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How to Avoid An Imminent Foreclosure

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Financial hardships can be unexpected and stressful. If you have fallen behind on more than 4 mortgage payments, a foreclosure sale may be coming your way. The idea of losing a home can make one feel powerless and unsure of a way out.

In some cases, there may still be ways to halt the foreclosure process. Obtaining the help of a Miami foreclosure defense attorney can ensure you achieve the best possible outcome. To educate individuals on their options, here are the last minute strategies offered by our experienced lawyers to stop foreclosure.

File for Bankruptcy

If the foreclosure sale is imminent, you can stop the sale by filing for bankruptcy. Immediately after filing, an “automatic stay” goes into effect. The stay prevents lenders from collecting debt by foreclosing on the debtor’s home. The lender could attempt to circumvent an automatic stay by filing a motion. However, even if the motion is granted, it will be at minimum one to two months until it takes effect.

In the past, debtors would agree to surrender their home in a Chapter 7 bankruptcy in order to eliminate their mortgage debts, but then fight the foreclosure in court. Since the Florida foreclosure process is the lengthiest in the country, homeowners who did this were able to live in their home without making payments for many months.

To address the issue, Governor Rick Scott signed Senate Bill 220 into law in March of 2018,  creating Section 702.12 of the Florida Statutes. This law states that as of October 1, 2018, homeowners are unable to contest a foreclosure after agreeing to surrender their home in bankruptcy.

If a debtor would prefer to keep their home, filing a Chapter 13 bankruptcy is the best option. A Chapter 13 bankruptcy involves restructuring debts through a repayment plan. Over a period of three to five years, the debtor can repay any delinquent mortgage payments.

Apply for a Loan Modification

Although it is not advisable to wait until the last minute to apply for a loan modification, a debtor may be able to delay foreclosure through dual tracking. Dual tracking allows the lender to move forward with a foreclosure while a loss mitigation is pending. If a loan modification application is approved, the foreclosure remains stopped unless the debtor fails to make payments.

As of 2014, if a loan modification application is received more than 37 days before a foreclosure sale, the servicer may not move forward with a foreclosure until a decision is reached on the application.

File a Lawsuit

If the mortgage lender pursues a nonjudicial foreclosure process, then the debtor may file a lawsuit. This nonjudicial process occurs when the foreclosure is completed outside of the court. To win a lawsuit, a debtor must be able to prove the lender meets (on or all?) of the following criteria:

  • Cannot prove the lender owns the promissory note
  • Did not act in compliance with state mediation requirements
  • Violated the state’s Homeowner Bill of Rights
  • Did not follow the correct steps of the foreclosure process

Lawsuits can be very expensive and if the debtor has no basis for the above claims, one could get stuck paying attorney fees and the lender’s court costs. Consult with one of our experienced foreclosure attorneys to determine if there are grounds for a lawsuit.

Talk to an Expert

Now that you know the options to help stay an impending foreclosure, you should have an idea of your next steps. It is strongly advised that you contact one of our experienced foreclosure defense attorneys at Graham Legal, P.A. to get your questions answered in a free no-obligation consultation!

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