortgage Servicer

Day 30 – Default reported to Credit Bureaus and Lender sends second letter

Day 40 – Lender/Mortgage Servicer sends letter with payment options

Day 60 – Lender/Mortgage Servicer sends demand letter or “acceleration notice”, Credit Bureaus update their reports

Day 90 – Lender/Mortgage Servicer sends file to attorney, Credit Bureaus update their reports

Day 90+ – Any time after 90 days the entity claiming their entitlement to foreclose can file suit.  In a scenario in which the entity seeking to foreclose is not the same entity as the original mortgagee or lender, with competent counsel, this process alone can take more than 12 months.

FORECLOSURE TIMELINE

Day 1 – Complaint and Lis Pendens are filed and served with a summons on the property owner.

Day 20 – A responsive pleading is due, with no responsive pleading filed, plaintiff moves for default judgment.  With competent legal counsel, there can be a multitude of legitimate issues raised via motions, hearings, and discovery requests which would extend this time period greatly.

Day 45 – 60(If not represented by competent counsel) – Court schedules hearing for default judgment and at the hearing enters Final Judgment of Foreclosure.  By statute, the court should order the sale of the property on a specified day within 20-35 days of the order. However, sales can still lawfully take place later than 35 days and are sometimes taking set many months after the order is entered.

Day 80 – 95(If not represented by competent counsel) – Notice of Sale published once a week for two consecutive weeks in local publication, with last posting at least 5 days prior to sale; auction sale conducted; winning bidder applies 5% deposit from funds advanced electronically prior to sale and then pays the rest by noon the following day.  Dade, Broward and Palm-Beach Counties conduct their auctions online.  Certificate of Sale is filed “promptly” after sale and Right of Redemption ends when certificate of sale is filed.

Day 105(If not represented by competent counsel)  – Ten days after filing Certificate of Sale, Certificate of Title is issued – Title vests, no further action necessary unless property is still occupied.

Day 106 -119(If not represented by competent counsel) – 1 -14 days after Certificate of Title issues, if property still occupied, sheriff issues Notice to Vacate

Day 119 – 140(If not represented by competent counsel) – 1 – 21 days after Notice to Vacate, sheriff vacates the property

If, on the other hand, the entity seeking to foreclose is not the same entity as the original mortgagee or lender, with competent counsel, this process can take many years, if the bank is ever able to foreclose…

The above is just an overview to help understand the current state of the foreclosure process.  For more details or if you have any questions or comments, please feel free to call or e-mail us today.  If you are a property owner concerned about losing your property in foreclosure, we are here to serve you!

We are a debt relief agency.  In addition to other legal services, we help clients file for bankruptcy relief under the Bankruptcy Code.