Jacksonville Real Estate Law & Foreclosure

Understanding Florida’s Foreclosure Laws

It is a lien theory state, which means that a mortgage borrower receives the deed to the property at the time of purchase. The alternative is title theory, under which the lender holds the deed until the loan has been paid off. In a lien theory state, the mortgage holder has a lien on the property and can move to foreclose in the event of a default. In other words, lien theory states consider that the homeowner is the legal owner of the property, whereas the bank owns the home in title theory states. The fact that Florida is a lien theory state means that you, as the homeowner, actually have an advantage in the real estate foreclosure process.

Judicial Foreclosure in Jacksonville

One aspect of Florida’s status as a lien theory state is that it requires the bank to carry out a judicial foreclosure. Non-judicial foreclosure is possible in many states, and it allows the lender to foreclose without any outside intervention. Judicial foreclosure, on the other hand, gives you the opportunity to contest the action because the bank has to take you to court. Before they can take your property, they must first sue you for a judgment of foreclosure. If you can defeat their claims in court, then the judge will rule in your favor and allow you to keep the home.

Right of Redemption After Foreclosure

In the event that you lose the case in court or if you fail to contest the action and end up with a default judgment against you, you still have recourse through what is known as your right of redemption. By paying off the amount by which you are in default, in addition to any fees that may have been assessed by the bank, you can cure the mortgage and reclaim your home before the property is sold. Even if it is sold, you still have up to 10 days after the sale to prove that the bank made mistakes in executing the court order for foreclosure, and if this can be done, then you could still reverse the action.

Deficiency Judgments Allowed in Florida

In some areas of the United States, foreclosure is the worst thing that can happen to a homeowner who goes into default on a mortgage. You may lose your home, but once that happens, the worst is over. This is not the case in Florida. State law allows the lender to sue you for a deficiency judgment, which could mean that you would still end up owing money even after losing your home under certain circumstances. If, like many homeowners, you have an underwater mortgage and you owe more than your home is worth, the foreclosure sale will not likely raise enough money to pay off the loan. When this happens, the bank may obtain a deficiency judgment to hold you liable to pay the remaining loan balance. To learn about strategies that may be used to prevent such an outcome and perhaps even save your home, contact The Law Offices of Justin McMurray, P.A. now for a free consultation with a Jacksonville foreclosure and real estate defense attorney.