In Florida, if a homeowner is having difficulty making their mortgage payments, they may face foreclosure and not know what to do next. There is a foreclosure process that is helpful to understand.
Foreclosure is a legal process where a lender, like a bank or credit union, takes ownership of a property from a borrower who has not paid the mortgage over several months.
The lender will send the borrower a Notice of Default, which lets the borrower know they are past due in their payments and usually gives them 30 days to pay the amount owed. Then, if the borrower does not pay, the lender can file a foreclosure lawsuit. The borrower will have an opportunity to respond and can try to negotiate a settlement with the lender.
If the court rules in favor of the lender, however, it will issue a judgement of foreclosure and set a date for the sale of the property. In some situations, the borrower may have an option to reclaim the property by paying the outstanding amount before the property is sold.
Before a home goes into foreclosure, the borrower may be able to request a loan modification. This means that the terms of the mortgage are modified, like extending the loan term so the monthly payments are lower or reducing the interest rate.
The lender may also agree to a forbearance where the payments are paused or reduced for a specific period. The lender may also allow the borrower to surrender the property to avoid the foreclosure process.
The foreclosure process can be complicated, but there is support available to borrowers who have fallen behind on their payments.