In this article, you can find out:
- What choices you may have for selling your home if you’re facing foreclosure.
- The one possibility of getting your house back even after it has been sold by the bank.
- The challenges your lender faces at a foreclosure trial, and how this helps the foreclosure defense.
What Are Some Of The Most Common Options For Selling A Distressed Property In Florida?
If you are facing foreclosure, you are likely feeling overwhelmed and wondering about your options. Fortunately, if you would like to sell your house, you may have multiple options, depending on the timing. Some of these options include a short sale and a deed in lieu.
Reaching out to our firm early in the foreclosure process allows us to slow down the foreclosure with plenty of time for you to sell your house. As long as your house has value, or you have equity in the home, it is usually an easy process.
However, if you wait too long before contacting an attorney, time can be a limiting factor. When it is already far into the process, there is a foreclosure judgment against you, or your house is coming for sale within 30 days, then there are time constraints.
What Is A Short Sale?
A short sale occurs when you owe more on the property than it is worth. If you don’t have equity in your home, a short sale agreement between you and the bank allows you to sell the house for less than is owed and the bank takes the loss.
A short sale is an option, but it is at the sole discretion of the lender to take that option. There are time constraints with a short sale, but sometimes they are less significant since it is up to the lender whether they will take the loss.
Luckily, in our current market, short sales are less likely because most houses have equity. In most of Florida, if you bought your house sometime before 2021, you probably have equity in your home. This applies as long as it is in good condition and has not incurred any major damage. However, the market is shifting and prices are starting to come down a little.
One complication with short sales relates to Private Mortgage Insurance (PMI). Private Mortgage Insurance usually occurs when you did not pay a 20% down payment when you purchased the house. If you have Private Mortgage Insurance (PMI) on your property, you will have PMI payments every month.
Most private mortgage insurance policies will not allow the bank to take a short sale. In this case, the bank would not get covered. This means they would not be able to use their mortgage insurance policy to cover the difference between the short sale amount and the money owed.
If you have private mortgage insurance, the lender has no incentive to work with you on a short sale. This is because the bank will be paid if more money is owed on the property than they receive at the foreclosure.
With private mortgage insurance on the home, the bank can request that the private mortgage insurance company pays them the difference between the amount of money received and the amount of money owed.
For example, imagine that the final judgment for a house, or the amount still owed, is $100,000. The home sells for only $80,000 at the foreclosure sale. In this case, the private mortgage insurance company would pay the bank the difference of $20,000.
If the bank takes a short sale, they would not receive this difference or be able to make a private mortgage insurance claim. It can be very difficult to get a short sale because the bank is unlikely to agree to something that will end up costing them money.
What Is A Deed In Lieu?
Like a short sale, a deed in lieu is when the lender agrees to take your home back in exchange for not filing a foreclosure. The only benefit for the borrower is that a deed in lieu could help stop damage to your credit.
Because there are few benefits for the homeowner, we recommend taking other actions as opposed to a deed in lieu. For instance, you could rent your home out to help pay for it, or just stay in your home and wait out the foreclosure.
What Happens If The Bank Sells My Property At A Foreclosure Sale?
Once the bank takes your house at the foreclosure sale, unless they did it wrong, there is usually no getting it back. However, there are cases where it was done incorrectly.
There are statutory requirements for the lender to advertise appropriately and for the Clerk of Courts to advertise the judicial sale appropriately. Additionally, the lender is required to properly foreclose on your home. When this is done wrong, it can result in a foreclosure judgment that is void.
At Dubyak Law Firm, we can review your final judgment and determine if you had a void or voidable foreclosure judgment against you. Unfortunately, if all foreclosure procedures were performed properly, it is usually too late for anything else to be done.
How Quickly Can I Lose My Property In A Foreclosure?
It is important to keep in mind that if you do nothing, the bank will foreclose on your home. This can be done in as little as 90 days from the date of the complaint being served on you. The foreclosure process can move very quickly if nothing is done to delay it.
Only 21 days after you get served with the complaint, the lender can move for a judicial default. They could file a motion for summary judgment or a motion for default judgment against you within a week of that time.
The next step is a court hearing, which can happen as soon as 20 days from when they filed their summary judgment or their request for a final hearing. After the hearing, your house could be gone in as few as 30 days.
With an attorney defending your case, it is not uncommon for the foreclosure to be delayed for several years. Hiring a foreclosure lawyer can significantly extend the process, and buy you time to figure out your options.
What Happens During A Foreclosure Trial? While The Foreclosure Is Happening, Can I Still Live In My Home?
Even though you may be in the foreclosure process, it is still your home. You own it and you get to use it, just as you did before the foreclosure.
However, your home is still subject to a mortgage, which means the bank has a lien on your property. During the foreclosure defense process, we have to determine if the lender that has the lien on your property is actually the lender that is foreclosing you.
The most important thing that a bank needs to prove during a foreclosure trial is that they have standing, or the right to sue. A foreclosure case is essentially the bank claiming that they are owed money by the borrower, and that they are the proper entity to which the money is owed.
Part of our job as the foreclosure defense is to question whether the lender is the right lender, or suggest a lack of standing, meaning the lender cannot prove that they have standing. While it may seem easy for the bank to prove standing, it is not always so simple. For one thing, loans are frequently sold multiple times, and your loan could have been sold to another lender.
In order for the lender to prove they have standing to sue, they have to show that they had standing at the beginning of the foreclosure case as well as the end. It is not uncommon for lenders to sell your loan during the middle of a foreclosure. This works in favor of the defendant because the lender would have to bring to trial someone from both the first lender and the second lender.
The next thing the bank must show is how much money is owed. They are supposed to have all the records of every payment that you made, plus every payment that they made on your behalf. Often, these records are incomplete.
While the bank is allowed to have a certain amount of incomplete records, if their records are too incomplete, they can be deemed inadmissible. If the amount of money owed cannot be determined, the lender cannot close on you.
With the guidance of a skilled attorney for Foreclosure Cases, you can have the peace of mind that comes with knowing that we’ll make it look easy. For more information on Foreclosure Law in Florida, an initial consultation is your next best step.
