Don’t be caught off guard if you're behind in mortgage payments and facing a foreclosure. Read on to learn about each step in the Florida foreclosure process—from missing your first payment all the way to eviction.
People who take out a loan to purchase residential property in Florida typically sign a promissory note and a mortgage. A promissory note is basically an IOU that contains the borrower's promise to repay the loan, as well as the terms for repayment. The mortgage creates a security interest in the property.
If you miss a payment, most loans include a grace period of ten or fifteen days after which time the servicer will assess a late fee. Each month you miss a payment, the servicer will charge you a late fee. To find out the late charge amount and grace period for your loan, look at the promissory note that you signed. This information can also be found on your monthly mortgage statement. (Learn more about fees that the servicer can charge if you’re late on mortgage payments.)
In most cases, federal mortgage servicing laws require the servicer to contact the borrower by phone and in writing during the preforeclosure period. (12 C.F.R. § 1024.39). Don’t ignore the phone calls and letters. They offer a good opportunity for you to discuss loss mitigation options —like a loan modification, forbearance, or payment plan—with the servicer. Also, federal law generally requires the servicer to wait until you're more than 120 days delinquent on payments before officially starting a foreclosure.
Many Florida mortgages contain a clause that requires the lender to send the borrower a breach letter. The letter must inform the borrower that the loan is in default and specify: the default, the action required to cure the default, a date (usually not less than 30 days from the date the notice is given to the borrower) by which the default must be cured, and that failure to cure the default on or before the date specified in the notice may result in acceleration of the debt and sale of the property.
Usually, the servicer will send this letter when you're around 90 days' delinquent on the loan.
In Florida, foreclosures are judicial, which means the lender (the plaintiff) must file a lawsuit in state court. The lender's attorney initiates the foreclosure by filing a complaint with the court and serving it to the borrower, along with a summons that provides 20 days to file an answer. If you don't respond to the lawsuit by the deadline, the lender can ask the court for a default judgment. On the other hand, if you file an answer, then the lender can't get a default judgment. Instead, it will likely file a motion for summary judgment. Unless you have some defense or counterclaim that would justify or excuse your nonpayment, the lender will likely win the motion for summary judgment and the court will render a final judgment of foreclosure. But if the judge denies the lender’s motion for summary judgment—say you have a potentially legitimate defense to the foreclosure—the foreclosure will proceed to discovery and trial. If you lose at trial, the court will enter a final judgment of foreclosure against you.
If the lender gets a judgment of foreclosure, the court schedules a sale of the property not less than 20 days, but no more than 35 days, after the judgment (unless the plaintiff or plaintiff’s attorney consents to additional time). (Fla. Stat. § 45.031).
A notice of sale must be published in a newspaper for two consecutive weeks with the second publication at least five days before the sale. (Fla. Stat. § 45.031).
At the foreclosure sale, the property will be sold to the highest bidder, which is often the foreclosing lender. The lender usually makes a credit bid at the foreclosure sale. If the lender is the highest bidder, the property becomes REO.
Certificate of sale. Under Florida law, the court clerk must promptly file a certificate of sale after the foreclosure sale takes place. (Fla. Stat. Ann. § 45.031). This usually occurs within one day of the sale.
Certificate of title. The borrower has ten days after the certificate of sale to file an objection to the amount of the bid. After ten days, the clerk confirms the sale and issues a certificate of title to the purchaser. (Fla. Stat. Ann. § 45.031).
In Florida, a lender may obtain a deficiency judgment as part of the foreclosure action or in a separate action within one year, starting on the day after the court clerk issues a certificate of title to the buyer who purchased the home at the foreclosure sale. (Fla. Stat. § 702.06, Fla. Stat. § 95-11).
The court has flexibility regarding the amount of the deficiency, which can't exceed the difference between the judgment amount and the fair market value in the case of an owner-occupied residential property. (Fla. Stat. § 702.06).
You can redeem the home at any time before:
You’ll get a copy of the foreclosure judgment from the court by mail. In most cases, the judgment will state that your right to redeem ends when the clerk files the certificate of sale.
If the foreclosed borrower doesn’t vacate the property following the foreclosure sale, the new owner (usually the foreclosing lender) will likely:
The eviction process is typically part of the foreclosure action with the right to possession included in the judgment. After the certificate of title is issued, the lender files a motion for a writ of possession. When the motion is granted, the clerk of court issues the writ, which gives you 24 hours to move out, and the sheriff posts it to the property. If you don't move out, the sheriff will make you leave.
If you need more information about how foreclosures work in Florida, or want to learn whether you have any potential defenses to a foreclosure, consider talking to a foreclosure lawyer.