There is a way to slow or even stop the lenders foreclosure on the loan on your home. But before I show you the method, I want you to have a good idea of the steps in the foreclosure process.
A foreclosure case is a judicial proceeding that allows the lender to get legal title [deed] and possession of your property. Once obtained, the lender will re-sell to try and recoup as much of its money as possible. Unlike some states, Florida requires all foreclosures to go thru the courts and adhere to set guidelines. As of May 2012 the turn around time from the first missed mortgage payment to the bank is taking 24-30 month’s.
Here is the steps in that process:
DEFAULT LETTER: The first action that the lender takes is to notify you via registered letter that you are in default, along with a demand for payment.
LIS PENDENS: If you do not bring the back payments current, the lender will retain an attorney to file the legal paperwork to start the foreclosure process. That paperwork is called a Lis Pendens.
When it is filed and recorded in the public record, it alerts all parties looking at your property, that there is a cloud now placed on the deed, and that legal action will be upcoming.
NOTICE OF COMPLAINT & SUMMONS: After the complaint [Lis Pendens] has been filed with the clerk of the court, the lender will legally serve the complaint. The summons will direct you to provide a response within 20 days after being served. If you dodge being served, most states allow a public notice to be used, such as in the local newspaper.
MOTION OF SUMMARY JUDGEMENT & TRIAL: After the case has been filed and you have responded, the lender will file a Motion of Summary Judgement. By doing this the lender is advising the court that you nor anyone else has any objections or disputes and a trial can be avoided. If the Judge agree, the document is so ordered.
SALE OF THE HOME: The Summary Judgement usually contains a date at which the home will be sold at public auction. This is the final step in the foreclosure process. In most cases the bank will get the highest bid thru whats called a “credit bid”, up to the amount of the judgement. Most lenders are quick to respond, allowing only a few properties to actually be auctioned off.
DEFICIENY: This is the scary part! If the lender does not recoup the full amount of the loan amount upon re-selling the property, the lender does have the right to sue you for the difference. Once a money judgement is entered, the lender has the right to garnish wages or bank accounts, or place a levy against your assets. That is the bad part for most caught in this situation.
There is a way to slow or even stop this process. Filing Bankruptcy in most cases in Florida stops the foreclosure process from proceeding until the lender gets the bankruptcy courts permission to proceed. So, filing bankruptcy can extend the time you can stay in the home significantly. In addition, if you chose a chapter 13 bankruptcy [restructuring debt] may provide you the opportunity to cure the mortgage pay off deficiency over a time structured period. Bear in mind that a chapter 7 bankruptcy is a walk away from debt, while a chapter 13 works somewhat like a debt consolidation plan in that a monthly payment will be made to the trustee, who thereafter will pay creditors. Most creditors will actually reduce the total amount owed with the idea that they can collect something……..even if it’s just a fraction of the overall debt. Once completed, the debtor receives a complete discharge.
The old idea that filing bankruptcy is an embarrassing or something to hang you head over……is long gone from todays society. If you’re facing foreclosure, you should at least consider bankruptcy as a way to reduce stress and harassing phone calls. In today’s world, this action is not perceived as a sign of being a bad person at all!
If you want to consider this direction, e-mail me for a few names of attorneys that specialize in this field..