Understanding the foreclosure process in Florida is an important part of navigating your own home foreclosure.
Before we dive in…
Understanding the Foreclosure Process in Florida
What is foreclosure anyway?
Foreclosure is the lawful procedure employed by lenders to reclaim a property used as collateral for a loan, typically when the borrower ceases to make payments.
Foreclosure may not be an enjoyable experience, but it’s crucial to remember that it doesn’t signify the end of everything.
Understanding the mechanisms of foreclosure in Florida equips you with the necessary information to effectively handle the situation and emerge from it in the best possible manner.
The Basic Stages of the Foreclosure Process
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale.
Connect with us by calling (561) 286-4755 or through our contact page to have us walk you through the specific foreclosure process here locally in Boca Raton.
In either scenario, foreclosure typically doesn’t go to court until 3-6 months of missed payments have elapsed. Usually (but not always), a lender will send out many notices that you are in arrears – overdue or behind in your payment.
Under Judicial Foreclosure:
There are several crucial stages involved in any foreclosure procedure.
Foreclosure procedures vary across different states in the country.
States employ two primary methods for foreclosing on a property: judicial sale or power of sale.
To receive guidance on the specific foreclosure process in your local area of Boca Raton, Florida, please reach out to us via phone at (561) 286-4755 or through our contact page.
In either case, foreclosure typically does not progress to the court stage until 3-6 months have passed since the missed payments. Generally (although exceptions exist), lenders issue multiple notices indicating that you are behind or overdue on your payments.
- Your mortgage lender must file suit in the court system (lis pendens).
- You will receive a letter from the court demanding payment.
- Assuming that the loan is valid, you’ll have 30 days to bring payment to courts to stop the foreclosure process (and sometimes this time frame can extended).
- If you fail to pay during this period, a judgment will be entered and the lender can request the sale of your property – usually through an auction.
- Once the judgement is granted by the courts, a foreclosure sale will be scheduled.
- Once the property is sold, the sheriff serves an eviction notice and forces you to immediately vacate the property.
There are ways to delay or stop this process. We are not attorney’s but have experience with this situation. We have the resources and connections that can buy you the necessary time to be able to make sound decisions that will benefit you in the long run.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Here’s a great resource that lists the state by state deficiency judgment laws, since every state is different.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at FL House Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
We can also help you avoid receiving a deficiency judgment. We have years experience negotiating with lenders in all different types of situations.
If you need to sell a property near Boca Raton, we can help you.
We buy houses in Boca Raton Florida like yours from people who need to sell fast.
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Another Foreclosure Resource For Boca Raton Florida HomeOwners: