There are various options to choose from when homeowners are facing foreclosure, many of which may not be readily apparent to a stressed-out homeowner. Our West Palm Beach foreclosure attorneys will advise debtor homeowners on all available alternatives and arm them with the strongest defense in the foreclosure process.
Remaining In The Home During Foreclosure
Facing the very real possibility of losing a home can be extremely overwhelming and anxiety invoking. Many people are under the assumption that they need to leave their home immediately once the bank issues a notice of foreclosure. In actuality, remaining in the home during the foreclosure process can provide homeowners with the opportunity to save money. These cases can be lengthy, especially in Florida with an average of 1,166 days to close a foreclosure case, giving defendants the opportunity to remain in the house without mortgage payments during the foreclosure process. Here, our attorneys can help strategize a long term plan for future housing and more affordable mortgage payments. There are certain factors that play a role in the length of time you can remain in the foreclosed house along with the amount of money that can be potentially saved.
When Mortgage Payments Are Stopped: If debtors find themselves struggling to pay monthly payments on-time and admit that these payments are unaffordable, foreclosure may unfortunately be the only option. Once the foreclosure process begins, homeowners will most likely be allowed to stay in their residence during the pendency of the foreclosure.
Applying for Mitigation Options: Loss mitigation consists of many different options that lenders may consider in order to avoid foreclosure or make it less painful for the homeowner. The application for a loss mitigation usually needs to be submitted 37 days before the foreclosure sale. Once the application is sent, the mortgage servicer typically halts the foreclosure to review the application, although that is not a guarantee. Loss mitigation options include loan modification, deed-in-lieu of foreclosure, and relocation assistance payments to name a few.
Judicial versus Nonjudicial: Depending on state law, those facing judicial foreclosures have a longer legal process than nonjudicial cases. In judicial cases, the foreclosure plaintiff files his case in court which then goes through the legal court. Nonjudicial on the other hand is when there is a specific set of foreclosure pursuit instructions laid out by the state, not the court. In Florida, foreclosures are judicial, meaning the plaintiff lender has to file a lawsuit. (LINK TO BLOG).
Short Sale or Deed in Lieu of a Foreclosure
There is the alternative for foreclosure defendants to execute a short sale of their home facing foreclosure. After the short sale is complete, the closeout price will be less than what is owed for the missed mortgage payments. In order for this to be a viable choice, the bank, as well as any other involved parties with active liens, will need to agree to accept the smaller amount and disregard the difference owed.
Additionally, one can sometimes agree to a deed in lieu of foreclosure where the deed of the home is signed directly to the bank—and the bank does not file a lawsuit or dismisses a pending lawsuit. In order to qualify for a deed in lieu of a foreclosure, there cannot be more than one mortgage or lien on the house. Our experienced foreclosure attorneys suggest obtaining experienced legal help that can help you navigate the often complex different loss mitigation options.
Chapter 13 Bankruptcy
A debtor can file for Chapter 13 bankruptcy to have an automatic stay go into effect, immediately stopping any mortgage foreclosures. Immediately after, the borrower is required to present a plan that outlines the amount of time that it will take to pay back the missed mortgage payments. In order to halt a mortgage foreclosure, those in debt must provide proof that they have sufficient funds to meet the demands of the new payment plan.