Understanding the foreclosure process in FL is an important part of navigating your own home foreclosure.
Understanding the Foreclosure Process in FL
What is foreclosure anyway?
Foreclosure is the legal process that lenders use to take back property securing a loan. In most cases, this happens shortly after a borrower with a mortgage stops making payments.
Foreclosure represents the lawful procedure employed by lenders to reclaim property securing a loan, typically initiated when the borrower ceases payment. While facing foreclosure is undoubtedly challenging, it’s essential to recognize that it doesn’t signify the end of the road. Understanding the intricacies of foreclosure in FL equips you with the information necessary to navigate the process adeptly, ensuring you emerge on the other side in the best possible position.
The Basic Stages of A Foreclosure
There are a few stages that are important to any foreclosure process.
Foreclosure works differently in different states around the country.
The two ways different states use to foreclose upon a property are: judicial sale or power of sale. Several crucial stages are integral to every foreclosure process. The procedures of foreclosure vary across states in the country. The means employed by different states to foreclose on a property typically fall into two categories: judicial sale or power of sale.
Give us a call at 727-492-5765 or through our contact page to have us walk you through the specific foreclosure process here locally in Pasco County.
In both situations, the foreclosure process usually doesn’t enter the court system until three to six months of missed payments have passed. Generally, though not always, the lender will issue numerous notices indicating that you are behind or overdue on your payments.
Under Judicial Foreclosure:
- Your mortgage lender must file suit in the court system.
- A demand letter will come from the court demanding payment.
- Assuming the loan is valid, you’ll have 30 days to bring payment to court to avoid foreclosure (and sometimes that can be extended).
- A judgment will be entered and the lender can request the sale of your property – usually through an auction – If you don’t pay during the payment period,
- After the property is sold, a sheriff will evict you and forces you to immediately vacate the property.
Under Power of Sale (or Non-Judicial Foreclosure):
- The mortgage lender serves you with papers demanding payment, and the courts are not required – although the process may be subject to judicial review.
- After the established waiting period has elapsed, a deed of trust is drawn up and control of your property is transferred to a trustee.
- The trustee can then sell your property to the lender at a public auction (notice must be given).
Anyone who has an interest in the property must be notified during either type of foreclosure.
For example, any contractors or banks with liens against a foreclosed property are entitled to collect from the proceedings of an auction.
What Happens After A Foreclosure Auction?
After a foreclosure is complete, the loan amount is paid off with the sale proceeds.
Sometimes, if the sale of the property at auction isn’t enough to pay off the loan, a deficiency judgment can be issued against the borrower.
A deficiency judgment is where the bank gets a judgment against you, the borrower, for the remaining funds owed to the bank on the loan amount after the foreclosure sale.
Some states limit the amount owed in a deficiency judgment to the fair value of the property at the time of sale, while other states will allow the full loan amount to be assessed against the borrower.
Generally, it’s best to avoid a foreclosure auction. Instead, call up the bank, or work with a reputable real estate firm like us at Pasco House Buyers to help you negotiate discounts off the amount owed to avoid having to carry out a foreclosure.
Experienced investors can help you by negotiating directly with banks to lower the amount you owe in a sale – or even eliminate it, even if your home is worth less than you owe.
If you need to sell a property near Pasco County, we can help you.
We buy houses in Pasco County FL like yours from people who need to sell fast.
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