Essential Steps to Take if You’re Behind on Your Mortgage in Florida

Essential Steps to Take if You're Behind on Your Mortgage in Florida
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Even when the economy is doing well, it can be incredibly difficult to keep up with everything that you have to take care of in life. There are so many factors and things to juggle. When you fall behind on a mortgage in Florida, it can be overwhelming.

Don’t just assume that you’ll have to give up and leave the home that you’ve been living in. When those missed payments start to stack up, you have options that will allow you to take control of this seemingly uncontrollable situation.

Notice of default

The first step on the road to any foreclosure proceeding is a notice of default. Even though you’ve already missed a payment, the notice of default is the moment that it transitions from being an ethereal, unreal issue to being a concrete problem with your mortgage holder.

Federal mortgage servicing laws require mortgage payments to be behind a certain number of months before this notice can be served to a mortgage holder.

It’s only a notice of delinquency status – not a filing with the State of Florida.

Florida foreclosure laws start with this notice. It’s required that the lender files this with the homeowner to let them know that they are behind on payments and need to catch up. It’s a formal notice for homeowners in Florida who’ve experienced financial hardship and are now late on their payments.

This is only the very first step, and it’s just a notice of the delinquency status. If you’ve gotten a notice of default in Florida, sometimes called a breach letter, then you aren’t facing foreclosure yet. At this point, getting back on track just means catching up those missed payments, which will only be a few. There is also likely a late fee that you’ll have to pay in this instance.

Foreclosure sales take a while

Though it can feel oppressive and overwhelming, there is some time to get things in order before you get to a foreclosure sale. In Florida, it usually takes around six months for a home to be foreclosed on.

That may not sound like a very long time, but it’s enough time for you to jump into action and make some smart decisions about what steps you’ll take. You don’t have to just let that time tick away. Do the best thing for your situation and take as much preemptive action as you can before you get to that judgment date.

In most cases, it’s possible to prevent things from getting to that foreclosure sale date. It’s all about negotiating with the lender and being creative about what you’re doing in the meantime.

What are the options if you’re behind on your mortgage?

Homeowner packing up home in foreclosure

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If you’ve fallen behind on your mortgage payments, Florida homeowners have options to avoid foreclosure. Here’s what you can do:

  • Catch up missed payments
  • Ask the lender for a loan modification
  • Sell the home and use the funds to pay off the loan

Everything that you could possibly do to remedy the situation falls under one of these three categories.

Catching up on mortgage payments

If you’re able to catch up on the missed mortgage payments, then the foreclosure process will grind to a halt. This could happen with a personal loan, family support, or by taking on additional work to get those funds.

In times of financial hardship, that can seem to be an impossible task, especially if you are behind on property taxes or other home related costs. Struggling homeowners catch a hard time with many Florida mortgages when they get behind.

Pursuing loan modification

Getting a loan modification is a fantastic solution. This might mean temporarily reducing payments, changing the length of the loan to add on missed mortgage payments, or it could mean reducing fees and penalties. The loan servicer wants you to catch up in most cases because foreclosure is costly for everyone involved.

Often, a mortgage holder will be willing to work with a homeowner, following the grace period laid out in the mortgage contract. When the mortgage company agrees to new terms, that agreement constitutes acceptance of the modification.

Foreclosure action, including judicial foreclosures, will stop when the loan modification goes through. Mortgage lenders are interested in loss mitigation. Through loss mitigation, they are able to preserve the loan without having to do a foreclosure sale, which almost always results in the lender coming out upside down on the loan.

Keep in mind that this doesn’t take care of past due property taxes or other housing related expenses – it only handles the loan itself. Florida law allows the homeowner to deal with these things separately, but it’s still on you as the homeowner to handle all of these different things.

Selling a Florida house behind on payments

Pursuing a short sale or even a traditional home sale is another way to avoid a foreclosure sale. This is a final solution to the mortgage problem that you’re having, and it will allow you to move on without having anyone file a summary judgment motion and without you having to find foreclosure lawyers.

Federal and state laws allow you to sell your home at any point in the litigation process, even if you are still behind on the mortgage payment. This is true whether the property is your primary residence or if it’s a secondary residence.

This kind of sale will stop the monthly payments, but it will also affect your credit score. How much it affects your credit score will have to do with many factors. The good news is that selling the home will affect your credit score less than a foreclosure judgment.

Look for potential buyers who will give you fair market value for your home, but keep in mind that a quick cash home sale might save you money in the long term. Late fees and penalties can add up fast. Judicial foreclosures work through the system within a few months, and you’ll want to get the home sold fast if you want to avoid a personal judgment.

What protections are there for homeowners?

Federal foreclosure laws protect homeowners from being pushed out of their property without the proper procedures being followed.

There are a lot of protections out there for homeowners in Florida, whether you have a federally backed mortgage loan or are in an owner occupied residential property. There is federal money, as well as money through the Florida Department of housing that will help prevent getting a deficiency judgment.

Local agencies in the area where you live can help you find your way through all the lawyer talk, as these agencies interpret the legalese for homeowners facing foreclosure situations.

During the pandemic, President Joe Biden signed the American Rescue Plan Act, which provided lots of additional support for eligible homeowners. State foreclosure laws were preempted by this legislation, and it allowed the court to grant judgment cases to stop for the time period.

The Florida Homeowner Assistance Fund is another great option to pursue before the court grants summary judgment against you, the homeowner. The Florida Homeowner Assistance Fund provides not only money to help bring you back in the black on your loan, but it also can provide legal counsel.

Talking to an expert is essential if you have experienced a financial hardship that prevents you from paying your mortgage payments.

Working with a foreclosure attorney

Speak to a foreclosure attorney if you are unsure about what Florida department regulations apply to your specific situation. The attorney client relationship will protect your sensitive or confidential information, and you can feel comfortable telling them the whole situation. Be sure to find an attorney advertising their expertise in foreclosure.

A law firm that specializes in foreclosure sale options will be able to guide you through what you can do. Be aware that if you are texting an attorney, message and data rates apply. An attorney in this situation will be costly, but you can always pursue support from Florida legal aid or through homeowner preservation resources from the State of Florida.

Make the most of your time with the foreclosure attorney by bringing all of your paperwork to any meeting that you have with them at their office. The more prepared you are, the more they will be able to help you figure out what the best course of action is.

Taking action is the most important part

home in foreclosure in Florida

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No matter what course of action you decide to pursue to try to prevent foreclosure in Florida, the key is to start taking action as soon as possible.

A summary judgment motion asks that you relinquish control of the home and mandates that you are evicted from the property. No homeowner wants to find themselves in that situation, and you shouldn’t have to. A foreclosure sale is the last resort for this process, and it’s something that you shouldn’t have to face. Even if you have struggled with financial hardship recently, whether it’s because of a job loss, a divorce, the passing of a loved one, health problems, or a natural disaster, you still deserve to have a place that you can call home in Florida.

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