In life, situations arise that you just don’t plan on. These situations can affect your ability to pay your mortgage on a timely basis – loss of employment, sickness, excessive debts, incarceration, mounting bills, etc. Lenders are not concerned why you’re unable to pay your mortgage – they just want their money and they’ll foreclose on your home to recover the money they’re owed. Obviously, this is not what you want and the idea of going into foreclosure can be scary, stressful, leaving you on an uncertain path to find solutions to stop your foreclosure – and sleepless nights. Below are some ideas to consider on how to stop your foreclosure in Florida.
You have very little time
Don’t avoid the problem. The first time you miss a mortgage payment you know there’s a problem. Don’t fall into the trap of denial and avoidance. Get proactive. Don’t wait for things to get worse before you start looking for solutions; make the decision now and avoid losing your home. Many options exist to stop foreclosure in Florida and you need to know your options and the choice that makes the most sense in your situation. Let’s find a solution now.
Who should I hire? An Experienced Real Estate Investor or a Realtor?
Real Estate Investors prefer buying houses before the foreclosure process is complete. Why? Once the foreclosure is completed, you’ve lost the house for good. When selling your house to a real estate investor, you can sell your house fast and you just might walk out of your situation with some profit. Even selling your house for little or no profit is better than losing the house completely to the bank and further affecting your future ability to obtain credit. Real estate investors deal in distressed properties and distressed situations all the time, so they can provide you with tips and offer realistic solutions on how to stop home foreclosure.
There are many specialized real estate professionals in Florida that are not necessarily Realtors. Real Estate Investors are specialized. Realtors are basically looking to make a commission on the sale of your home, and they are trained to market your house for the most profit. Their services are useful when the seller is not in distress. Unfortunately, you’re in distress and you don’t have the luxury of time…the clock is ticking, and you need a solution now from someone who does this on a daily or weekly basis. Most Realtors are unaware of the strategies we employ to help you. That’s why you need a real estate investor
Free Resources to Educate Yourself on Foreclosure Sale of Your Home
Florida and most states as well as federal government agencies such as HUD (Housing and Urban Development) have online resources with information on how to stop foreclosure. These agencies offer workshops and financial planning resources that you may find useful. However, beware of scams with people or companies offering to “fix” your problem for money in order to stop your foreclosure without a written agreement. There have been many instances of people being scammed and ending up in worse shape than before, losing more money and their house!
The Florida Law on Foreclosure
In Florida, foreclosures are judicial, which means the lender (the plaintiff) must file a lawsuit in state court. The lender’s attorney initiates the foreclosure by filing a complaint with the court and serving it to the borrower, along with a summons that provides 20 days to file an answer. If you don’t respond to the lawsuit by the deadline, the lender can ask the court for a default judgment. On the other hand, if you file an answer, then the lender can’t get a default judgment. Instead, it will likely file a motion for summary judgment. Unless you have some defense or counterclaim that would justify or excuse your nonpayment, the lender will likely win the motion for summary judgment and the court will render a final judgment of foreclosure. But if the judge denies the lender’s motion for summary judgment—say you have a potentially legitimate defense to the foreclosure—the foreclosure will proceed to discovery and trial. If you lose at trial, the court will enter a final judgment of foreclosure against you. You should know that the timeline for foreclosure in Florida is typically 180 days. You can also take advantage of the Equity Right of Redemption to save your home within the 180 days.
Short sales are usually initiated by the homeowner when the value of a home drops by 20% or more. This is the definition of “being upside down”. Before the process can begin, the lender who holds the mortgage must sign off on the decision. Additionally, the lender, typically a bank, needs documentation that explains why a short sale makes sense. After all, the lending institution could lose money in the process.
If approved for short sale, the buyer (competent and experienced real estate investor) negotiates with the homeowner first and then seeks approval on the purchase from the bank second. It is important to note that no short sale may occur without lender approval.
Short sales tend to be lengthy and paperwork-intensive transactions, taking up to a full year to process. However, they are not as detrimental to a homeowner’s credit rating as a foreclosure is. A short sale looks better to future lenders and creditors. It shows that the person acted before the bank moved to repossess the home. A homeowner who has gone through a short sale may even be eligible to purchase another home immediately
If you are contemplating bankruptcy, most qualified and experienced Bankruptcy Lawyers will offer you a free consultation session to assess your current financial situation and suggest possible alternatives to bankruptcy. It is critical to act quickly because when facing a home foreclosure or other urgent financial issue there comes a time when it is just too late, and you have no recourse. Two of the most common types of bankruptcies are Chapter 7 and Chapter 13.
Chapter 7 is known as “liquidation” as opposed to “reorganization” of Chapter 13 and other forms of bankruptcy. It is the most common form of bankruptcy because it is a “fresh start.” Most debts are discharged, and you can keep certain exempt property. Child support, certain taxes, and student loans are generally not dischargeable. Secured debts are those attached to a piece of property such as a car or home. These items may have to be surrendered. Credit card-debt discharge may be possible, as it is unsecured by any property. Creditors must immediately stop attempting to collect debts and must contact your attorney instead of you. Another disadvantage is that a Chapter 7 bankruptcy stays on your credit report for 10 years, as opposed to seven years for Chapter 13. You must undergo budget and credit counseling prior to filing.
Chapter 13 bankruptcy is often a possible solution for clients who are currently working, either as an employee or are self-employed, and who wish to pay off their outstanding obligations without losing certain assets or properties. This form of bankruptcy can quickly bring relief. Initially, as with any bankruptcy filing, an “automatic stay” stops all collection, foreclosure and repossession actions. This allows the time to work out solutions while the bankruptcy moves forward. A loan modification or foreclosure defense may be necessary, and a qualified Bankruptcy Lawyer can negotiate on your behalf during this stressful time. After the bankruptcy becomes final, the client has the opportunity to pay off past obligations over a number of years, which and less-stressful manner