In Florida, mortgages must be foreclosed by filing a lawsuit in court. As in any lawsuit, the borrower must be served with notice of the lawsuit and must be given an opportunity to appear and defend his or her rights. The lender will try to show that the borrower is in default, and that foreclosure is therefore necessary under Florida equity law. Florida is unusual in that the legislature has passed very few statues regulating foreclosures. Most of the law on the subject of foreclosures in Florida is found scattered in dozens of cases. The basic statue, chapter 702.01 reads as follows:

All mortgages shall be foreclosed in equity. In a mortgage foreclosure action, the court shall server for separate trial all counterclaims against the foreclosing mortgage. The foreclosure claim shall, if tried be tried to the court without a jury.

Counterclaims by a borrower may be tried to a jury, but they must be tried separately from the main foreclosure lawsuit.

In Florida because the lawsuit to foreclose on a borrower is a suit in equity, it is impossible to obtain an injunction to stop what is, in essence, a court ordered sale. In addition, the court can order the sale at a low price. A sale can be set aside if there is an error in the procedure to foreclose; however, it cannot be set aside due to the low sale price. The court order commanding foreclosure will specify how the foreclosure must take place, and the foreclosure must take place on those terms.

After the sale takes place, the court that ordered the sale must confirm the sale terms. If the terms of the sale order are met, title in the buyer’s name can become complete by filing a certificate of title. At the discretion of the court, junior lien holders can redeem the property, up to the time of the confirmation of the sale. The equity of redemption is cut off when the sale is confirmed, but it exists prior to that time, which means the borrower can save the property from foreclosure by coming up with the money before confirmation.

It's a two-step process: Pre-foreclosure and Formal foreclosure.

Pre-foreclosure

1.       You miss a payment (usually it take 3 or 4 missed payments to kick off a foreclosure process)

2.       The bank sends you late notices and, if you fail to respond, they attempt to contact you (in writing or by phone) to resolve situation.

3.       You continue to miss payments and, you and the bank, fail to agree upon payment arrangements.

4.       The bank invokes the acceleration clause and demands the mortgage or lien be paid in full. Now you are legally obligated to immediately pay the full amount plus back interest, late fees, and any legal fees incurred by the lender.

5.       You have made no payments or arrangements acceptable to the bank.

Note: Once you reach this stage, the bank will not accept your regular monthly payments but will instead, demand much more to bring your loan current.

 

Formal Foreclosure Process

1.       You receive a formal foreclosure notice, either by certified mail, or in many states, by the local sheriff.

2.       The lender begins foreclosure action in court.

3.       Legal notices are published in local papers.

4.       You still have not been able to reach a payment or settlement arrangement with the lender.

5.       Your notice and waiting periods expire.

6.       The court holds a hearing regarding the bank's claim.

7.       The court issues a foreclosure order. This gives the bank the legal right to sell the home.

8.       Legal notice of actual foreclosure sale and advertisements published in local papers.

9.       You still have not been able to reach a payment or settlement agreement with the lender.

10.   The house is sold at auction to the highest bidder or not sold and the bank take possession of the home.

11.   You move out or the bank or new owner evicts you.

You are notified of any debt still outstanding as a result of the sale. (i.e. the home is sold for less than you owe)

Deficiency

A separate action for a deficiency must be filed within four years after the foreclosure sale.

Options after I receive a Foreclosure Notice CLICK HERE