Everything You Need to Know About Florida Foreclosure Defense
How does foreclosure work in Florida?
First, federal law requires that you be behind in payments 120 days before your lender can file foreclosure. During this period and at least monthly, your mortgage servicer is obligated to contact you in order to find a way to avoid foreclosure. If that process is unsuccessful, the lender files a foreclosure lawsuit in court. This Florida foreclosure lawsuit alleges that you haven’t paid on the loan (whether due to default or balloon payment or other reason) and asks the judge for judgment in its favor for that amount. At the same time, the lender asks for your rights to be cut off (foreclosed) in the property and for it to be sold at auction in the Florida county that the property is located. The money is then used to pay back the amount owed under the foreclousre judgment.
Sometimes the lender does not ask for a personal judgment in a Florida foreclosure, but the amount of the debt still needs to be determined. This is called an “in rem” action, which means the lawsuit seeks recovery of property only. The other type of claim is “in personam” which means the lawsuit is or also is against a person directly. Those words usually don’t appear within the foreclosure lawsuit, but it’s how lawyers talk about them. When the lender files foreclosure, it will also file a “lis pendens.” This is not done in every state, but is widely available. It is a notice on the Florida county property records for your land that indicates a lawsuit has been filed against the property and serves to put others on notice of that foreclosure lawsuit. Practically speaking, it doesn’t do a whole lot to you as the homeowner, except make it easier for a potential buyer to know you are in foreclosure. In any event, the foreclosure lawsuit is the critical thing you need to be worried about.
Once you are served with the foreclosure lawsuit in Florida, you have 20 days to respond by filing an answer or motion. Generally, you will be filing an answer. If you fail to do that, a default judgment will be taken against you and your property could be listed for sale within about 3 months. Florida offers a fast-track foreclosure process for lenders when a homeowner does not respond or does not present a correct defense. You should be careful what you file in response to the foreclosure lawsuit. Sometimes we see well-intentioned homeowners admit to everything in the lawsuit while requesting leniency without understanding the defenses they have or the law. Politely asking a court to stop a foreclosure is not a defense and the Florida code says that admitting the allegations in the complaint is a reason to grant the fast track process. This requires a final judgment within 90 days. You should not assume everything in a compliant is true (especially ownership) and contact a good foreclosure defense attorney before responding.
Once your attorney has properly answered your foreclosure, you are entitled to discovery. This process can take many months depending on the court and your procedural posture. If you schedule and take depositions, this process can take a bit longer than if it is documents-only.
During the pendency of your foreclosure lawsuit, your attorney will probably also seek a resolution that is consistent with your objectives. For example, you might want a loan modification at a lower rate, or to walk away without facing a deficiency judgment. Our firm has generally had good success here because of the aggressive positions we take in litigation. If your mortgage servicer violated federal law in servicing your loan, your lawyer should also consider a new federal lawsuit under RESPA. This generally gets the lenders’ attention and can provide for damages and attorneys’ fees for you. An experienced foreclosure defense attorney will understand how this process works.
If all else fails and a judge enters judgment against you, your next recourse is to appeal if you have grounds. If that does not succeed and the sale occurs, there will be a couple weeks while the foreclosure paperwork and title certifications are completed. At that time, there will be a process to notify you and ask you to leave your home.
We do not recommend you move out of your home until the foreclosure process is complete, your property is sold, and you receive formal notification that you need to move. This is because you are liable for injury, damage, and code requirements for your property until title is transferred out of your name. It also ensures higher bidding amounts at auction versus if something happened to it, such as vandals tearing out the copper pipes. With a good foreclosure defense attorney, you should be able to reach your objectives without losing your home by default. Contact our Florida foreclosure defense attorneys today!
How Long is the Statute of Limitations for Foreclosure in Florida?
Florida’s statute of limitations to bring a foreclosure action is five years. However, the Florida Supreme Court has effectively lengthened that period to five years after your last mortgage payment is due. While the code is clear that five years is the statute of limitations period, Fla. Stat. Ann. § 95.11, the case of Bartram v. U.S. Bank Nat. Ass'n, 211 So. 3d 1009, 1015 (Fla. 2016), shifted that statute of limitations to reset for each and every payment missed. This reset occurs even if the bank loses the case completely at trial in one foreclosure action, it can still bring another. This appears consistent with the language in FSA 702.08 regarding the effect of setting aside a foreclosure decree. However, your lender may not be able to recover on some of the amounts already litigated if you win your case.
According to the Florida Supreme Court, any alleged acceleration is automatically rewound when the case is over, so the bank can allege another payment was missed, and file another foreclosure. This can continue until each and every payment due for the full 30 years of your mortgage. After the full thirty years has run, then start counting five years to determine when the statute of limitations in Florida to file a foreclosure has run. This appears to apply to actions under the note or to foreclose under the mortgage. However, if you win one foreclosure, your lender may be limited to how much it can recover in a later foreclosure.
What is the Statute of Limitations to file a Foreclosure Deficiency Judgment in Florida?
An action on a deficiency judgment in foreclosure in Florida is one year after the clerk issues the certificate of title. FSA 95.11(5)(h). This applies to residential properties under 4 units. If you give your property back to the bank as a deed in lieu of foreclosure, the period is also one year (unless you settle and the bank waives deficiency).
If the lender does not include a deficiency demand in its lawsuit, it can file a lawsuit after the foreclosure within one year. If the lender includes a deficiency demand in the foreclosure lawsuit, then the one year is irrelevant.
For non-residential properties, the statute of limitations for a deficiency judgment in foreclosure is five years. FSA 95.11(2)(b). That does not begin to run until the final judgment of foreclosure and subsequent foreclosure sale. Chrestensen v. Eurogest, Inc., 906 So. 2d 343, 345 (Fla. Dist. Ct. App. 2005)
How long can a bank collect on a foreclosure deficiency judgment in Florida after it obtains one?
Once a bank has obtained a deficiency judgement, it can collect on it for 20 years. FSA 55.081. In some instances, it can be longer than that.
How do you Calculate the Deficiency Judgment in Florida after Foreclosure?
For a home you own, the deficiency is the difference between the fair market value of the property and the amount of the sale. That means that the amount of the loan does not determine the amount of the deficiency. Even if the loan is hundreds of thousands of dollars more than the home’s value, the deficiency will only be based on the value of the home versus the sale price at auction. Furthermore, the judge in your case has the authority to lower the deficiency or eliminate it, but cannot make it bigger. FSA 702.06.
What does a bank need to include in a foreclosure complaint in Florida?
A plaintiff in a Florida foreclosure lawsuit must state it is the holder of the original note secured by the mortgage, or state specific facts that demonstrate it has the power to enforce the note and sue the homeowner. It must also file a certification under penalty of perjury that it is in possession of the original note if it is not lost (or establish a chain of custody if lost). It must also attach the note as an exhibit to the complaint. FSA 702.015.
The Florida Rules of Civil Procedure require many of the same things as the statute, but also requires the bank verify the complaint under penalty of perjury. Civ. R. 1.115
Do I get a Jury Trial in a Foreclosure Lawsuit in Florida?
Foreclosure is an equitable remedy. FSA 702.01. This means that whether or not the bank gets to foreclose and sell the property is a decision for the judge. You do not get a jury for this part of the lawsuit. However, a claim for money against you is a claim under contract law and should afford you the right to a jury trial if the bank demands money. This would be a legal claim and thus entitle you to a jury trial. However, several courts of appeal have found that an action under the note is an extension of the mortgage foreclosure, and therefore the homeowner does not have a right to a jury trial. Bradberry v. Atl. Bank of St. Augustine, 336 So.2d 1248, 1250 (Fla. 1st DCA 1976); Kinney v. Countrywide Home Loans Servicing, L.P., 165 So. 3d 691, 694 (Fla. 4th Dist. Ct. App. 2015). But see, Hobbs v. Fla. First Nat'l Bank of Jacksonville, 480 So.2d 153, 156 (Fla. 1st DCA 1985). The bank can also enforce a jury waiver if one is present in your mortgage. Goodenow v. Nationstar Mortg. LLC, No. 3D18-1480, 2019 WL 2361804, at *1 (Fla. Dist. Ct. App. June 5, 2019).
(Note: Section 702.01 is unconstitutional to the extent it conflicts with rule 1.270(b) by requiring counterclaims to be tried separately, pursuant to Haven Fed. Sav. & Loan Ass'n v. Kirian, 579 So. 2d 730, 733 (Fla. 1991).)
Can I get my Home Back After the Home is Sold and Foreclosure is Completed?
Once a foreclosure lawsuit has been completed in Florida, the property sold at auction, title transferred, and the period to file appeals has run, then you are not able to reacquire the home unless very specific conditions are met. FSA 702.036. You may only be able to reclaim the property if you were not properly served or if the bank bought the home at auction, among other specific conditions. However, this is practically very challenging and you should consult an attorney. Even if you cannot reacquire the home, you can still sue for damages. FSA 702.036(1)(b).
Where is foreclosure filed if my land covers two counties in Florida?
The bank can file the foreclosure in either county. FSA 702.04.
How Quickly Will A Florida Court Enter Foreclosure Judgment if I Don’t Answer?
Florida law requires a judge enter final judgment within 90 days from the date you were supposed to answer the lawsuit. FSA 702.065. If you don’t answer within 20 days of being served, a default judgment will be entered by the court. Civ.R. 1.140(a)(1). You may request an extension of time to answer from the judge to obtain more than the 20 days.
Can the Bank Get Attorneys Fees in Florida Foreclosure?
Yes, if the note or mortgage provide for them. No hearing required on reasonableness of the attorneys’ fees if the fee request is less than 3% of loan amount. FSA 702.065.
Do Florida Judges Have the Power to Set Aside a Foreclosure Decree?
Yes. “The circuit courts of this state, and the judges thereof at chambers, shall have jurisdiction, power, and authority to rescind, vacate, and set aside a decree of foreclosure of a mortgage of property at any time before the sale thereof has been actually made pursuant to the terms of such decree, and to dismiss the foreclosure proceeding upon the payment of all court costs.” FSA 702.07
What Does the Bank Have to Do if the Note was Lost in a Florida Foreclosure?
It must provide adequate protection. The law requires that a court can order any of the following to ensure adequate protection: (a) A written indemnification agreement by a person reasonably believed sufficiently solvent to honor such an obligation; (b) A surety bond; (c) A letter of credit issued by a financial institution; (d) A deposit of cash collateral with the clerk of the court; or (e) Such other security as the court may deem appropriate under the circumstances. FSA 702.11
Will statements I make in bankruptcy hurt my Florida foreclosure case?
Potentially, yes. A bank may use your statements regarding the lender’s identity, standing, or surrendering your property against you. Florida law specifically states that any statement made under penalty of perjury in a bankruptcy case can be presented by a bank to support their foreclosure lawsuit. FSA 702.12.
What is Florida’s Fast Track Foreclosure process?
Florida’s Fast Track Foreclosure process effectively shifts the burden of proof onto the defendant or face immediately losing their foreclosure lawsuit. You can read the entire law with all its requirements by clicking https://www.flsenate.gov/Laws/Statutes/2013/702.10.
What is a Mortgage in Florida?
A mortgage in Florida is written document whose purpose is to secure the payment of money with real or personal property. FSA 697.01
What is the process for advertising a property for sale after foreclosure judgment?
Once a final foreclosure judgement is issued, the clerk of court will sell the property at public auction. That date must be within 20 to 35 days. FSA 45.031. This period can extended if the lender or their attorney consent to a longer period, such as when reviewing a loss mitigation application under RESPA.
Once the date is set, the date must be published once a week for two consecutive weeks in a newspaper. The second publication must be at least 5 days before the sale. The advertisement must include: (a) A description of the property to be sold; (b) The time and place of sale; (c) A statement that the sale will be made pursuant to the order or final judgment; (d) The caption of the action; (e) The name of the clerk making the sale; and, (f) A statement that any person claiming an interest in the surplus from the sale, if any, other than the property owner as of the date of the lis pendens must file a claim before the clerk reports the surplus as unclaimed. The winning bidder must immediately deposit 5% of the final bid with the clerk of court. The clerk shall indicate the amount of time necessary to pay the remainder, which will include a successful bidder fee under Florida law that is equal to 1.5% of the purchase price (after 3% for the first $500). In Broward County, the Clerk requires the remaining full payment the following business day or Florida law allows for the forfeiture of the entire deposit. Once that is paid, a Certificate of Sale is issued by the Clerk of Court and filed with the clerk. If no objections to the sale are filed within 10 days, the Clerk files a Certificate of Title. This document acts to confirm the sale and no further action is needed to transfer the property to the new buyer. FSA 45.031
Is there a right of redemption in Florida foreclosure proceedings?
Yes, the right is absolute if the judgment is paid in full, along with costs, fees, and attorneys’ fees to the creditor. FSA 45.0315
What Rule governs the posting of a supersedeas bond in Florida?
FSA 45.045 and Florida Rules of Appellate Procedure 9.310 govern supersedeas bond requirements in Florida.
How is the minimum bid set in a Florida foreclosure?
There is no minimum bid requirement for a Florida auction to sell a property through the foreclosure process. Practically, however, a bank is allowed to credit bid up to the amount of its loan. Thus, even if there is not another bidder for the property, you could be bidding against the bank until their judgment is satisfied. The bank has no incentive to bid over its judgment about because any excess proceeds pass to the homeowner (who needs to request it). Also, buyers need to be cautious about buying a property at sheriff’s sale without doing research as to other recorded liens or judgments. A sale can be ordered subject to other liens, meaning the buyer inherits those costs along with the property.
A good foreclosure defense attorney can explain the process and find ways to help. Call us today at (888)200-9824.