Florida enacted a statewide moratorium on federally backed mortgage foreclosures (e.g., VA home loans, FHA, Freddie Mac and Fannie Mae loans) through July 31, 2020. It is doubtful that the moratorium will be renewed again, even if the significant rise in Covid 19 cases continues.
WHAT WILL HAPPEN WHEN THE MORATORIUM EXPIRES?
18% of people in South Florida have seen their incomes decimated because they lost their jobs or been furloughed. The State enacted a temporary moratorium to avoid mass evictions and foreclosures hoping that by July 31st, the economy would have bounced back. The State has reopened but especially in South Florida, it is slow and for every two steps forward, we are taking 1 step back. It will be some time before our economy starts to recover, but for many, it might be too late.
FORECLOSURE- HOW AND WHEN
Foreclosure is the process of a lender taking back real estate that is the security for the loan as a result of a default. The cause might be non-payment of the monthly mortgage, but may also be the result of failure to maintain insurance, pay taxes, and the like.
Generally, if you miss one or two months of mortgage payments you will get a call or notice from the servicer (manager) of the loan for the lender. At 3-4 months the servicer will send a “notice of acceleration”. This notice tells you that your entire loan balance will become immediately due unless you pay all outstanding loan payments (plus penalties) by a date certain.
If you fail to bring the payments current, you will be served with a foreclosure complaint and must respond within 20 days. Without a defense attorney involvement, you could be foreclosed within 3-4 months and your property sold to the lender or a third-party bidder 45 days thereafter.
DEFENDING THE FORECLOSURE – THE HOWS AND WHYS
As a result of the current economic crisis and business closures and bankruptcies, you may be unable to make mortgage payments despite the best intentions. The involvement of a competent attorney will buy you time by making the process more difficult for the lender.
This may give you enough time to improve your financial condition and qualify for loan modification or refinancing. An aggressive defense may give you months or years in your home, without making payments, improving your financial situation. It will also make the lender more receptive to a settlement that you can live with.
Some defenses are procedural (e.g., the lender has failed to comply with conditions that must be performed before a foreclosure can be filed; the foreclosure complaint may be defective, etc.)
Some defenses are substantive (e.g., the party foreclosing does not really own the note and mortgage; the mortgage itself is invalid or properly executed, etc.)
You may be entitled to loan mitigation under federal law.
Bankruptcy, at some point during the foreclosure will buy you time and may allow modification.
These are just some examples of how to defend a foreclosure. These are just some examples of how to defend a foreclosure. You should consult an attorney when it appears that foreclosure is imminent so that defenses may be explored and a legal approach to the impending foreclosure can be developed.