Foreclosure and the 120 days for “first notice or filing” in Florida. 

Florida – July 28, 2022

The foreclosure process begins when a borrower/homeowner falls behind on loan payments for a mortgage, and the lender files a public notice of default which is called a Notice of Default, or Lis Pendens.  Many homeowners do not understand the seriousness of foreclosure action until it is too late. Consultation with a foreclosure attorney, who may offer legal alternatives to foreclosure actions, based on state laws and the financial position of a homeowner is a prudent action for those that want to work with a lender to keep their Florida property.

First notice.

In accordance with Federal law, a lender cannot officially start foreclosure proceedings with the “first notice or filing” until the borrower is 120-days behind on the payment.  There are instances when the process may begin earlier if a borrower has been delinquent with principal, interest, and escrow amounts due, but not paid. The 120-day rule applies to mortgages that are secured by a property, which is the borrower’s principal residence. (12 C.F.R. § 1024.30). Experienced foreclosure attorneys assist property owners by answering questions and initiating proper steps to stop a foreclosure action.

Impact of bankruptcy. 

Bankruptcy may be an option to stave off foreclosure. If an individual files for bankruptcy before a foreclosure action is initiated, an automatic stay may prevent the foreclosure from moving forward.  Chapter 7 may delay a foreclosure for months and Chapter 13 may allow individuals to save their homes.  Experienced legal professionals can be of assistance in utilizing bankruptcy to positively influence a foreclosure action.

Homestead exemption.

The State of Florida offers homestead exemptions that protect the home in which a family lives from being sold to satisfy debts held by judgment creditors. These exemptions do not protect from foreclosure by a mortgage holder, or the trustee, under a deed, or trust where the home secures a loan for the purchase money. Florida residents’  homes are protected from creditors when they can prove residency and have a homesteaded dwelling and:

• Owners can’t be forced to sell their home to pay off debts
• Owners cannot lose their home if they are sued for any type of debt
• Owners are protected from foreclosure on a primary residence

Seek legal counsel.

Experienced Florida real estate attorneys can review the purchase agreement and note pertaining to a property where the owner has fallen behind on payments, and check for clauses regarding the possibility of a loan modification or other legal means available.  They will explain these options to property owners and file the appropriate paperwork with the banks, the courts and other interested parties after an owner has decided on what course they will navigate to save their home.

Legal Counsel, P.A.

189 S. Orange Ave., Ste. 1800
Orlando, Florida  32801

Phone: 407-982-4321

Sources.

1. Chapter 196 Section 031 – 2020 Florida Statutes – The Florida Senate (flsenate.gov)
2. Statutes & Constitution :View Statutes : Online Sunshine (state.fl.us)