According to Florida law, creditors such as mortgage lenders must file a lawsuit before a specific date to collect debt and foreclose on a property. If the creditor doesn’t meet the deadline, it might not be able to enforce that debt.
If you haven’t made mortgage payments and your creditor hasn’t filed a foreclosure action against you yet, check to see how much time it has before the deadline passes.
What are the Statutes of Limitations?The statutes of limitations are the laws that specify deadlines for various types of lawsuits. For example, if a creditors files a lawsuit against you after a deadline passes, you can use the expired statute of limitations as a viable defense.
What About Mortgage Foreclosures and Deficiency Judgments in Florida?A mortgage lender can only foreclose on a property if it has brought forth a lawsuit to the court. If the lender successfully receives a judgment of foreclosure, the court will then sell the mortgaged property at a foreclosure sale.
A lender can also request that the court enter a deficiency judgment against you if the property doesn’t sell for as much as it takes to pay off the amount of the original judgment. In this case, you would be liable for paying the difference owed.
What is the Time Limit for Foreclosures in Florida?
The lender has five years to file a lawsuit, which starts at the date of default.
What is the Date of Default in Florida?If you take a look at your mortgage loan documents, you will find your default date. But this usually starts at the time when you have failed to pay your mortgage when it’s due – or failed to pay it during an accepted grace period.
Basically, your lender has five years from the due date of the final payment to file a foreclosure action against you in Florida.
Through the Mortgage Debt Relief Act of 2007, taxpayers are able to exclude income from the discharge of debt on their main home. Homeowners who have either mortgage debt that has been forgiven as a result of a foreclosure or decreased debt as a result of mortgage restriction are eligible for relief. Homeowners who had debt forgiven between 2007 and 2014 qualify for up to $2 million of this exclusion. However, if the discharge of debt isn’t directly related to the home’s decreased value or the homeowner’s financial status, the exclusion won’t apply.
Here are some of the important points concerning the cancellation of debt.
What is the Cancellation of Debt?
You aren’t required to report the income from a loan you receive from a mortgage lender when you file taxes because you have to repay it. If a mortgage lender happens to forgive or cancel the debt, though, you would have to report it. In this case, the mortgage lender would use a 1099-C form to report the amount of debt it has canceled to both you and the Internal Revenue Service.
Example: If you borrow $50,000 and default on the loan after repaying the lender $10,000 of it, there will be a cancellation debt of $40,000 that could be taxable.
Is Cancellation of Debt Income Always Taxable?
In certain situations, the IRS doesn’t tax income from the cancellation of debt. This happens if the debt was discharged through bankruptcy, canceled when you were insolvent, incurred while you were operating a farm, or associated with a non-recourse loan.
If you find yourself in a situation where you’re facing a foreclosure, you’ll probably receive mail from a mortgage loan modification company that promises to help you rescue your home. As vulnerable as you might feel, take heed that most of these offers are scams. Here’s what you should know about mortgage modification scams, and whether you should hire legal representation for an upcoming trial.
Mortgage Modification Scams: What You Need to Know
If you’re facing a foreclosure, you likely feel susceptible to too-good-to-be-true offers – and scammers know it. While an offer might look and sound official, it’s only because scammers know how to use deceptive strategies to win your trust and get you to inquire about their mortgage modification services. To trick you, they might:
- Name companies to sound like they’re affiliated with federal agencies
- Claim that they’ve helped many in your exact position
- Declare that they’re backed by a reputable real estate attorney
- Promise a money-back guarantee and that they’ll save your property
The Answer: Yes, You Should Have Legal Representation
Optimally, you’ll talk with an attorney right after you receive a mortgage modification offer. But if you’ve already fallen to a mortgage modification scam, take immediate action by hiring legal representation to help you during the trial. Your real estate attorney will guide you along each step of the process.
If you’ve fallen victim to a mortgage modification scam, make sure you report it to the authorities right way – your local Better Business Bureau, your state Attorney General’s office, or the Federal Trade Commission.
If you own a house and haven’t received payments from the buyer in an owner-to-owner transaction, you’re probably wondering how you should proceed. Do you foreclose, or do you evict? Here’s what to keep in mind when deciding.
Start With a Foreclosure; Follow With an Eviction
When you start the eviction process, you do it in hopes of removing the occupant from your property permanently. While you might have to take this step further in the future, begin with a foreclosure so you can reclaim the property’s title. To succeed in doing so, you’ll need proof of your continued mortgage payments (as made by the original owner). Remember that you can also argue for continued interest payments or the equity that you’ve gained since initially signing.
Remain Patient and Persistent During the Foreclosure
Unfortunately for the original owner, the foreclosures are complex and can take some time. The first step you should take is to serve either an accelerated or a default notice, letting the occupant know that he or she has 30 days to pay what’s owned. In addition to the usual court costs, you should also financially prepare to hire an experienced real estate attorney since foreclosures are a bit tricky.
If the occupant in your property fails to make payments after an owner-to-owner sale, you should start the foreclosure process. Once the acceleration or the default notice passes its deadline, you might have to follow by starting an eviction process.
For more information, contact a real estate attorney who can help you.
When a foreclosed property has been sold and its title has been transferred to a new owner, the first decision he or she must make is whether to turn off the utilities in his or her new home. Although every foreclosure sale is different and comes with its own determining factors, there are laws in place that outline how to move forward.
New Title Holders Absorb Continuing Utility Costs
As part of the transfer process, the new title holder assumes the duty to cover any continuing utility costs. This can include fees in addition to electricity and water, like garbage pickup, sewage and street cleaning. Although the new title holder is entitled to immediate ownership of the foreclosed property in question, he or she must first obtain a writ before shutting off the utilities. This law protects tenants from the act of ‘self-help eviction’ or an eviction without the proper authority.
Remember That Tenants Might Still Occupy the Foreclosed Property
There are situations in which tenants who haven’t violated their agreement with the initial owner still occupy the foreclosed property. As the new title holder, you can either agree to allow the occupants to continue residency or ask them to vacant. Keep in mind that they are protected from eviction for a certain period of time. Also remember that utility companies offer numerous options for this specific situation.
For more information about foreclosure sales, contact a real estate attorney today.
It’s conceivable that a mortgage lender could take months or years to start a foreclosure process after a homeowner has stopped making payments. That said, it’s important borrowers get to know about the statute of limitations and the time limits it sets for various legal proceedings. Here’s a little more information about the statute of limitations and how it affects your first and your second mortgages.
What is the Time Limit Established by the Statute of Limitations?
A statute of limitations is an established time limit for starting a legal claim. There are various types of legal proceedings that include a statute of limitations. Each has a different time limit based on the kind of claim or action involved.
Let’s examine the statute of limitations as it relates to foreclosures. If a statute of limitations expires prior to a mortgage lender starting the foreclosure process, his or her claim legally becomes invalid. If this situation should arise, the mortgage lender isn’t authorized to foreclose on your home. But remember, time limits vary depending on the state you live in. Contact a real estate attorney for information.
More Important Information About the Statute of Limitations
In addition to differing time limits, remember that every state has its own statute of limitations – Florida’s statute of limitations for mortgages is five years. Although most states have a statute of limitations in the three-to-six-year range, some extend as far out as 15 years. Check your state’s statute of limitations for more information about how much time you have once you default on your payments.
When a homeowner goes through a foreclosure process, he or she will deal with a lot of paperwork, notices and actions. For someone who isn’t well versed in real estate law and proceedings, the paperwork and court hearings can seem confusing – and intimating. One action that sometimes arises during a foreclosure is called a judicial default.
Defining Judicial Default
By definition, according to the online foreclosure glossary, a judicial default is, “a binding judgment in favor of either party based on some failure to take action by other party. Most often, it is a judgment in favor of a plaintiff when the defendant has not responded to a summons or has failed to appear before a court of law.”
To put it in more obvious terms, a judicial default is a default issued by a judge.
How Does a Judicial Default Impact You?
As it relates to homeowners, a default judgment, when it concerns a mortgage default, can result in the closing of a foreclosure case and allow the sale of a defendant’s property in a public auction. A homeowner will usually receive a 10-to-30-day notice informing him or her about the lender’s plan to file the foreclosure action with the court. A homeowner will then have 20 to 30 days to respond from the time he or she receives the notice. The process could take weeks or months.
Everyone is required to sign stacks upon stacks of paperwork upon purchasing a home, but how many pages actually are important during a foreclosure process?
A promissory note is a document signed by the home buyer when purchasing a house that shows the buyer borrowed money from the lender. In most cases, the lender is a bank, but in other cases, an individual is the lender for the purchase of property. A promissory note is stored wherever the lender prefers, whether it is in a safe or on the counter at their home.
For those that don’t choose a safe location for their promissory note, they risk misplacing or losing the promissory note. What could this mean for a foreclosure case?
While a promissory note is required to show proof of debt in a foreclosure case, there are ways to work around a lost promissory note. Before proceeding with the case, the lender must sign an affidavit of lost promissory note. In instances where a case was dismissed and the lender chose to re-file, but lost the promissory note in between the previous and new case, the lender can simply claim a lost promissory note.
Regardless of the previous case’s result, a lender has the ability to re-file if they feel their case regarding the foreclosure and mortgage debt is stronger.
A foreclosure notice is never an easy document to receive, especially after pouring your heart and soul into creating the home you’ve always wanted. You’ve done everything you could have, but there just isn’t enough money rolling in to keep up with the steep bills and fees that come with owning a home. When a foreclosure notice is received, some may question what happens with their homeowner’s association debt.
Depending on who handles homeowner’s association fees, the foreclosure process can begin in a couple different ways. Fees are dealt with by the individual in jeopardy of losing his or her home to a foreclosure only if he or she is trying to keep the home. Doing so will prevent others from filing for a lien to take the home during the process. During a foreclosure case, it is possible for the homeowner’s association to try to take possession of the home through a lien.
If keeping the home is no longer an option, then the bank will most likely pay the debt acquired from the homeowner’s association. That amount will go towards the Deficiency Judgment after the foreclosure sale of the house. In another case, the homeowner’s association can possess the individual’s property through a lien by filing a suit for foreclosure to the court.