Foreclosure laws and procedures vary from state to state. For example, California and Georgia are Non-Judicial states while Florida is a Judicial state. In judicial states, the lender must file a foreclosure complaint in Court and follow the court foreclosure process. Non-judicial states do not require any court action to foreclose. All that is required is written notice provided to the homeowner once the loan is delinquent. If your property is located in a non-judicial state, it is important to contact an attorney as soon as possible to avoid a foreclosure sale. The following provides a general timeline of the foreclosure process in judicial states such as Florida.
Missing 1st, 2nd, and 3rd Payments
Once you have missed your 1st payment the lender can start the foreclosure process; however the lender generally does initiate foreclosure until after you have missed at least 2 or 3 payments. However, after the 1st missed payment, expect multiple phone calls from your lender inquiring about the missed payment until the total payment is made.
There is often a misconception that if a client misses one or two payments but then makes a payment to “catch up”, they are current with their loan and are no longer at risk for foreclosure because they didn’t miss 3 payments consecutively. This may not be the case because your payment was likely applied toward late fees and not towards one of the missed payments. When you fall behind on your payments and you finally are able to make your next payment, it is important to find out 1) the correct balance you currently owe and 2) whether your recent payment is being applied to your missed payments or late fees.
Another common misconception is that you are in foreclosure once you receive a phone call or letter in the mail from your lender or your lender’s collection’s agency that states you are now in foreclosure.
Served Foreclosure Papers
When you are legally in foreclosure, you will be personally served a packet of information which is called a Summons, Lis Pendens, and Complaint by an officer of the Court. From the day you are served with these papers you generally have 20-30 days to file a response or answer with the court and with the attorney that is listed on the papers.
If you do not respond within those 20-30 days the lender’s attorney may file a Motion for Default as well as a Motion for Summary Judgment.
Motion for Default
This is a motion that is usually filed by the lender if you have failed to respond or answer within the 20-30 days that is required by the Court. If the judge grants this motion you have waived your right to respond or contest any issues in the case.
Motion for Summary Judgment: This motion will follow the Motion for Default. If the judge grants the Motion for Summary Judgment he will generally set a sale date on your home which can occur at a minimum of 30 days from granting Summary Judgment.
When the sale date is set you are now in one of the final stages of losing your home. There is an auction that will take place where the public is permitted to bid on your home. Your home will then be sold to the highest bidder.
After the house is sold at the auction, in the state of Florida the lender can pursue you for the deficiency, or difference between the remaining balance you owe on your home and the price your home sold for at auction.
Motion for Deficiency Judgment
This is a motion that the lender will file with the courts. If this is granted by the judge they can come after you for the deficiency.