The Foreclosure Process
If you don’t make your payments, the bank cannot just kick you out of your house. They have to file a foreclosure action. A foreclosure action is a civil lawsuit.
The foreclosure action is begun by the lender filing a Complaint. A Complaint is a paper which essentially states that you broke your promise to pay the Note and Mortgage, and requests that the property be sold at a foreclosure sale.
You must be served with the Complaint. In Florida, service is accomplished by a sheriff or process server handing you a copy of the Complaint and a Summons. A Summons is a paper which requires you to file a written response to the Complaint within 20 days. The Summons cautions that if you do not respond, a foreclosure judgment may be entered against you without further notice.
Filing A Response
Filing a response, called an “Answer” within the 20 day time limit keeps you from having a judgment automatically entered against you. By filing a response you will receive notices of all hearings and court proceedings in the foreclosure action, including copies of all papers filed by the lender’s attorney. The purpose of this is not necessarily to defend the lawsuit, but to make sure the court and attorney know that you are participating in the lawsuit. If you wish to actively fight the foreclosure you should see an attorney. A copy must be mailed to the lawyer, and the original mailed to the Clerk of Court.
The mere filing of an Answer adds time to the foreclosure process. This could be advantageous to the homeowner. Perhaps you need to stay in the property a bit longer for financial or other reasons. Perhaps you are trying to sell the property. You may need the time to negotiate a short sale or modification.
Another reason to file a response is that you may have defenses to the foreclosure action. A “defense” means that you have valid legal grounds to fight or object to the foreclosure. These defenses must be stated in the Answer. If they are not raised at this time, you may find later that you have waived them, or at least that it is much more difficult to raise them.
Motion To Dismiss
A motion to dismiss points out technical errors in the Complaint. A common technical error lenders make is failure to attach a copy of the Note and Mortgage to the Complaint. Another common error is that the lender named in the Complaint is not the original lender with whom the mortgage was signed. Most technical deficiencies can be corrected eventually, but this will purchase additional time.
Counterclaims: Suing Back
You may have grounds not only to defend the foreclosure, but actually “sue them back” in a counterclaim. If you can show the lender engaged in predatory lending, fraud, Truth in Lending violations, or other illegal conduct, you may be in a position to file a counterclaim. If lender wrongdoing can be shown, the lender could wind up losing its right to collect on the mortgage.
If you believe that you have grounds to file a counterclaim because the lender engaged in some type of serious misconduct, then you should bring it to an attorney. The attorney will evaluate your case and weigh the costs and benefits of undertaking this type of litigation. Be aware that the Summons only gives you 20 days to respond, and you therefore need to go to an attorney quickly.
The Motion For Summary Judgment
The MSJ is a paper filed by the lender, asking for a quick judgment without a trial. The MSJ must be presented to the judge at a court hearing. If you filed a response, you must receive a notice for the Summary Judgment Hearing in the mail.
The Summary Judgment Hearing
At the hearing, the judge will ask both sides to state their positions. The judge may ask you some questions, but generally if the lender’s paperwork is in order, he will sign the foreclosure judgment. The reason judgment can be entered just by looking at the MSJ paperwork is that once the lender has shown the judge proof that you have not paid your mortgage, there is nothing more to prove. Unless you have some defense or counterclaim which would justify or excuse your nonpayment, the lender will win the MSJ, and the judgment will be signed. This is not to say that a foreclosure cannot be successfully challenged, but in most foreclosures the lender will “win” its case at the summary judgment hearing.
The Final Judgment of Foreclosure
The judgment which the judge signs carries two important pieces of information. The first one is the judgment amount. The judgment amount is the total of all money owed by you to the lender, including the principal balance of the mortgage, interest, penalties, late fees, attorneys fees, title search fees, etc… The judgment amount is the amount that the property will have to sell for to fully pay off the lender.
The other important information is the foreclosure sale date. In Florida the foreclosure sale must be held within 35 days. Judges however may, under certain circumstances, allow some extra time beyond the 35 days. If you need extra time, you should request it at the MSJ hearing.
The Foreclosure Sale
The foreclosure sale is an auction where the public is invited to place bids on your property. Prior to the foreclosure crisis, bidders would show up at these auctions. Now that most properties are upside down, there is little or no bidding at the foreclosure sales. As high bidder, the lender ends up owning the property. If you have not vacated the property by ten days after the sale date, the lender can evict you from the premises in fairly short order.
If you have any questions about Mortgage Foreclosures in Florida, contact us today.