Can someone explain the mortgage foreclosure process?

by oliver on September 30, 2010

Question:

Can someone explain the mortgage foreclosure process?

Florida. Also, can a mortgagee put a lien on other assets if not used as security in that mortgage?

Answer:

The process of foreclosure varies by state but here is the general flow of the process. First, the lender files for a foreclosure against the borrower if the latter is behind his payments for at least 3 consecutive months. A notice of foreclosure or default is sent to the borrower, informing him of his debt and an upcoming foreclosure. The borrower is given ample time to make his mortgage payments current. During this time, the borrower may also work out an agreement with the lender to settle the situation without having to continue foreclosure.

However, if the borrower was not able to make his payments current and was not able to make an agreement with the lender, a notice of sale is issued. This notice is usually given about 21 days prior to the date of sale of the house. In the auction, the person or party who gives the highest bid to the property wins the right of ownership. The new owner may then request for an eviction process, in order for the previous owner to be removed from the property. In some states, the lender may file for a deficiency judgment in order to get the difference amount, in case the highest bid is less than the total amount that the borrower owes.

{ 1 comment… read it below or add one }

Frederick A. Neustein December 7, 2010 at 9:25 pm

In the State of Florida, the foreclosure process is just like it would be for any other lawsuit. Florida is a judicial process state. This means that the Bank is required to file a lawsuit. The process does not begin until you are actually served with the initial Summons and Complaint. Once being served, you have 20 calendar days to file your initial “response” with the court and to the bank’s attorney. This “response” can take the form of an Answer, Motion to Dismiss, or other motion. From that point forward, you are entitled to begin the “Discovery phase” of the litigation. The “Discovery” phase consists of requests for information in the form of documents, questions, Requests for Admissions, and depositions. Your litigation strategy can vary depending on your individual circumstances, the facts surrounding your case and your attorney. Depending on your attorney’s strategy, defenses, and whether or not there are any counterclaims, the foreclosure process can take one to two years on average; three years is not unusual.

The lender may NOT place a lien against any other assets, unless they first get a judgment of foreclosure. THEN they must obtain a deficiency judgment which takes much more time and expense. Historically, Banks rarely would pursue a deficiency judgment unless they know you are an investor with several investment properties and other collectible assets. If the bank is successful obtaining a deficiency judgment, then they may place a lien or other assets with the same ownership as the judgment debtor. However, there are many steps youi can take to protect these assets. The state of Florida is a Debtor’s Haven and there are many steps you can take to protect your assets.

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