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Florida foreclosure

Do You Know How The Fair Foreclosure Act Will Affect You?

 

Florida was among the hardest hit states in the national housing crisis, and state courts are still dealing with the flood of foreclosures crowding dockets. The Florida Fair Foreclosure Act (“FFFA”) was signed into law in attempt to unclog the court system with an expedited foreclosure process that both hurts and helps distressed homeowners.

Florida is a judicial foreclosure state, which means all foreclosure actions must be handled in a state court. The Florida Fair Foreclosure Act did not change that. However, there were some significant changes in the Florida foreclosure process that homeowners facing foreclosure need to know.

How the Florida Fair Foreclosure Act Helps Homeowners.

Lender Must Prove Ownership of Note. Before the Florida Fair Foreclosure Act was enacted, lenders were able to file foreclosure actions without having to prove they owned the promissory note. This led to a number of abuses and wrongful foreclosures. Now, lenders must prove they have the right to foreclose on a property by producing the promissory note or documentation that shows ownership of the debt has been legally transferred to them.

Reduction in Deficiency Judgment Statute of Limitations. If a homeowner owed more than his or her house was worth, the difference is known as a deficiency. In Florida, lenders can pursue a personal judgment against a homeowner for the deficiency amount. With the passage of the Florida Fair Foreclosure Act, the time a lender has to pursue a deficiency judgment has been reduced from five years to one year. In addition, a deficiency judgment cannot be more than the difference between the judgment amount and the fair market value of the home on the day it was sold.

How the Florida Fair Foreclosure Act Hurts Homeowners.

Any Lienholder May Request Expedited Foreclosure. The Florida Fair Foreclosure Act makes it possible for any lienholder — a homeowners association or condo association — to petition the court for an expedited foreclosure. This means that homeowners may have less time to seek a loan modification or other workout that could avoid foreclosure.

Foreclosure Judgments Final. Under the Florida Fair Foreclosure Act, foreclosure judgments in Florida are final. Any legal challenges are limited to monetary damages when certain conditions are met by the lender, including:

- Homeowner was served properly in the foreclosure action;
- Final foreclosure judgment was entered;
- Appeal period has been exhausted; and
- Home has been purchased by someone unaffiliated with the lender or former owner.

For more information on the Fair Foreclosure Act, visit our website www.dsalegalgroup.com.

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6 Ways to Stop Foreclosure

There are several ways that homeowners can help guard against foreclosure so that they can keep their homes and avoid the negative consequences of this action.

Reasons for Foreclosure

When a person acquires a mortgage on his or her property, the loan is secured with the mortgage. If the person gets behind on the payments or otherwise fails to meet his or her obligations under the mortgage contract, the lender can take steps to foreclose on the home.

Consequences of Foreclosure

In addition to losing the residence, the homeowner faces many additional consequences if the property is foreclosed upon. The homeowner can be charged for the expenses related to dispossession and other charges allowed by law. In many states, the lender can still pursue a deficiency judgment for any difference between the amount owed on the loan and the sale price. Additionally, the homeowner’s credit will likely be significantly impacted by this event.

There may be several options available to avoid foreclosure depending on the circumstances, including:

Foreclosure Settlement

Rather than selling the house at auction, the bank may be willing to work out some type of settlement that will allow the homeowner with the loan. In Florida, this usually happens before or during the lawsuit that is filed.  It is always a good idea for homeowners to act sooner than later if this is their goal.

Loan Modification

The lender may agree to modify the loan rather than foreclosing the property. A loan modification can make an existing loan more feasible by resulting in lower monthly payments, lower interest rates, more time to pay or unpaid payments added to the back end of the loan. In some loan modifications, the amount of the loan may be reduced. The lender may be more willing to work with a homeowner who has taken additional steps to try to meet the financial obligation, such as reducing other expenses or getting an additional job.

Deed in Lieu of Foreclosure

A deed in lieu of foreclosure results when the person whose name the home is in voluntarily signs the deed to the property back over to the lender. This can help the homeowner avoid the additional expenses related to foreclosure and the public nature of the proceedings. There are some disadvantages to this approach, so it is important that a person in this situation seek legal counsel.

Short Sale

One common way that a person can avoid foreclosure is by having a short sale of the property. Many lenders during the real estate crisis used short sales as an exit plan so that they would get more proceeds from the sale of the house than they would have received through a public auction. Once the homeowner receives a Notice of Default or otherwise suspects that he or she may have trouble meeting the obligation, he or she may consider a short sale. A short sale occurs when the homeowner sells the property for less than the current value of the property. The lender may agree to this arrangement rather than having to proceed with a foreclosure. However, the lender may still be able to seek a deficiency judgment for the unpaid portion of the loan. Some states do not permit this while others do. Individuals who are considering a short sale should be careful to negotiate an acceptance by the lender of the purchase amount and to accept it as payment in full. Even with this scenario, there may be tax implications to a short sale, so it is important

Bankruptcy

Filing bankruptcy can sometimes help avoid bankruptcy. When a person files bankruptcy, an automatic stay is issued which prevents further collection efforts. Therefore, a bankruptcy works to effectively freeze a foreclosure. However, the homeowner may still wind up losing the home in the bankruptcy proceedings if he or she cannot show that the debt can be repaid. So bankruptcy often works as a mere delay of the foreclosure. However, during bankruptcy, the debtor and the creditors may be able to work out an arrangement that will allow the debtor to repay some of the loan. The secured debt has priority over unsecured debts. Bankruptcy has many ramifications of which the debtor should be aware and seek counsel.

Hiring a Foreclosure Defense Attorney

Individuals who believe that they may be in fear of a foreclosure may wish to contact a lawyer. A real estate lawyer can help explain the process of foreclosure and evaluate the individual’s circumstances to determine whether there are any alternatives to foreclosure. He or she can explain the pros and cons of these potential alternatives.

Source: HG.org

Florida Foreclosures Decline by 41,000 in One Year

Florida Foreclosures still rank at the top of the national heap when it comes to completed foreclosures.

Lenders closed on 66,071 Florida Foreclosures during the 12-month period ended in April, accounting for 14 percent of all seized properties in the U.S., data provider CoreLogic said.

That was nearly 20,000 more Florida foreclosures than second-place Michigan, but it was also 41,435 fewer than the previous year's foreclosures in Florida.

Florida Foreclosures tied for fourth in the total percentage of distressed properties, with 2.0 percent of the state's homes in some stage of the foreclosure process.

Florida foreclosure inventory is down from 2.9 percent over the year, but it remains nearly double the U.S. average of 1.1 percent.

Nationwide, 461,615 foreclosures were completed nationwide in past year.

When it comes to Florida foreclosures, 4.6 percent of all home mortgages are considered seriously delinquent – at least 90 days past due – which was the third highest rate in the nation. But that declined from 6.5 percent over the year.

Those homeowners are considered most at risk to fall into foreclosure.

The U.S. rate was 3.0 percent, the lowest level since October 2007.

"The recovery in home prices and improved labor market have contributed to the drop in seriously delinquent rates," said Frank Nothaft, chief economist for CoreLogic. "Over the 12 months through April, the CoreLogic Home Price Index for the U.S. rose 6.2 percent and the labor market gained 2.6 million jobs. We also found that the seriously delinquent rate fell by about three-quarters of a percentage point."

New Jersey led the nation with a foreclosure rate of 3.7 percent, followed by New York at 3.2 percent and Hawaii at 2.2 percent.

Copyright © 2016 Sarasota Herald-Tribune, Fla., John Hielscher. Distributed by Tribune Content Agency, LLC source