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 judgment can 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:
- Resources On Avoiding Foreclosure from the U.S. Government >>
- Foreclosure Prevention Measures For Miami Homeowners >>
- Effects of Foreclosure in Miami >>
- Get Your Foreclosed House Back in Miami >>
- Giving Your House Back to The Bank in Miami >>
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