When homeowners fall behind on mortgage payments, banks may issue a foreclosure. However, the process must be conducted legally, and homeowners have rights under the law. Knowing how foreclosure works in Florida can help make homeowners aware of any illegal activities.
Mortgage basics and loss mitigation
Lenders issue mortgages to borrowers with the home as collateral. While lenders commonly attempt to initiate a foreclosure for nonpayment, they can issue a foreclosure notice if the borrower failed to meet certain requirements. The most common reason is the failure of the owner to pay property taxes.
Usually, the original lender does not handle the foreclosure, so the homeowner may get a notice from the loan servicer. The loan service manages the account and should discuss loss mitigation with homeowners 36 days after a missed payment and any missed payments after that.
The servicer should discuss ways to stop the foreclosure with the borrower during the discussion. After 45 days have passed after a missed payment, the servicer should send the borrower information about the available options to help them. The servicer commonly cannot start the foreclosure process until the borrower runs 120 days behind on payments.
Breach notice rights
A homeowner has the right to get a breach notice stating he or she is in default. The letter should include what caused the default, ways to clear it and get the loan reinstated, and a date to complete the default.
The letter must also give the borrower at least 30 days to clear the default, and failure to do so will lead to the selling of property. Clearing the default commonly requires homeowners to pay the full amount past due. These notices may be sent by registered mail, and the homeowner should get a Fair Debt Collection Practices notice with the breach notice, or it may be sent separately.
Laws prevent lenders from doing whatever they want when a borrower falls behind. Sometimes, they don’t follow the law, so a foreclosure defense becomes necessary.