Florida Foreclosure Law E-Book Simple Guide to Florida Foreclosure Law by: florida Law Advisers, P.A. 1
Table Of Contents INTRODUCTION.... 3 FIGHTING THE FORECLOSURE OF YOUR HOME.... 3 PREDATORY LENDING..... SUING YOUR LENDER FOR TILA VIOLATIONS... ROBO-SIGNING... 4 4 5 ALTERNATIVES TO FORECLOSURE.... 5 DEED IN LIEU OF FORECLOSURE.... LOAN MODIFICATION... ROBO-SIGNING... 6 6 7 STRATEGIC DEFAULT.... 8 HOW BANKRUPTCY CAN STOP FORECLOSURE... 8 AUTOMATIC STAY.... 9 CHAPTER 13 BANKRUPTCY... 9 REMOVING A SECOND MORTGAGE... 10 IMPORTANT DISCLAIMER.... 11 2
Introduction Home foreclosure is a common problem in Florida; however, every homeowner s situation is unique and requires personalized attention. Our Tampa foreclosure defense lawyers always listen carefully to our clients in order to develop a detailed step-by-step strategy designed around their specific needs. Homeowners have a lot of options when it comes to fighting foreclosure and we want to make sure our clients choose the best strategic plan for their family. Whether you want to keep your home and prevent foreclosure, or walk away from your home without being responsible for any of the debt, Florida Law Advisers can help. Our Tampa foreclosure defense attorneys have years of experience helping homeowners in all types of foreclosure defense and loan modification matters. Our foreclosure defense lawyers will carefully evaluate your individual situation, advise you of your options, and develop a comprehensive legal strategy to help solve your mortgage problems. Our initial consultation is free and we offer flexible payment options to all of our clients. Florida Law Advisers, P.A. wants to provide you with solutions, not add to your financial burden. We will work with you to develop a payment plan that you can afford. We accept many forms of payment and offer our clients the choice of either a low cost flat fee or low cost hourly fee. Regardless of the option you choose, you will find that Florida Law Advisers charges less than many of the competing home foreclosure defense law firms in the Tampa Bay Area. Contact us today by telephone, web form, email or chat to schedule your free consultation and see how we can help you. 3
Fighting The Foreclosure Of Your Home As a homeowner, you have many legal rights that you can and should assert against your mortgage company. With skilled and aggressive legal representation on your side, you may be able to stop the foreclosure and even successfully countersue your mortgage company. The foreclosure defense attorneys at Florida Law Advisers, P.A. have years of experience protecting homeowners and fighting unscrupulous mortgage companies. The lender will be fighting vigorously to foreclosure on your home, and you should have an aggressive Tampa foreclosure defense attorney on your side to protect your rights. If you have been threatened with foreclosure contact us today to learn about your rights and how you can countersue your mortgage company. At Florida Law Advisers, P.A., we take an aggressive approach to defending clients faced with foreclosure. We carefully scrutinize all of the mortgage documents and loan terms to identify any possible violation that we can use to fight the foreclosure. Our attorneys have years of experience helping homeowners in the Tampa Bay area stay in their homes, and can readily lending violations committed by your mortgage company. If we do uncover that your lender has committed lending violations against you, we will aggressively seek the maximum penalty allowed under the law. Predatory Lending Predatory lending refers to unfair, deceptive, or fraudulent practices used by a lender during the loan origination process. Predatory lending imposes unfair and abusive terms on unsuspecting homeowners which can have devastating consequences. Fortunately, there are many laws in place to protect homeowners from predatory lending, such as The Real Estate Settlement Procedures Act, Truth in Lending Act, Equal Credit Opportunity Act, and The Home Ownership and Equity Protection Act. If your lender engaged in predatory lending during your mortgage origination you may be able to sue your lender and stop the foreclosure of your home. Predatory lending violations may entitle you to void the mortgage and apply 100% of the payments you made directly to principal, thereby eliminating all the interest charges. In addition, you may be able to sue and recover damages for the harm caused by the predatory lending practices. If you suspect that you were the victim of predatory lending, do not hesitate to contact Florida Law Advisers, P.A. for legal assistance. Examples of predatory lending include: Excessive fees Steering borrowers toward less beneficial loan programs, such as adjustable rate mortgages Unfair prepayment penalties Hidden mandatory arbitration clauses in the mortgage agreement Unnecessary refinances that provide no benefit to the homeowner When you visit our firm for your free consultation we will provide a thorough review of your case and explain the legal options available to you. If you were the victim of predatory lending we can take legal action to defend your rights and seek justice for the harm caused by the illegal lending practices. Our foreclosure defense attorneys are dedicated to fighting predatory lending and protecting homeowners in our community. We carefully scrutinize all of the mortgage documents and loan terms to identify any evidence of predatory lending. If we do uncover that your lender has engaged in predatory lending we will aggressively seek the maximum penalty allowed under the law. 4
Suing Your Lender For TILA Violations In 1968, Congress enacted the Truth in Lending Act (TILA) to protect borrowers from unscrupulous lenders. The act is designed to promote the informed use of consumer credit by requiring standardized disclosures, which highlight the terms and cost of the loan. TILA requires that mortgage companies disclose all pertinent terms, costs, and fees associated with the mortgage by using standardized forms. If a mortgage company does not disclose certain terms and costs of your mortgage using the standardized forms, they will be in direct violation of the Act. These violations may give you the right to: Sue for damages caused by the violation Rescind (cancel) the mortgage Sue for statutory damages Recover attorney fees and court costs associated with enforcing your TILA rights Robo-Signing Robo-signing is the practice of a bank employee signing documents and affidavits without verifying that the information contained in the document or affidavit is correct. Many foreclosure documents require the signer to personally attest that they have reviewed the document before signing it. Failing to review the document or affidavit before signing it can call into question the banks legal right to foreclose on a home. Robo-signing has become a pervasive problem in the mortgage industry, with widespread use reported by many of our country s largest mortgage companies. If your bank is threatening you with foreclosure you should contact a Tampa foreclosure defense attorney to investigate your case for evidence of robo-signing. Florida is a judicial foreclosure state, which means that a lender must go to court and receive court approval before foreclosing on a home. If the foreclosure documents are invalid a court has the authority to deny the lender the right to foreclose on the home. For instance, the court may deny the lender s petition to foreclose on the home if a mortgage document or affidavit is suspected of being robo-signed. Attempting to foreclose on a home after robo-signing essential documents is an irresponsible practice that judges seek to correct for the homeowner. At Florida Law Advisers, P.A., our attorneys tactfully question the validity of mortgage documents by calling into question a lender s right to foreclose. If a homeowner is able to cast doubt regarding the bank s validity of the foreclosure process, the lender may be more willing to negotiate and withdraw the foreclosure case. By challenging the validity of the mortgage documents, lenders may discover their case was on thin grounds and it s in their best interest to negotiate. In negotiations, lenders may offer to reduce the principal balance, lower the interest rate, and modify the mortgage so that its terms are more beneficial to the homeowner. 5
Alternatives To Forclosure If you are struggling to keep up with your mortgage it is important to know that you have options and a foreclosure does not have to be one of them. Our foreclosure defense attorneys have helped many homeowners avoid foreclosure by taking advantage of alternatives to foreclosure. At Florida Law Advisers, P.A., we explain all of the foreclosure alternatives that our clients have so that they can choose the path that is best for their family. Our Tampa foreclosure defense lawyers will answer all of your questions and discuss the potential benefits and consequences that may arise with each option. Whether you decide to pursue: a deed in lieu of foreclosure, short sale, loan modification, bankruptcy protection, or legally challenge the foreclosure, Florida Law Advisers, P.A. can help. Our Tampa foreclosure defense attorneys can develop a comprehensive legal strategy based on your specific situation to help solve your current mortgage crisis. Deed in Lieu of Foreclosure A deed in lieu of foreclosure is when a homeowner voluntarily gives title of the property to the mortgage company. A deed in lieu of foreclosure can help homeowners who are interested in walking away from the property avoid the consequences of a foreclosure. Lenders will often accept a deed in lieu of foreclosure to save money on legal fees and bring closure to the matter much quicker than filing for foreclosure. If you are considering negotiating a deed in lieu of foreclosure with your mortgage company, before calling your lender you should contact us to schedule a free consultation with a foreclosure defense attorney. A deed in lieu of foreclosure is not always a straightforward procedure and homeowners may still be responsible to the lender for the mortgage even after giving up title to the property. Typically, unless your deed in lieu of foreclosure agreement says otherwise, your lender may have the right to seek a deficiency judgment against you. A deficiency judgment will allow the lender to file lawsuits and take collection actions against you for the unpaid mortgage debt. At Florida Law Advisers, P.A., we take an aggressive approach with lenders to obtain agreements that will prevent our clients from facing the risk of a deficiency judgment. Our professional legal team has years of experience protecting homeowners and aggressively fighting greedy mortgage companies. Another area of concern for homeowners interested in a deed in lieu of foreclosure is the potential tax consequences. In most deed in lieu cases, there will be a forgiveness of debt by the lender, which is considered a cancellation of debt by the Internal Revenue Service (IRS). If the mortgage balance is greater than the market value of the home, the lender can issue a 1099C for the difference between the home s market value and your mortgage balance. The 1099C reports the debt forgiven as income to the IRS, and you may have to pay taxes on the amount of debt forgiven. However, not all deed in lieu of foreclosures will result in the lender issuing a 1099C. You should speak with a foreclosure defense attorney to see if you may be exposed to the added tax liability. 6
Loan Modification If you have fallen behind on your mortgage payment or are struggling to stay current, a loan modification may provide the solution you need. Loan modification creates a permanent change to one or more of the terms of your mortgage agreement. A loan modification can lower your monthly payment by eliminating late fees, reducing your interest rate, extending the time to repay, and lowering your principal balance. Loan modifications are intended to provide homeowners with a long-term solution to their mortagage problem. However, obtaining a loan modification is not always a straightforward and easy process. If you are seeking a loan modification, you should not go through the process alone. Competent legal representation can increase the chances of the lender approving your request and make the terms of the modification more favorable to you. Our Tampa foreclosure defense attorneys may be able to convince your lender to modify your mortgage to eliminate late fees, lower the monthly payment, extend the amount of time you have to repay, lower your interest rate, and even reduce the principal balance of your mortgage. As experienced mortgage modification lawyers, we understand how to talk to lenders, get their attention, and force them to negotiate fairly with us. Our aggressive approach with mortgage companies has given our clients the opportunity to avoid foreclosure and retain ownership of their home. Our Tampa foreclosure defense lawyers can help homeowners modify their mortgage, whether they are behind on the monthly payment, in default, or even up to date with their mortgage payment. Short Sale In a short sale, the homeowner and mortgage company agree to sell the home for less than the amount owed on the mortgage. Short sales may be a good option for homeowners who have no equity in the property and want to abandon the home without going through the foreclosure process. Short sales are beneficial to homeowners because they are able to walk away from the property without a lengthy legal battle, and they can minimize the damage done to their credit score. On the other hand, lenders will avoid the costs associated with foreclosing on a home. The decision to pursue a short sale should not be made without first obtaining legal counsel. There are many other foreclosure alternatives that may be a better fit for your specific situation, such as a deed in lieu, loan modification, or bankruptcy. In addition, there are many potential disadvantages to a short sale that homeowners should be made aware of. While a short sale may not be as harmful to your credit score as a foreclosure or bankruptcy filing, there will still be some damage done to your credit rating from the short sale. In addition, you may be required to sign a promissory note to pay the difference between the purchase price and amount owed on the mortgage. The promissory note will make you liable for the debt, and the lender can pursue collection and legal actions against you to collect the amount owed. If the lender does not require you to sign a promissory note, you may have to pay taxes on the amount of debt the lender has agreed to forgive as a condition of the short sale. At Florida Law Advisers, P.A. our foreclosure defense attorneys know how to negotiate with lenders to obtain the results our client s want and deserve. Our Tampa foreclosure defense attorneys have gained years of experience from working with homeowners and mortgage companies in negotiating short sales and fighting foreclosure. If you decide to pursue a short sale, we can handle all of the negotiations with your mortgage company and draft all of the necessary documentation to help ensure your rights are protected and the process is as stress-free as possible. 7
Strategic Default Strategic default is when a homeowner intentionally stops making payments on a mortgage, despite having the financial means to pay it. Strategic default is often in response to a sharp decrease in the property s value, which causes the mortgage debt to be greater than the home s market value. This is commonly referred to as having negative equity in the property. When dealing with negative equity, many homeowners decide that it is in their best interest to stop paying the mortgage and walk away from the property. If you are considering a strategic default, you should contact Florida Law Advisers, P.A. to speak with a foreclosure defense attorney before taking any action. By speaking with an attorney at our firm you will know exactly how the strategic default process works, what you can expect from it, and help protect yourself from unwanted consequences. Simply walking away from the property and refusing to make the mortgage payments is not a good solution. Without competent legal representation, a default can result in the lender obtaining a deficiency judgment against you. A deficiency judgment will allow the lender to file lawsuits and take collection actions against you for the unpaid mortgage debt. The deficiency judgment will hold you personally responsible for the debt and can allow the lender to place a lien on other property you own, such as a car or vacation home. The lender can seek a deficiency judgment for the difference between the sale price of the home and your mortgage balance. For instance, if your home sells for $150,000 at a foreclosure auction and your mortgage balance is $200,000, the lender may have the right to seek a $50,0000 deficiency judgment against you. With so much on the line, it is in your best interest to have legal representation by your side. 8
How Bankruptcy Can Stop The Foreclosure If you have fallen behind on your mortgage and your lender has threatened to foreclose on your home, bankruptcy may be able to stop the foreclosure and make your mortgage payments more manageable. At Florida Law Advisers, P.A. our foreclosure defense attorneys have helped many homeowners prevent a foreclosure and lower their monthly payment by filing for bankruptcy. Bankruptcy is a useful tool, but it may not be the right solution for everyone. To find out more about how bankruptcy can prevent a home foreclosure, contact us to schedule a free consultation with a Tampa bankruptcy lawyer at our firm. During the consultation a bankruptcy attorney will review the facts of your case and help develop a comprehensive solution to solve your financial problems. The Automatic Stay Filing for bankruptcy will stop any home foreclosure action by your lender under the automatic stay provision of the U.S. Bankruptcy Code. When you file for either Chapter 13 or Chapter 7 bankruptcy, the court will automatically enact a stay. The stay requires all collection actions against you to stop immediately. Creditors and collection agencies will not be able to contact you, garnish your wages, or repossess your property while the automatic stay is in effect. The automatic stay may even put a stop to a scheduled foreclosure sale of your home. In most cases, the automatic stay will remain in effect until your bankruptcy case is discharged. The automatic stay can help provide a homeowner with more time to catch up on their mortgage or to fight the foreclosure in court. Chapter 13 Bankruptcy Chapter 13 is a reorganization bankruptcy, it gives you the opportunity to reorganize your debt into a more manageable payment. In addition, it may provide you up to 5 years to catch up on missed mortgage payments without being charged additional interest from your lender. Chapter 13 may also allow you to remove a second mortgage from your home. If you have two mortgages on your house and your primary mortgage exceeds the current market value of the property, you may be able to remove the second mortgage in bankruptcy. Once the mortgage is removed from the property it will be treated like any other unsecured debt in the bankruptcy process. In Chapter 13 bankruptcy secured creditors must be paid in full, however, unsecured creditors do not. A secured loan is a loan that has collateral, such as a car loan or home mortgage. Unsecured debts in Chapter 13 may be discharged without receiving any payment. Therefore, if a 2nd mortgage is treated as an unsecured loan it may be discharged without requiring the homeowner to pay any portion of the debt. Once the 2nd mortgage is discharged it will no longer be a lien on the property and the homeowner will be released of all liability. In order to classify a 2nd mortgage as an unsecured debt, the market value of the home must be equal to or less than the balance of the first (primary) mortgage. Collateral will not be left for the second mortgage if the market value does not exceed the amount owed to the primary mortgage, and thus the loan will be treated as an unsecured loan in bankruptcy. The market value of the home will be determined by an independent home appraiser and reviewed by the court. Once the discharge is entered by the court, the mortgage lien will be deemed void and automatically extinguished without any further court action necessary. 9
Removing a 2nd Mortgages If you are struggling to keep up with your monthly payments and have more than one mortgage on your home, Chapter 13 bankruptcy may provide the relief you need. Under Chapter 13 bankruptcy law, you may be able to remove a 2nd mortgage from your home and discharge the debt in bankruptcy. The discharge will release you from all personal liability on the mortgage and extinguish the lien placed on your property. At Florida Law Advisers, P.A., our bankruptcy attorneys have helped many homeowners prevent a foreclosure and lower their monthly payment by filing for bankruptcy. Bankruptcy is a useful tool but it may not be the right solution for everyone. You should contact us to schedule a free consultation with a Tampa bankruptcy lawyer before taking any action. During the consultation we can explain exactly how the bankruptcy process works and what you can expect by filing for bankruptcy. How To Remove A 2nd Mortgage: A secured loan is a loan that has collateral, such as a car loan or home mortgage. In Chapter 13 bankruptcy secured creditors must be paid in full, however, unsecured creditors do not. Unsecured debts in Chapter 13 may be discharged without receiving any payment. Therefore, if a 2nd mortgage is treated as an unsecured loan it may be discharged without requiring the homeowner to pay any portion of the debt. Once the 2nd mortgage is discharged it will no longer be a lien on the property and the homeowner will be released of all liability. In order to classify a 2nd mortgage as an unsecured debt, the market value of the home must be equal to or less than the balance of the first (primary) mortgage. Collateral will not be left for the second mortgage if the market value does not exceed the amount owed to the primary mortgage, and thus the loan will be treated as an unsecured loan in bankruptcy. The market value of the home will be determined by an independent home appraiser and reviewed by the court. Once the discharge is entered by the court, the mortgage lien will be deemed void and automatically extinguished without any further court action necessary. 10
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