How Much Time Does Someone Have To Answer A Foreclosure Lawsuit?

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Normally in Florida, a consumer has 20 days from the date they are served to respond to a foreclosure lawsuit. One issue I try to educate on is that service of the lawsuit, which is like getting a packet of papers from a FedEx guy (except it’s from a process server instead) does not necessarily mean that they were handed directly to the person named in the lawsuit. If those papers go to someone else who lives in the household, or through other substitute service methods, that also can be legally sufficient, and those alternative methods of service still start that 20-day clock.

What Are The Repercussions Associated With Foreclosure On Someone’s Life?

A foreclosure can have a number of impacts. First of all, a foreclosure judgment will result in the loss of the property itself. Foreclosure can impair credit and the ability to obtain new lending, and foreclosure can result in a deficiency. A deficiency is the collection of whatever the difference is between the property value and the loan balance. For example, if the loan balance at the end of the foreclosure case is $200,000, but the property was only worth $150,000, then the lender could continue to pursue the consumer for the remaining $50,000 balance.

Can I Still Save My Property If The Lender Has Begun Foreclosure Proceedings?

There are a number of opportunities even after a foreclosure case has started to be able to reach beneficial outcome. In some instances, a consumer may be able to obtain a loan modification. In other instances, consumers may look for opportunities to get rid of their home, but mitigate any sort of negative impact that results from the loss of the home—such as a short sale, or deed in lieu of foreclosure, that allows homeowners to part ways with the home while mitigating any impairment. There can also be other options as well through the litigation process.

Is It Ever Advisable For Someone To Walk Away From Their Mortgage?

When I hear the term “walk away,” to me that means that the consumer is leaving the house, locking up the doors, and not reaching any sort of consensus with the mortgage company to protect the consumer from any sort of deficiency or other fallout. In my mind, that is probably the worst of the available options. There are so many remedies that can be available for consumers. I think the worst idea is just to cross your fingers and hope everything works out. The other thing to be mindful of in that “walk away” scenario is just because a consumer has left the house, doesn’t mean their other home-related obligations have ended. So for many consumers, they may vacate the home, but there might be some sort of a homeowners or condo association obligation that continues to accumulate.

Similarly, there may be code enforcement obligations or real estate tax obligations that could accumulate while someone has vacated the property but it’s still titled in their name. There are a lot of people that will call up years after they vacated the house, and they might have a really sizeable obligation to an association. It’s coming to them as total shock, because they are getting this enormous bill in the mail and trying to figure out how to deal with it, when they thought they had washed their hands off the property.

How Do HOAs React IN A Foreclosure Situation?

Homeowner’s Associations have a lot of resources available to them. Especially in Florida, there is a lot of statutory power in associations, meaning that when associations go to collect, it kind of turns into a snowball. This is because they’re not just collecting these payments, they are also allowed to collect on late fees, interest charges, attorney’s fees and so on, whether it’s the context of foreclosure or sometimes just in the context of a missed payment or two that has snowballed into sometimes tens of thousands of dollars. This can lead to some very difficult discussions.

Can I Avoid Foreclosure By Negotiating A Lower Rate Or A Loan Modification?

A consumer absolutely can request a loan modification from their lender, either before or after the legal process has started for a foreclosure. The loan modification process is not an easy thing; it is paperwork intensive, it requires a lot of dedication, and modifications are not guaranteed. Ultimately, just like any contract modification, both parties have to agree to the change in order for it to be successful. The reality is that the lenders have the power in the decision-making process in terms of whether or not a modification will be granted, but it is a possibility.

The other thing to consider is principal reductions. Principal reductions, just like modifications as a whole, are not a guarantee in a modification. As the real estate market has re-stabilized, principal reductions are more and more exceptional.

For more information on Foreclosure Defense In Florida, a free initial consultation is your next best step. Get the information and legal answers you are seeking by calling (727) 538-4188 today.