When a mortgager begins to fall behind on payments, the “do nothing” approach is inadvisable because of the serious issues it could cause for the borrower. From the moment one is served with a notice of default, enlisting the help of an experienced West Palm Beach foreclosure defense attorney is essential for securing the optimal outcome.
1. Prevents Lender From Obtaining Automatic Default Final Judgement
Taking the necessary steps to defend a foreclosure in Florida is the only chance a mortgager has of staying in his or her home, aside from filing for bankruptcy. If no action is taken by the debtor, the lender receives an automatic default final judgment. This gives the bank the right to repossess the home, leaving the homeowner with no opportunity to uncover issues which may make the foreclosure unjust. These might include:
- Unconscionable terms within the mortgage that contributed to one’s missed payments, such as a hidden balloon payment
- Ignored protections, such as those for service members on active duty
- Neglect of procedural requirements, such as providing a notice of default before taking foreclosure action
- A significant error made by the lender, such as failure to properly document payments made
- Lender lacks ownership of the mortgage entirely
- Violation of the Truth in Lending Act or Home Ownership and Equity Protection Act, which protect borrowers from predatory lending practices
2. Provides Access to Foreclosure Alternatives
Even those who do not qualify for one of the aforementioned defenses can benefit from defending a foreclosure action. Doing so opens the door to a number of alternatives that are far more favorable than a completed foreclosure. Some alternatives one should explore with a West Palm Beach foreclosure defense attorney are:
- Loan modification — ideal for those who wish to stay in their home
- Refinancing — seeking out a loan with better terms
- Short sale — selling the home for less than the balance remaining with approval from the lender
- Deed in lieu — grants the lender the deed to the home in exchange for a halt to foreclosure action
3. May Protect One’s Financial Future
If foreclosure is avoided, the borrower avoids a slew of other future disruptions. For starters, if the homeowner resides in the home, he or she will not have to arrange other living accommodations in a hurry. Additionally, there are some significant fees the debtor can avoid as well. When a home is sold at a foreclosure sale in Florida, the lender can seek a deficiency judgment against the borrower for any remaining balance not satisfied for the purchase amount. If this amount is waived, the previous homeowner will face tax consequences for the “forgiveness of debt.” Finally, a completed foreclosure action will further damage one’s credit score, which has likely already suffered due to delinquent payments. The foreclosure will remain on the individual’s credit report for seven years, unless the former homeowner goes on to file for bankruptcy.
If you are facing a foreclosure, the time to mount your defense is now. Contact Kelley & Fulton today to schedule a free, no-commitment consultation: (561) 491-1200.