Florida Foreclosure Process

The Florida foreclosure process falls under a judicial proceeding, meaning the foreclosure is carried out through the court system. It starts when a homeowner fall behind on payments, and repeated letters from the lender fail to elicit a response. A notice of default is sent out as a final attempt at communication, and if this still does not prompt the buyer to catch up the loan, the foreclosure begins.

Once a Lis Pendens is filed, if there is no response, the foreclosure can move quite quickly to conclusion; the county clerk can declare the mortgage in default and the lender can request a final ruling from the court.

If the buyer does reply to the filing, a hearing is normally scheduled which can buy enough time to make arrangements with the lender or execute a short sale of the property approved by the lender to settle the debt. A short sale is typically a sale of the real estate for less than is what owed, but the lender accepts the amount as payment in full.

At the summary judgment hearing, unless the buyer can provide reason to be given more time, the court will hand down a ruling in favor of the lender. A sale date for the foreclosure auction will be set, which will generally fall 30-45 days after the hearing. The property will be sold at auction to the highest bidder who must show a 5% deposit and be able to pay the winning bid amount in full by the end of the day.

Once the certificate of sale has been filed, the buyer has no redemption rights to the home. Even if no-one bids on the house, the certificate will go to the original lender, who becomes the owner. A ten day period allows the courts to review the sale in cases where it is suspected that bidders colluded to prevent a fair auction; if this is found to be the case, another auction is held. The lender may file for a deficiency judgment against the former homeowner if the sale price of the home is less than the original total loan amount.

If arrangements can be made before a Lis Pendens is filed, it is much easier to come to a favorable settlement.

However, there is still hope for a satisfactory outcome up to the date of the sale, whether by securing another lender's backing to refinance the home, securing a home loan modification , or even arranging a short sale. If the last option is chosen, it should be put in writing that the lender will cancel any remaining debt owed.

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