Maximum Success, Incorporated;

DBA Planet Earth Realty

Ulrich Leinhase, Florida Licensed Real Estate Broker

Foreclosure Help

Florida Foreclosure Summary

Foreclosure is the legal means a mortgage lender may use to get possession and ownership of a house when the mortgagor does not make their mortgage payments.

Florida is a judicial foreclosure state. The mortgage is the primary security instrument. A foreclosure in Florida is typically transacted within 180 days. Florida has a right of redemption which ends when the property is sold at the foreclosure sale. If proceeds from the sale are insufficient the mortgagee may receive a deficiency judgment.

The foreclosure claim is tried in court without a jury.

The court order of foreclosure will specify how the foreclosure must take place and the foreclosure must take place on those terms. Whenever a legal advertisement, publication, or notice relating to a foreclosure proceeding is required to be placed in a newspaper, it is the responsibility of the lender or their representative to place such advertisement.

Equitable right of redemption ends at the foreclosure sale. There is a period of time after that sale that the court reviews the sale to ensure a fair price has been paid. Basically, this period of time allows parties to object to the sale on the basis that proper procedures were not followed. This period is usually 10 days, after which the Certificate of Sale is filled and title passes, if the sale is confirmed. If the sale is not confirmed, another sale is ordered.

Don’t let foreclosure happen to you, there is a way...

For most Americans the single biggest financial contract they ever initiate is the mortgage on their home. And the ultimate financial threat a home owner (mortgagor) can face is foreclosure.

At first blush, some mortgagors believe foreclosure wipes the slate clean and relieves them of any further financial obligation. So this may come as a major surprise. The IRS requires mortgage lenders to issue a 1099c to all mortgagors they foreclose because IRS regulations consider a discharge of indebtedness by foreclosure as income.

It doesn't stop there. Lenders also report foreclosures to credit bureaus that may carry it on the borrowers credit report for up to seven years. And if they apply for a credit card, a car loan, or another mortgage loan, credit managers do not look favorably at potential borrowers with a home foreclosure notation on their credit history.

The lender takes the outstanding mortgage balance and adds to it all accrued interest, late fees and penalties; any funds advanced like tax payments if the mortgagor's escrow account was insufficient and any other incidentals; and then they add all legal and attorney fees; in this example adding all of these items together, just for discussion, say it comes to a grand total of $265,000. However, at the foreclosure auction sale the highest bidder only offers $245,000 the difference the $20,000 is the deficiency. That $20,000 is entered on the 1099c as income. The full $265,000 is reported to the credit bureau, and if the mortgagee determines the default was a decision by financially able people (those able to make monthly payments, but for various reasons decided to allow the default) the mortgagee will sue for the $20,000 deficiency plus you guessed it legal and attorney fees.

Lenders want to do everything possible to salvage the mortgage relationship. However, the lender may no longer be the actual owner of the loan but is only acting as the servicing agent. The lender my have sold the loan to a national buyer such as FANNIE MAE, FREDDIE MAC, or even a private buyer. They do this so they are able to turn around and use those funds to make new loans.

Even though the original lender may have sold the loan it may still be possible to negotiate a modification of the original loan because a lender or investor may agree to a modification of a loan simply to avoid default.

And finally the greatest threat uniformed mortgagors face is equity skimming. A mortgagor facing the ultimate financial threat trying to sell their home without professional guidance, should be aware of buyers who offer to get mortgagors out of trouble by promising to pay their mortgage payments or promise a large sum of money when the property is sold.

This buyer often suggests the mortgagor move out immediately and transfer title to them. The mortgagor is lead to believe by signing the property over to the buyer they will avoid foreclosure.

However, as soon as the equity skimmer has title to the property they rent the house to someone else, collect rent, and not make any mortgage payments. The lender has no alternative but to pursue foreclosure. In States like Florida, a debtor state, the foreclosure may take more than nine months and the equity skimmer continues to collect rent. Unfortunately, the mortgagor ends up losing everything.

Mortgagors facing the ultimate financial threat are vulnerable, but if they want to save their home they must take immediate steps by contacting their mortgage company; a consumer counseling agency; and fully cooperating with whatever source they call for help; and they must be aware of the equity skimmer.

If nothing is done and the mortgage payments are not brought current, the ultimate financial threat will become a reality.

You may have heard me on the radio or on my TV program giving this advice “If you miss a mortgage payment you should immediately contact your lender and sell your house.” You have to be proactive. Because once foreclosure is eminent it may be too late to try to find a solution.

A foreclosure is a devastating strain on a family. It starts with the loss of a home; ruined credit standing; lower credit rating; making it difficult to make future purchases. Credit card interest rates will go up; your insurance rate for your car will increase; even employers review credit reports before hiring.

If you are facing a financial storm, don’t procrastinate please contact us now. Because bad things do happen to good people if they don’t act quickly.

If you have missed a mortgage payment you should consider selling your house immediately before the second and third payments are missed. This is the time you must be proactive. Because once foreclosure is eminent it may be too late to try to find a solution.

A foreclosure is a devastating strain on a family. It starts with the loss of a home; ruined credit standing; low credit rating; making it difficult to make future purchases. Credit card interest rates will go up; Auto insurance rates will go up; renters insurance will go up; and employers review credit reports before hiring.

Call us today to sell your house the Planet Earth Realty way at 904.891.8589
Ulrich Leinhase, Florida Licensed Real Estate Broker.