Contact Us Today For A Free Quote!
Foreclosure Defense/ Loan Modification
Explaining the legal foreclosure process:
There are many factors that go into the entire home foreclosure process in the state of Florida. The following explanation is meant to explain the legal aspect of how a foreclosure case proceeds, from start to finish. This explanation is not meant as the be all and end all of each and every case. Each person’s case and circumstances are very unique. There may be certain facts in your case that would lead to a valid defense in a court of law. I am available to offer you a free consultation to look at the unique facts of your case.
W. Scott Van Ness Esq.
If you are interested in an appointment, please give our firm a call at (941) 922-0828 or e-mail me at scott@abeltobaygo.com and schedule a free consultation.
STEP 1: The creation of a relationship.
The first step in the legal process of a loan foreclosure is to establish that there is a right by someone (usually the bank) to require you to repay a certain sum of money. This is usually accomplished when you either purchase a home and borrow some money or borrow some money to refinance your home.
When you initially closed on your home (or refinanced the mortgage) you signed a bunch of papers. Two of these documents are what create the potential to eventually file a lawsuit against you. The first is the promissory note. This piece of paper represents an agreement where one person (or more than one person) borrows a certain sum of money and agrees to repay it over time to another person (or entity, usually the bank). The terms as to how and when the money is to be repaid, as well as any interest rates and other fees are included in this promissory note. The second piece of paper is the Mortgage. This piece of paper secures the promissory note against a piece of property. What this means is that if you fail to meet the agreement to repay as outlined in the promissory note, then you are agreeing that the lender (usually the bank) can take your property in at least partial repayment of the money you borrowed. Notice that I say “partial repayment.” If the property value has gone down, the value of the property may not be enough to repay the entire amount that you borrowed. If this happens the lender may have the right to collect the rest of the money from you after the sale of the home. Another thing that I will mention here is that there are many state and federal regulations that apply to certain people and certain companies governing when, where and how they are permitted to make loans. Failure to adhere to these regulations and laws may impair the right of that person or company (i.e. bank) to eventually be permitted to sue you in court to try and enforce the note or mortgage.
STEP 2: Default
The lender will not have a right to foreclose on your home unless there is a default under the terms of the note and/or mortgage. This usually means that you missed a payment; however, it could be triggered by a failure to meet any of the terms both you and the bank agreed to in the note and mortgage. Most notes and/or mortgages have provisions that mandate that the borrower maintain insurance on the property, pay all property taxes when they are due, not sell the property without paying off the lender, and in many instances to keep the property properly maintained.
Most foreclosure lawsuits are initiated due to a failure to make a payment on time. The process for when these payments are to be made, when they are late and when you may be in default are unique to each note and mortgage. Although many notes and mortgages contain similar language, your case will not be dictated by what “most” notes and mortgages say, but on what “your” note and mortgage says. STEP 3: Notices and Acceleration I will continue to state that each note and mortgage is unique. I can write here what most notes and mortgages do say, but yours may or may not say the same thing. It is important to read the terms of the note and mortgage that you signed and that you agreed to. These documents control what happens in your unique situation. I used to close loans for banks and mortgage companies. I spent over 6 years reading these documents and the requirements placed in them. I have been practicing law for over 18 years. I can read your individual note and mortgage and give you a legal opinion as to what they say.
Most (remember your loan is unique) loan documents require that the lender give you some kind of formal notice that you are in default on the loan and give you a certain amount of time (typically 30 days) to cure the default or to fix the problem. If you are able to cure the default (usually make up the missed payment) within the time given in the formal notice then the loan is no longer in default and there is no more problem.
In addition to the notice of default, most (again not all) loan documents provide that the lender has the right to call the entire outstanding balance of loan due once it is in default and the default has not been cured within the prescribed time. This is usually a requirement that must be done prior to having the right to bring a foreclosure lawsuit against you. If this has not been done properly the lender may not be allowed to bring the suit against you and you may be able to have the judge throw it out of court.
Step 4: You are properly served with a foreclosure lawsuit
Once all of the conditions have been satisfied that there is a proper loan, a default and that all other conditions have been met that are required under the loan documents, then the lender (bank) generally has the right to bring a foreclosure lawsuit against you. The bank usually hires an attorney prior to this point and you most likely have received some letter or letters from the attorney.
The lawsuit is filed in the circuit court in the county where the property is located. A duly authorized process server is then hired by the lender to properly serve you with the complaint and any attachments. I mention all of these items because there are many legal requirements that go into what must be included in the initial paperwork, how it is filed and how it is served on you. If all of these requirements are not met, then there may be various legal options that can be taken. HOWEVER, MANY OF THESE LEGAL OPTIONS AND/OR DEFENSES MAY BE WAIVED IF THE FIRST THING YOU DO IS NOT THE RIGHT THING TO DO.
Remember, at this point in time the bank has hired an attorney to represent them. Even though you may be talking with someone from the bank and may be attempting to negotiate a loan modification, may be in the process of trying to sell your home, or may be trying to reach some other agreement with the bank, none of those things changes what happens in the legal proceedings.
Step 5: You respond to the foreclosure lawsuit
Once you are properly served with the lawsuit you have 20 CALENDAR DAYS TO FILE A RESPONSE WITH THE COURT. I can not emphasize this enough. The response you make needs to be a legal response filed with the court. There are laws and rules of court that specifically state what happens next. Some of these rules and laws say that if you do not specifically raise certain defenses at the right time, you will not be permitted to raise them later.
Sending a letter to the judge stating that you have a hardship or that you are trying to sell your home generally do not rise to the level of a proper pleading. However, depending what you say in the letter the bank attorney may try to argue that you did file a response and waived certain defenses.
ONCE YOU ARE SERVED WITH A LAWSUIT, CALL ME (SCOTT VAN NESS AT (941) 922-0828 OR E-MAIL ME AT SCOTT@ABELTOBAYGO.COM TO SET UP YOUR FREE CONSULTATION SO I CAN HELP YOU.
STEP 6: THE COURT CASE
There are generally two ways a foreclosure lawsuit proceeds in court. Here in our area, as well as many areas in Florida and across the state, the courts have been swamped with foreclosures. They have been clogging up the courts for several years now. As a result, the various judicial circuits (as well as the states) have tried to come up with ways to deal with the volume of cases.
OPTION 1: YOU DON’T DO ANYTHING
If you choose not to file the appropriate paperwork with the court, then after the twenty days expires the bank can file a request to have the clerk file a default. This basically then means you are agreeing with everything they filed. The courts in this area have then set up a process known as the “rocket docket.” In order to speed up the system and clean out a back log of uncontested cases the judges set up a system where they set 200-300 cases for hearing and basically have the bank attorney come in with the paperwork and in a matter of a couple of hours they will enter the order that tells the clerk to sell your home. 30 days later your home will be auctioned and you will be out.
OPTION 2: YOU HIRE ME AND WE DEFEND THE CASE
Although each case is unique we can almost always find some mistake in the paperwork the bank filed. However, even if there is no mistake, if you file an answer or just deny the bank’s allegations, the case will now move through the normal court system. As you know the court system is very overworked right now. The case will now at least take a little while longer than the rocket docket course.
I often have clients ask me how long it will take. This is not an easy question to answer because it depends on several factors. Things like how aggressive the bank attorney is, what kind of mistakes we can find, how backed up the court system becomes. What I can tell you is it can range anywhere from several months to several years.
PROCESS: HEARINGS AND TRIAL
At some point in time the bank will try and file what is called a motion for summary judgment. If this is granted, then the home is usually sold within 30-60 days. If it is denied, then the case will proceed on to trial. Depending on how much discovery (exchange of documents, court motions, depositions, etc.) takes place the case could now take several months to get ready for trial.
If the bank has to go to trial they now have to prove that they own the promissory note and mortgage, that you signed them, that you are in default and that they have met all the legal requirements necessary to win the law suit they filed.
If the bank wins the case, the court will enter an order directing the clerk of court to sell the home. Once the home is sold there may be a determination that the sales price was or was not enough to cover how much you owed (plus attorney fees, costs, etc.). If there is not enough to cover what you owe, then in some circumstance the bank can get a judgment against you for the difference.
If there is a judgment against you for the difference (usually referred to as a deficiency judgment), then the bank can then use the court system to possibly force the sale of some of your other assets to pay what is owed to them. They may also be able to garnish your bank accounts.
DON’T LET THIS HAPPEN TO YOU WITHOUT KNOWING YOUR OPTIONS. CALL ME TODAY, W. SCOTT VAN NESS, AT (941) 922-0828 OR E-MAIL ME AT SCOTT@ABELTOBAYGO.COM FOR A FREE CONSULTATION.
YOU CAN ALSO VISIT READ MORE INFORMATION ON MY BLOG AT WWW.CHRISTIANFORECLOSURE.BLOGSPOT.COM
