Facing the loss of your home can be a very stressful and unbearable situation. What makes matters worse is that there are countless scammers waiting for the opportunity to take advantage of desperate homeowners who want nothing more than to fight their pending foreclosure and keep their homes. Fortunately, there are sources you can turn to and trust to help you defend yourself and your home against foreclosure.

Before jumping straight into foreclosure defense, let’s address one of the biggest concerns people often have when they’re facing foreclosure:

How long does a foreclosure stay on your credit report?

Similar to a bankruptcy, a foreclosure will remain on your credit report for seven years. During that time, the impact of the foreclosure will lessen as the years go on.

What To Avoid When Fighting Foreclosure

In order to protect yourself from getting into an even worse situation (thanks to scam artists), you’ll want to avoid these signs and characters:

  • Any person or company offering to stop the foreclosure if you sign over the title to your home,
  • Any person or company offering to act on your behalf if you sign a document,
  • Any person or company offering to set up financing to “save your house,”
  • Any for-profit foreclosure prevention company or loss-mitigation company,
  • Any mortgage broker or foreclosure specialist who want you to pay them upfront (which is illegal in Florida),
  • Any mortgage broker, attorney, or other “helpful” party who cannot provide their Florida state licensure to prove they are legitimate,
  • Any leaseback company offering to purchase your home in a “short sale,” then lease it back to you while you rent-to-own it,
  • Any person or company offering to negotiate with the lender for you who is not an attorney or mortgage broker,
  • Any person, company, or service offering to stop the foreclosure if you pay them up front and advising you to stop making payments, AND
  • Any person or company claiming to be a “credit counselor” who is not affiliated with HUD.

If that seems like a long list, it’s because it is. Unfortunately, every year there are numerous scams targeting Florida residents, which is why Florida is one of the top three states for fraud reports every year.

At Lawyer Friend®, our primary focus is to help you find a caring, compassionate, and experienced lawyer, but we are also dedicated to helping you avoid scammers who are only looking out for their own wallets. If you’ve been contacted by someone about your foreclosure, please consider the above list before working with them. When in doubt, ask an experienced and reputable foreclosure defense attorney for advice.

Avoiding Foreclosure & Keeping Your House

If your home is under foreclosure in Florida, there are really only two possible outcomes of the situation:

  1. You Keep Your House
  2. You Don’t Keep Your House

To have the best chance of keeping your house and protecting yourself along the way, you will need to work with a foreclosure defense attorney. An attorney can help you with any of the following:

  • Mortgage Reinstatement
  • Mortgage Forbearance
  • Mortgage Repayment Plan
  • Loan Modification
  • Refinancing Your Mortgage
  • Fighting the Foreclosure

Some of these options, such as a repayment plan and loan modification, can be combined to give you the best chance of keeping your home for the long-term. Before you begin, your attorney can advise you on which route(s) would be your best option(s) and which options you may be able to combine.

With a mortgage reinstatement you agree to catch up on your late payments by a certain date. This option involves paying a lump sum and is known to carry late fees, penalties, and other additional costs that can significantly increase the amount you’re expected to pay.

Mortgage forbearance allows you to temporarily suspend (or reduce) your monthly payments with the expectation that when the forbearance ends you will be able to catch up on any overdue payments and not default on your mortgage again. The monthly interest on your mortgage is usually not suspended or reduced with this option, so you should continue paying any monthly interest on time. This may be a great option for you if you are only temporarily having financial difficulties or expect to increase your income in the near future.

If you’re able to make more than your monthly payment, you might want to consider a repayment plan. This will increase your monthly payments by spreading out your past due balance over a certain amount of months, until you are completely caught up on your mortgage payments.

When your lender agrees to permanently change one or more terms of your original mortgage, that is called a loan modification. Loan modifications are meant to make your payments more affordable so you can eventually pay off the entirety of your mortgage. To do this, your lender might reduce your interest rate, change your interest rate from variable to fixed, forbear part of the principal balance, and/or extend the length of your mortgage.

Refinancing your mortgage can be the best option in certain circumstances, but it is not often recommended. Consult your attorney and financial advisor before deciding to refinance your mortgage.

Fighting the Foreclosure

There are many complexities surrounding foreclosure laws in Florida. Keep in mind that a foreclosure is like any other civil case where many defenses are available to the homeowner. The lender has the burden to prove they are the proper “holder” of the note who is entitled to enforce its terms, that they satisfied all conditions precedent to filing the foreclosure action, that they accounted for all payments correctly, and that they are ultimately entitled to a judgment. Given that mortgage loans are typically transferred and sold several times before the foreclosure is filed, records proving all elements of the foreclosure action are hard to locate, may be lost, or may be full of errors and omissions. A seasoned foreclosure defense attorney can locate the issues in your foreclosure case and defend against a lender or servicer who is unable to properly prove their case.

Deciding Not to Keep Your House

It’s difficult to think about, but sometimes walking away without a foreclosure on your credit report is the best option. (Any late or missing mortgage payments will still be on your credit report, but the foreclosure will not.) If you decide to walk away from the house, you might attempt one or more of these options:

  • Short Sale
  • Deed in Lieu of Foreclosure
  • Assumption of Mortgage

With a short sale, you list your home for sale as you would any home. However, if the offer does not cover the amount owed on your mortgage and your lender agrees to write off the difference, that is what’s called a “short sale.”

Once you’ve tried to sell your home for at least three months (for a fair market value), you can contact your lender and offer the deed to the property in order to stop the foreclosure. This act is referred to as a deed in lieu of foreclosure, or “deed in lieu” for short. The deed in lieu option is only possible if you do not have a second or third mortgage, any judgement-based liens against the property, or unpaid property taxes.

An assumption of mortgage is a situation where you and the person buying your home can both win. In an assumption of mortgage, you list your home for sale as usual, but instead of the new homebuyer applying for a loan to purchase the house, they will take on your existing mortgage. One reason buyers may be interested in this option is because the terms and rates of your mortgage will remain the same, so if your terms and/or rates were better than they would be able to get otherwise, it may be in their best interests to assume your mortgage.

Your lender will have to run a credit check and accept the new buyer before they are able to assume the mortgage, but they will only check their credit and other information to ensure that the new buyer can make the required payments and remain up-to-date on the loan until the mortgage has been paid off. Once the mortgage has been transferred to the buyer, you will no longer be responsible for any payments on the mortgage.

Negotiation of an In-Rem Foreclosure Judgment

Another potential option would be the Negotiation of an In-Rem Foreclosure Judgment. In-Rem is a latin phrase which means “Against the Property.” Many Florida homeowners that purchased their property at the height of the housing market have seen the value of their home drop below the amount they owe on their mortgage. We refer to these properties as underwater. With an In-Rem foreclosure, the lender agrees to a foreclosure judgment against the property only, and waives their right to seek a personal money judgment against the homeowner, should the property sell for less than what is owed on the mortgage.

Your Foreclosure Defense

The foreclosure defenses we’ve mentioned are just the beginning of the possible options you may have for your unique situation. An experienced foreclosure defense attorney who knows the ins and outs of Florida foreclosure laws will be able to determine what defenses are available to you, advise you on what path(s) to take, and help you throughout the entirety of your foreclosure defense. To find a foreclosure defense attorney near you, give us a call at 386-951-5438.

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