Each state has a different procedure for how banks may begin foreclosing on a home. As noted by Experian, Florida’s statutes require lenders to follow a judicial foreclosure process. A bank must file a complaint with the court and obtain an order to start a foreclosure proceeding.
If you fall behind on your mortgage payments for at least 90 days, you may receive an official demand letter from your bank. It may explain that the bank plans to file a lawsuit through the court to start foreclosing on your home. Demand letters, however, typically offer borrowers the chance to avoid legal action by paying their unpaid mortgage bills.
Responding to a demand letter
According to the U.S. Department of Housing and Urban Development, a demand letter states how much a borrower’s mortgage has fallen behind. Demand letters generally offer borrowers 30 days to send in the stated amount to catch up and prevent foreclosure.
A lender may also offer an option to work out a payment arrangement. As reported by U.S. News, borrowers experiencing temporary financial struggles may request a mortgage loan modification. If approved, a lender may reduce your monthly payments and allow you to keep your property.
Responding to a sheriff’s notice
Before a lender auctions property, an attorney schedules a sheriff’s sale, which is the official date of a home’s foreclosure. A sheriff posts a notice on your door and a local newspaper may publish the sale. During this time, you may continue residing in your home, as noted by HUD.gov. Your lender may also work out a payment plan to prevent foreclosure by catching up on unpaid balances.
A foreclosure involves a series of steps that a bank must take before auctioning property. If you receive a demand letter, you may avoid losing your home by discussing several options with your lender.