Mortgage Modification: Time is Not on Your Side

If you can no longer make your mortgage payments but you don’t want to give up your house, a loan modification may be a viable solution. Under the government’s Home Affordable Modification Program or HAMP, you can request your lender to restructure your loan so you’ll end up paying smaller monthly installments.

Before Foreclosure

Though foreclosure is something no one wants to face, it helps to understand the foreclosure process in Florida—especially since much can be done before foreclosure to better your outcome.

Missing One Payment

The road to foreclosure starts when you miss one payment. If you want to avoid foreclosure altogether, it is important to update payments as soon as possible. You will incur a late fee due to your missed payment, so be sure to take this into account.

America’s Seniors More at Risk of Foreclosure

Although the past U.S. housing crisis left plenty of people struggling to keep their homes, none were as affected as the American senior population. A 2011 survey identified homeowners over 75 as having the highest foreclosure rate for people over 50. According to a report from the Consumer Financial Protection Bureau, the percentage of seniors with mortgage debt increased from 22 percent in 2001 to 30 percent a decade later. In that same time period, the rate more than doubled among those aged 75 and older, from 8.4 percent to a staggering 21.2 percent.

Loan Modification: Best Done Sooner than Later

When it comes to saving a home from foreclosure, one of the best solutions you can use is to apply for a loan modification. Think of it as a backup plan that you can fall back on. It’s possible that you won’t get the verdict you want, which is to retain your home, out of your foreclosure case. Your foreclosure lawyers will likely advise you to start talking to your lender about loan modification while they defend your foreclosure case.

Mortgage Modification Pitfalls

If you’re having problems paying your mortgage bills, a load modification might sound like a really great idea. However, homeowners should be aware that mortgage modification is tricky business dotted with many potential pitfalls.

First, while laws have been changed to force lenders to respond to homeowners within 10 days after they put in a modification request and to provide them with an answer within 30 days, your lender may rule your application incomplete and stretch out the process. Thankfully, a law preventing dual-tracking—the act of processing a foreclosure while a loan modification request is pending—has been put in place to protect homeowners.

A Brief Outline of the Florida Foreclosure Process

Foreclosure is an all too familiar reality in the Sunshine State, with some 1.36 million properties facing repossession in 2013 alone. If you’re one of the many homeowners who may be facing foreclosure, you’re first reaction may be to panic. However, the best way to face this challenge is to arm yourself with knowledge. Below is a brief timeline of the foreclosure process in Florida:

Molon Labe: When Someone Comes to Take Your House

Molon labe—they may seem like two unassuming words, but they carry huge impact. These words are reportedly what the Spartan General-King Leonidas said in reply to Xerxes, the Persian Emperor, when the latter demanded Leonidas and his 300-strong army to lay down their arms and surrender. In English, molon labe means ‘come and get it’, a classical expression of defiance.

Molon labe has been used many times since, becoming the signature battle cry for people who wage war against oppression and refuse to be trampled by men who would deprive them of their God-given right to live free. For homeowners facing foreclosure, molon labe is not only a battle cry—it’s a state of mind.

Protecting Soldiers from Foreclosures

According to statistics, roughly five percent of military personnel on active duty reside in Florida. That's roughly 60,000 soldiers and officers stationed in different parts of the country, if not the world, away from their loved ones. Even if they're still in Florida, daily military life can get in the way of civvie life, which includes paying loans.

Facing Foreclosure, Can You Save Your Home?

Your home is in foreclosure, do you have the money to save it? This is a question that every homeowner facing foreclosure must answer HONESTLY. If you don’t, it may be too late to try any option to save your home, and do whatever is necessary.

Common Questions about Foreclosures in Florida

Receiving the foreclosure notice for your home will stir up a lot of emotions: fear, anxiety, and confusion. Along with these feelings, you’ll also have a lot of questions about Florida’s foreclosure laws and processes.

Of course, knowing the answers to these queries can help you make better decisions on how to proceed. If you find yourself in the middle of a foreclosure case, here are the three things you should definitely know:

Tips when Hiring a Foreclosure Attorney

The foreclosure process often feels like an uphill battle. However, you don’t have to face this ordeal alone, thanks to experienced foreclosure attorneys who can delay the case or have it dismissed completely.

Of course, the lawyer you hire becomes your partner in fighting repossession, so be sure to choose the best candidate for this task. Below are three important tips to keep in mind before you hire one:

Knowledge of State Laws

Each state handles foreclosures differently, with some having non-judicial or judicial processes. Florida belongs to the latter category, and its foreclosure laws have nuances not present even in other judicial states (e.g. expedited hearings, final and non-revocable judgments). As such, hire a local attorney who is well versed in the state’s laws.

When Mortgage Modification Just Won’t Cut It

Lenders that accept mortgage modifications often tout it as fantastic way to find relief from debt. However, diving straight into mortgage modification isn’t always the best option, as the scenario below illustrates:

Suppose a debtor has two mortgages, totaling $300,000, on a house worth $187,500. On the first, he owes the lender $200,000, and on the second, $100,000.

If the debtor agrees to a mortgage modification outright, and the lender writes down the balance on the first loan to $166,000, this puts the first loan on solid ground, but the debtor himself remains $121,500 underwater. Additionally, the second loan can no longer be stripped in a bankruptcy case because the value of the house, if it was sold, would cover a portion of the second loan.

On the other hand, if the debtor files for bankruptcy, instead, this wipes out the second $100,000 loan. The debtor still remains underwater, but only to the tune of $34,000. While both scenarios will put the debtor at risk of drowning financially, the second is still far more favorable.

A third option might see the debtor filing for Chapter 13 bankruptcy. This wipes out the second loan and puts the first on a repayment plan. The debtor can then work with the lender to modify the loan, which then pulls him completely clear of any risk of drowning.

Before entering a tricky maze of mortgage modifications, consulting a bankruptcy lawyer first is always best. Otherwise, you put getting the best deal at risk.

New Law’s Effect on the Foreclosure Process

Florida has the highest rate of foreclosure among all 50 states. Given how many cases are being heard at any given time, it’s not surprising that the state also has the highest backlog of foreclosure cases. To remedy this, Governor Rick Scott signed a law in June 7, 2013 that seeks to expedite the foreclosure process.

While the law does have homeowner-friendly stipulations—lenders now face stricter documentary requirements before they can file a case—it also contains provisos that hurt people who face foreclosure. Below are the two main changes that should concern homeowners:

Show Cause Hearing

When a lender files a complaint, they may also file a request for a “show cause hearing,” wherein the homeowner must convince the courts why the foreclosure should be halted. If the request is approved, the show cause hearing can happen in as little as 20 days, limiting the amount of time a borrower can mount a defense, request forbearance, or get a loan modification.

Finality

Moving forward, all judgments on foreclosure hearings are final. Even if your home was foreclosed on fraudulent grounds, you will no longer be able to take back your property. The only recourse you have is monetary damages.

Given these new rulings, homeowners facing foreclosure must contact foreclosure attorneys immediately to increase their chances of delaying or rescinding property repossession.

Foreclosure Hearings: What to Expect

In a foreclosure case, the lender’s main goal is to satisfy the mortgage owner’s outstanding balance. If the balance isn’t paid, the lender will start legal processes to claim the property from the owner and enact measures to recoup its expenses. Before the home can be sold though, the lender will have to schedule hearings to demand the borrower to pay the total balance of the unpaid loan. If you received a foreclosure notice, here’s what to expect from your hearings:

Preliminary hearing

At this hearing, you will be given the chance to present your case to the judge. If you present an acceptable reason for not being able to make payments on your mortgage, the judge may require the lender to give you enough time to work your issues out. If not, the judge will rule in favor of the lender and the foreclosure case will move toward summary judgment.

Summary judgment hearing

In general, a summary judgment hearing is held 20 days after the lender moves for summary judgment. At this hearing, it is the lender’s turn to present a case against you. You may give testimony and provide evidence if you are present, but if you aren’t able to dispute the lender’s claims, the judge will likely rule against you and grand the lender the right to foreclose and sell your property.

To increase your chance at success at these hearings, it is imperative that you work with an experienced foreclosure attorney.

Introduction to the Foreclosure Process

When a homeowner consistently fails to make payments on his mortgage, the lender that holds the mortgage note may pursue foreclosure on the property. The lender initiates the foreclosure process by filing records with the court. Foreclosure transfers the legal ownership of a property to the lender so it can take measures to recoup its investment.

How will you know when you’re actually ‘in foreclosure’?

In legal terms, foreclosure means that a foreclosure lawsuit has been filed against you by your lender. Although your lender may send you a lot of paperwork when you fail to make payments, you aren’t ‘in foreclosure’ yet unless a process server knocks on your door and serves you or an adult member of your household a summons and complaint telling you that foreclosure proceedings have been filed against you in the appropriate court.

How many days do you have to respond to the foreclosure lawsuit?

In Florida, those who have been served a foreclosure summons and complaint have 20 days to respond. In this case, responding means preparing a written legal defense and filing it with the Clerk of the Court in the county where the suit has been filed. If you fail to file a response within 20 days, the bank can obtain a default against you.

For more information on these topics, get in touch with a foreclosure attorney.

Judicial & Non-Judicial Foreclosure Explained

Foreclosure happens when you don't pay your dues on time, forcing the lender to take back the home and put it up for sale. Depending on state laws, foreclosures can either require a formal complaint to be filed in court (judicial foreclosures), or served without a court order (non-judicial foreclosures). Florida is among the 25 states that operate on judicial foreclosure (although some states offer both types).

Judicial foreclosure consists of three stages: the service, the proceeding, and the eviction. The key in dealing with foreclosures is to avoid letting the foreclosure notice reach the final stage (which is eviction) by paying every cent that you owe. A foreclosure notice can be neutralized by settling the outstanding amount, along with penalties and interest. You can still hope for a turnabout in the legal proceedings by defending your ownership of the home. For example, your lawyer could say that the plaintiff failed to follow due process.

Still, foreclosure lawyers say that emphasizing the defendant's ownership of the home is done so that the lender will drop its intent to foreclose the home. Foreclosure can be a scary thing if you let it persist for a long period, but it can be stopped by paying your dues. This just goes to show that it's important to keep your finances in check.