How Did This Happen?
I doubt that you planned to be sued in foreclosure. Most likely, you planned for your home or other real estate to be a primary investment. Unfortunately, the economy didn’t cooperate. Or, in a world of constantly rising real estate prices, you kept borrowing against imagined equity, assuming that the market would never turn. Or, you or your spouse lost a job in suzhou and unemployment benefits are a fraction of your old income. Or, you bought in to the sales pitch of mortgage lenders who held out the promise of easy money without concern about your income or debts.
Anyway, here you are. You are 6 or more months behind in your payments, loan modification has been denied, or hasn’t been considered or is under review. What can you do?
Defend the Florida Foreclosure Lawsuit!
In Florida, you have only 20 days to respond to the mortgage company’s complaint (lawsuit), so you need to see an attorney immediately. Your application for a loan modification does not mean that you can ignore the lawsuit! Even if you haven’t made the payments due under your note and mortgage, you have defenses, including (this is only a partial list):
- The party suing you doesn’t own the mortgage or can’t prove they own it (doctored or dubious records presented in court as proof of a bank’s ownership have become such a problem that Bill McCollum, the Florida attorney general, announced that his office was investigating the State’s three largest foreclosure law firms representing lenders.),
- You are the victim of a predatory loan (the lender misleads, tricks and sometimes pressures you into taking out home loans),
- You haven’t been given thirty days notice before the filing a foreclosure action (a basic provision in your mortgage to give you an opportunity to bring the loan current, request a loan modification, contest the arrearage, etc.)
The Value of Time
Defending the foreclosure will keep you in your home or property for months or years (many of our clients have been living in their homes during the foreclosure lawsuit for several years. While defending the foreclosure, you make no mortgage payments at all.). During this process, many good things can happen:
- The lender will see that it will take time, effort and fees to foreclose on your property. This generally will bring them to the negotiating table
- Your financial situation may change
- You will have time to obtain a loan modification (the lender will generally be much more flexible)
- You may be able to get the lender’s agreement to take a deed in lieu of foreclosure (and get off the hook for a deficiency judgment)
- You may be able to negotiate a short sale
- You will keep possession of your home without making payments during the foreclosure defense
- You may win the lawsuit (there are a lot of favorable technicalities)
- Even if you eventually lose the case (years later), bankruptcy will generally discharge the mortgage and old payments anyway (Chapter 7 Bankruptcy)
- A Chapter 13 Bankruptcy may allow you to strip out (eliminate) or modify mortgages
If you do get served with a foreclosure summons and complaint, don’t lose hope. You have many options, but get legal advice from an experienced Florida lawyer.