More than 2.5 million homeowners were 60 days past due on their loans at the end of 2008. Almost one in six homeowners owes more than the home is currently worth. Foreclosures are at an all time high and many are searching for a solution. Some people have chosen to file bankruptcy in order to protect their homes, however; there are other alternatives for foreclosure defense.
Florida Foreclosure Procedures
Foreclosure begins when the lender brings a lawsuit against the borrower in order to gain control of the property. This usually happens when the borrower is in default of the mortgage agreement. Under the current laws in Florida, the lender is not required to give the borrower prior notice of their intent to commence the foreclosure process. However, some mortgage agreements may specifically state that notice be given prior to foreclosure. The court order for foreclosure must specifically address how the foreclosure will take place. The lender should send notice to the borrower via registered or certified mail.
How Can I Stop the Foreclosure Process?
There are several steps you can take to stop Florida foreclosure. Some of these include:
- Forbearance—Contact your lender right away if you think you may be unable to meet your mortgage payment. You can request a repayment program be set up by the lender to give you time to make up for overdue payments. This is often done for a temporary period of time when a borrower becomes suddenly unemployed.
- Debt Forgiveness—A lender may be willing to accept less than the full amount of the current debt owed if the mortgage is paid in full. For example, if a homeowner owes $350,000 on the home but can only get an offer for $290,000, the lender may agree to accept this as full payment, thereby forgiving $60,000 of the current the debt.
- Hope for Homeowners Program—This foreclosure prevention program was created by the U.S. Congress as part of the Economic and Housing Recovery Act of 2008. If lenders choose to participate, they must agree to reduce the principal of the loan to just 90% of the current market value.
- Short Sale—A short sale occurs if the lender agrees to take less than the amount required to pay off the existing loan in full. The lender may be willing to do this as an alternative to the costly and lengthy process of foreclosure.
- Note Modification—Many people who opted for an adjustable rate mortgage found themselves unable to pay their mortgage when the interest rates increased. By obtaining a note modification, they may be able to switch the loan to a fixed rate mortgage instead.
- Repayment Plan—Your lender may agree to spread out the missed mortgage payments over a period of time. Let’s say that your current payment is $1500 per month. The lender may allow you to add $200 a month to each payment for a specified period of time until you get caught up.
- Refinance—If you have enough equity in the property, the lender may allow you to increase the balance of your load and include the missed payment and re-amortize the loan amount.
- Partial Claim—You may be able to apply for an FHA partial claim. This is second mortgage provided interest-fee through Housing and Development (HUD) to help borrowers reinstate their primary mortgage that may be in default.
- Reinstatement of Your Loan—You may be able to stop foreclosure proceedings by bringing your loan current and paying any fees that have occurred, such as legal fees or late charges. If you are able to do this, the lender must accept payment and reinstate the loan.
- Deed-in-Lieu of Foreclosure—This occurs when the borrower agrees to hand over the keys to the house back to the lender. In this situation, the lender may accept the deed to avoid going through the foreclosure process. The borrower is free from a mortgage payment they were unable to meet and it is less harmful on your credit than a foreclosure.
- Sell the Home—Consider selling your home using a discount broker or requesting that the brokerage be willing to negotiate their commission rate. Some people have been very successful at selling their home at a higher price by “staging the home”. This is usually done by professionals, but you can research tips on how to make your home more appealing to buyers. Remove as much clutter as possible. Fix anything that is broken or damaged that will be immediately noticed. Replace carpeting if necessary because it’s well known that spending a few thousand dollars may end up bringing you much more when you sell your home.
Some lenders may be willing to work out an arrangement where they give the homeowner time to find a place to move into rather than evicting them.
Consult with a Foreclosure Defense Attorney
If you are facing foreclosure due to missed mortgage payments, there are many legal options that you may not be aware of. Hiring an experienced attorney who specializes in real estate law can assist you in finding an alternative to foreclosure and eviction.
