The
Foreclosure Process - What Happens....
In
Florida, mortgages must be foreclosed by filing a lawsuit in court.
As in any lawsuit, the borrower must be served with notice of
the lawsuit and must be given an opportunity to appear and defend
his or her rights. The lender will try to show that the borrower
is in default, and that foreclosure is therefore necessary under
Florida equity law. Florida is unusual in that the legislature
has passed very few statutes regulating foreclosures.
Most
of the law on the subject of foreclosures in Florida is found
scattered in dozens of cases. The basic statute, chapter 702.01
reads as follows:All mortgages shall be foreclosed in equity.
In a mortgage foreclosure action, the court shall sever for separate
trial all counterclaims against the foreclosing mortgage. The
foreclosure claim shall, if tried, be tried by the court without
a jury.Counterclaims by a borrower may be tried by a jury, but
they must be tried separately from the main foreclosure lawsuit.In
Florida because the lawsuit to foreclose on a borrower is a suit
in equity, it is impossible to obtain an injunction to stop what
is, in essence, a court ordered sale.
In
addition, the court can order the sale at a low price. A sale
can be set aside if there is an error in the procedure to foreclose;
however, it cannot be set aside due to the low sale price. The
court order commanding foreclosure will specify how the foreclosure
must take place, and the foreclosure must take place on those
terms.
After
the sale takes place, the sale terms must be confirmed by the
court that ordered the sale. If the terms of the sale order are
met, title in the buyer's name can become complete by filing a
certificate of title. At the discretion of the court, junior lien
holders can redeem the property, up to the time of the confirmation
of the sale. The equity of redemption is cut off when the sale
is confirmed, but it exists prior to that time, which means the
borrower can save the property from foreclosure by coming up with
the money before confirmation.
Deficiency-
A separate action for a deficiency must be filed within four years
after the foreclosure sale.
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