Answers To Five Common Foreclosure Questions
1) What is a foreclosure?
A foreclosure is a lawsuit where the lender alleges that the homeowner has defaulted on the mortgage by failing to make his or her monthly payments. If successful, the lender will have the right to sell the property to satisfy the debt owed to the bank. If the property is sold for an amount less than what is owed, the lender can seek the deficiency judgment (for the remaining amount) from the homeowner.
2) Can homeowners defend against a foreclosure?
Yes. Like any lawsuit, the homeowner can raise defenses to prevent the foreclosure. Most of the foreclosure cases these days are defensible. At a minimum, the homeowner can force the bank to prove every element of its case. Thus, if you have been served with foreclosure documents, you should contact a lawyer as soon as possible to ensure that your defenses are properly preserved. Under Florida law, homeowners have 20 days from the date they are served with foreclosure papers to respond to the complaint and raise their defenses.
3) Will a loan modification or short sale stop the foreclosure?
No. In Florida, the lender cannot sell the property until they obtain a final judgment in the foreclosure proceeding. Thus, lenders can, and often do, file a foreclosure action even if you have submitted a loan modification package or the paperwork necessary to conduct a short sale. In other words, lenders initiate the foreclosure process so that they can start the clock running and they can obtain a judgment giving them the right to sell the property. Oftentimes, the loan modification or short sale is a way to settle the foreclosure action.
4) What should I do if I get served with foreclosure documents?
You should contact a foreclosure defense attorney as soon as possible to determine what defenses (and counterclaim) you may be able to raise against the foreclosure. You have 20 days from the date you are served with foreclosure documents to respond to the complaint and raise all the defenses that apply to your case. If you do not respond to the complaint within that time, the lender may obtain a clerk’s default judgment against you, giving it the right to sell your property. In other words, if you fail to timely raise proper defenses, it will be easier for the bank to sell your property.
5) What is a motion for summary judgment?
Generally, a lender will file a motion for summary judgment in order to obtain a final judgment against a homeowner without having to go to trial. In order to succeed, the lender has to show that there is no dispute of material facts and that it is entitled to a judgment as a matter of law. If the homeowner raised valid defenses, the lender will have to factually disprove those defenses or show that they are insufficient as a matter of law. A court will generally deny the motion for summary judgment if there is a dispute of a material fact. Thus, if a homeowner fails to timely raise any defenses, the court will likely grant the motion, enter a final summary judgment against the homeowner and schedule the sale of the property.