Our last post looked into Florida’s foreclosure process and what you should do if you are served court papers for a foreclosure. This post looks at what to do once you have answered your lender’s summons and complaint.

Florida is at the top of the list of states by percentage of homes foreclosing, only behind Nevada. Nearly one in every 148 houses is going through one stage or another of foreclosure. If you live in Florida it is likely you are either worried about foreclosure, suffering its effects, or know someone close to you that is.

So what should you do after you have filed your reply to a foreclosure summons and complaint form. You should contact your lender or the lawyer that is handling the foreclosure and negotiate terms to avoid foreclosure. This can include a loan modification, a short sale, a deed-in-lieu of foreclosure or simply a few months forbearance to get your finances together. Lenders cannot ignore your efforts to look for help. Since May 1, 2009 the 11^th Judicial Court (covering Miami-Dade County) and other courts in Florida, passed  an administrative order requiring mediation in foreclosure cases. This mediation program is called CHAMP, and could be your last chance to avoid losing your home. This is how it works.

Once a foreclosure lawsuit is filed the lender must contact the Collins Center and provide contact details for the borrower facing foreclosure. The Collins Center contacts will then call you and put you in touch with a Housing and Urban Development approved housing counselor. You can find a housing counselor near you at HUD’s website. The housing counselor will assist you in filling some financial forms and set a date for a mediation meeting with your mortgage lender.

Attend the mediation meeting and work with your lender and housing counselor to avoid the foreclosure. If you do not attend or no settlement is reached the lender will file a Motion for Summary Judgment. This document informs the Judge there are no facts in dispute between you and the lender. You will receive a copy of the motion; read it carefully, and check everything is correct. If you disagree with what the motion says file an affidavit with your version of the facts. Your housing counselor can help writing the affidavit. Remember the affidavit must be signed in front of a notary.

If you disagree on the facts the trial will be postponed to a further date. If there are no facts in dispute the Judge will schedule a foreclosure sale. If there are you will receive a notice of hearing. Attend that hearing, and take with you all the documentation to do with the foreclosure. Prepare yourself as a lawyer would. Be ready to explain clearly and logically what you disagree about with the lender, and what evidence backs your arguments. If you do not convince the Judge your house will be scheduled for a foreclosure sale. If you do convince him, or the lender failed to follow procedure correctly, your foreclosure could be postponed or even canceled.

Florida Mortgage Help: What To Do After Filing An Answer In The Foreclosure is a post from: Government Mortgage Help

As you no doubt know a foreclosure is a lawsuit filed by your lender because you haven’t paid your mortgage. In Florida foreclosures are a judicial process which is why your lender had to go to court to try to get his money back. Once your lender filed for foreclosure the sheriff or a process server gave you your copy of the Summons and Complaint forms.

Yes I know all that, what do I do now?

Lawyers – The Necessary Evil

Your first step if you are going through a foreclosure is to call a lawyer. If this is the first you hear about problems with your mortgage you probably missed a default notice on your mortgage, which might provide you with ammunition for a counterclaim. In any case you should get a lawyer to have a look at your situation. Get the best lawyer you can afford. Contact the National Association of Consumer Advocates they can recommend a foreclosure law specialist. Alternatively, if you can’t afford a lawyer they can also recommend a program or charity that provides low-cost or free legal aid. Another option is to call the Florida Bar Lawyer Referral Service (1-800-342-8011) and ask for the low-cost panel. Expect personal questions on your income. If you qualify they will assign you a private lawyer which will work for a reduced fee. If you do not qualify the referral service will give you the name of a regular attorney; the first consultation will cost $25.

Forensic Audits

Talk to your lawyer and ask for advice. This is especially important if you feel your lender has not been honest with you. Foreclosure lawyers can carry out a forensic audit on your mortgage and look for any illegal methods or terms used in the mortgage agreement or in the sale process. Most audits don’t show problems, but if your lawyer finds serious mistakes a judge could declare your mortgage void. Unfortunately many companies that offer foreclosure audits are scam artists preying on vulnerable borrowers. Make sure you use a trustworthy and experienced lawyer.

Reply to the Summons and Complaint

You now must reply to the Summons and Complaint form.  First, read the documents carefully. They will tell you what your lender’s complaint is, and instructs you on what to do next. Include in your answer a reply to any statements you think are not true or wrong. You should also explain why you think the court should not allow the foreclosure to continue. These are called “affirmative defenses”. For instance you could claim the lender did not follow Florida foreclosure procedure, or refused to work with you when you were trying to avoid foreclosure.

Check the amount the lender claims you owe. If you think there is a mistake or they are claiming excessive foreclosure costs, include this in your reply. Don’t forget to write your full name and contact details. You should also mention you have mailed a copy to your lender’s attorney. Make sure you do send a copy to the mortgage company’s lawyer. You should find the contact details in the Summons and Complaint documents.

Finally, make several copies of your answer and take the original to Clerk’s office. Filing your answer is free. Ask the clerk to give you a stamped copy for your own records.

Florida Mortgage Help: I Was Served Foreclosure Papers; What Do I Do? is a post from: Government Mortgage Help

Florida has a Judicial Foreclosure system. This means all foreclosures go through court; however foreclosure claims are not tried with a jury.  When a lender files a foreclosure case the court assesses the claim and specifies how the foreclosure will take place. The lender is responsible for advertising the foreclosure sale on newspapers, posting notices on the property and telling the borrower foreclosure proceedings have started.

In Florida the home owner (that is the borrower) can redeem the property by covering late payments and any reasonable foreclosure costs incurred in the process right up to foreclosure sale. After the foreclosure sale the court reviews the sale to make sure there was no foul play and a reasonable price was paid. This step takes around ten days after which (if there are no problems) the sale is confirmed.

Lenders in Florida can ask the court for a deficiency judgment if the foreclosure sale does not cover the mortgage balance. Let us explain. Imagine you lose your job and can no longer pay your mortgage. Your lender forecloses your home, sells it, and gets $100,000 for it. Unfortunately for the lender (and for you) you still owed $150,000 on your mortgage. This means the borrower has just lost $50,000. The lender can file a deficiency judgment to the court to get you to pay the $50,000 difference. According to law the lender has up to a year to do this. However, there is nothing stopping the lender to passing on a deficiency judgment to a third-party. This happens when the loan has a Private Mortgage Insurance which covers the lender’s risk when you default on your mortgage. Nevertheless, the PMI insurance company can sue you for the difference (deficiency judgment).

What is the way out? Be aggressive when trying to avoid foreclosure. Don’t just lie back and wait for the “inevitable”. Although it is true not as many as hoped are receiving government financial help; there are programs you can use. Some of these programs like Home Affordable Foreclosure Alternative help borrowers short sale or offer a deed-in-lieu of foreclosure. Although both of these alternatives have their risks a short sale can be prepared so that the lender agrees to forgive any pending debt.

Mortgage Help In Florida: Foreclosure Law & Deficiency Judgments. is a post from: Government Mortgage Help