Financial hardship can strike any homeowner in Florida. Those who find themselves battling to stay in control of their finances may end up facing the possibility of foreclosure.
Foreclosure is a legal process initiated by a bank or lending agency that aims to repossess ownership of the property. It is a defensive measure taken by any loan provider to minimize possible losses when a mortgage holder fails to make consecutive monthly repayments.
When a homeowner fails to pay their mortgage for 3-6 months, lending institutions, such as banks, etc. will first issue a warning. This letter will notify the homeowner that they need to pay soon or risk losing their property. This period is known as “pre-foreclosure.”
As such, you might be wondering if there’s anything that can be done to prevent foreclosure. And we’re happy to tell you there is!
What You Can Do To Prevent Foreclosure.
In this blog post, we address this issue and discuss some of the Foreclosure Prevention Measures in Miami that you can take to stop your home from ending up in foreclosure.
Depending on the specifics of your situation, some of these suggestions may not be applicable. However, we’re still going to break them all down so you can make an informed decision yourself.
1┃PAY OFF your mortgage / SELL your property.
The fastest way to get out of foreclosure is to PAY OFF your mortgage. After all, the main concern for both banks and lending firms is whether they’ll lose money on your loan. If you can sell your house FAST in Florida or keep paying back the mortgage, there’s a high chance your loan provider will forgo the foreclosure process entirely. Admittedly, this is not always easy or possible – if you had the means or finances at hand to pay off your mortgage, you probably wouldn’t be facing foreclosure in the first place.
2┃WORK OUT a deal with your bank.
If you’re proactive about sorting out your situation and you get this across to your loan provider, they might let you work out a deal to avoid foreclosure. You may be able to sit down and discuss your options with a mortgage or foreclosure specialist. If you can get a discourse started about restructuring your mortgage plan, you might just be able to spread out your payments, so they’re lower each month. Just be sure that the deal works in your favor; otherwise, you could end up repeating the process in the future.
3┃DO a short sale.
A short sale involves selling the property and using the proceeds from the sale to pay off your outstanding loan amount. It does mean you lose the house, but it prevents foreclosure from impacting your credit score, and you’ll finally be free from loan troubles.
4┃GIVE your deed in lieu.
Another possible option would be a deed-in-lieu-of-foreclosure. This involves handing the deed of your house over to the bank in exchange that they agree not to initiate foreclosure. However, this option is only viable if your home is valued at a similar amount left on the mortgage. If not, the bank can pursue you for the difference and cause you more stress.
5┃FILE for bankruptcy.
Before you jump straight in thinking that filing for bankruptcy is the option for you, remember in many ways it is far more damaging than foreclosure. Bankruptcy will impact your whole life and will remain on your credit report for up to 10 years. However, once you file for bankruptcy, you force the foreclosure process to stop, so it’s still considered a Foreclosure Prevention Measure.
If you’re still a bit confused and unsure what to do, consider the following advice:
If you can afford reduced payments and don’t want to move out, then (#2) WORK OUT A DEAL is most likely your best option.
If you’re looking for a fresh start and want to move forward without looking back, then consider Selling Your Home and Paying Off Your Mortgage with the funds from the sale.
Are you considering selling your Florida house?
We buy Florida houses fast for CASH and would love to help you with your short sale.
Contact us by filling out our short form on this page and we’ll get back to you ASAP!
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Understanding the foreclosure process in Florida is an integral part of navigating your home foreclosure. Before we get started, let’s take a look at some of the basics.
What Is Foreclosure?
For anyone familiar with how foreclosure works, they will tell you that it’s not something to be taken lightly. Foreclosure is the legal route that lenders and banks use to take possession of a mortgaged property when the homeowner has failed to make consecutive payments. It can be a tough time for some but know that it’s not the end of the world.
Learning about the process is the first step. When you take control of the situation and improve your understanding of how foreclosure works in Florida, you will be far better equipped at tackling this dilemma.
But, if you’ve already had enough and just want out from under your house, check out our website >>> We Buy Houses Miami!
The Basic Stages of A Foreclosure
The process differs depending on the state you are in; however, there are a few stages that are important to any foreclosure process. You can follow this link to read more about pre-foreclosure in Miami.
There are two ways to foreclose a property: judicial sale or power of sale.
In either scenario, foreclosure typically doesn’t go to court until you miss 3-6 months of payments. Usually (but not always), the lending firm or bank will notify you by letter (foreclosure notice of default) that you are in arrears – overdue or behind on your payments.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- You’ll receive a letter demanding payment from the court.
- You’ll have *30 days to bring the payment to court and avoid foreclosure in Miami (assuming the loan is valid). *In some cases, this can get extended.
If you fail to pay during this period, a judgment will be entered, and the lender can request the sale of your property – customarily through auction.
- Once the property sells, the sheriff will serve an eviction notice, which forces you to vacate the property immediately.
Under Power of Sale (Non-Judicial Foreclosure):
- Outside of the courts*, the mortgage lender serves you with papers demanding payment. *Although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up, and control of your property gets transferred to a trustee.
- With notice, the trustee can then sell your property to the lender at a public auction.
Anyone who has an interest in the property must be informed during either foreclosure method.
For example, contractors or banks with claims against the property can collect from the sale of an auction.
After A Foreclosure Auction
The sale proceeds will pay off the remainder of the loan. In situations where the sale of the property doesn’t cover the full amount, a deficiency judgmentcan be issued against the borrower.
What’s a deficiency judgment?
Deficiency judgment: a judgment against the borrower for the remainder of the bank loan after the foreclosure sale.
Depending on the State, some will assess the full loan amount against the borrower while others will re-evaluate the amount owed based on the fair value of the property at the time of the sale.
Since laws vary in every State, here’s a great resource that lists the state by state deficiency judgment laws.
It’s generally in your best interest to avoid a foreclosure auction. The most suitable course of action would be to call up the bank or get in touch with a reputable real estate firm like us at Sunshine State Buyers. We are an experienced firm operating locally in Miami.
We can help you by negotiating directly with the bank on your behalf. Even if your home is worth less than what you owe, negotiations can involve lowering the amount you owe in a sale – or eliminating it altogether. Check out our website >>> We Buy Houses Miami!
We buy houses in Miami Florida like yours from people who need to sell fast.
Give us a call anytime (305) 916-3328 or fill out the form on this website today! >>
Additional Foreclosure Resources: