In Florida, the process of a foreclosure is controlled by the Florida Statutes. Foreclosure is a legal process a mortgage holder uses to obtain both legal title and possession of the property. When the lender (Mortgagee) loans money to the borrower (Mortgagor) there are many documents which are executed. The two main documents are the Promissory Note and the Mortgage. The Promissory Note contains a promise to pay at a certain rate and under specified terms. The mortgage instrument is a document which allows the lender to seek foreclosure if certain defaults occur. In Florida, this process is done through the Courts.
Different mortgage companies handle delinquencies differently but once you default on your mortgage the lender will retain a law firm and file a foreclosure action. A Complaint is filed with the Court which spells out all the preliminary information and the nature of your default. That Complaint will be served on you by a process server. Once you receive the Complaint and Summons you will have twenty days in which to file your legal response. If you do not file any response, a default will be entered by the Clerk. This Default is a certification from the Clerk to the Judge that you have not filed a response and in essence, you admit the default which is contained in the Complaint.
Despite the Foreclosure Complaint, you have many opportunities to save your home. Among the choices are restructuring or ‘Loan Modification’, a negotiated reinstatement or a Chapter 13 Bankruptcy. Loan Modifications are possible under a wide variety of circumstances. Some of these include the lender reducing the amount of the principal balance owed and thus a reduction in the payments. A Negotiated reinstatement is a process where you make an arrangement to pay the delinquency and attendant court costs and continue on with your mortgage payments as if no default had occurred. Chapter 13 is a bankruptcy process where you can do one of several things to save the home from foreclosure. A loan Modification can be negotiated as part of your Chapter 13, this may include a reduction of the principal balance and a corresponding reduction in payments.
All of your options are complex and critical and given the complexity and importance of saving your home, you would be well advised to seek and obtain legal counsel for any of these foreclosure alternatives. Just because you are delinquent and you have received ‘legal papers’ seeking to foreclose on your home, it is not too late to save your home. The most important part of this process is not to sit on your rights and remedies. If your mortgage is in arrears, you would be well advised to seek experienced legal counsel and explore what solution is best for your situation.