Abstract
When borrowers fail to pay their debt, lenders have a right to recover their loans from borrowers. There is a judicial foreclosure process that every lender has to follow in state of Florida. The state of Florida has witnessed very high rate of foreclosure in recent times in comparison of other US states. There is no other process of foreclosure in the state of Florida while other states provide other states provide alternative ways to foreclosure. Florida is not the only one state where judicial foreclosure is the sole process of foreclosure, but there are several other states that believe in judicial foreclosure and do not provide other alternative ways other than judicial foreclosure. The rate of foreclosure in Florida is higher than other states of the United States of America. State of Florida provides abundant opportunities to lenders, as well as, borrowers in order to ascertain a fair process of foreclosure.
When a buyer fails to repay his loan or violates any other provisions of contract, lender has a right to recover his money from borrower by selling the property that is kept as security. Lender has to follow a specific process for recovering the debt. This process is known as foreclosure. There are different procedures of foreclosure in different US states. This paper proposes a discussion on judicial foreclosure in the state of Florida.
Lender has to file a lawsuit in a court of law. The process of foreclosure is initiated when a complaint is filed by the lender in a court of law and borrower is served summons with a notice period of twenty days to reply (Crawford & Coleman, 2003). If borrower fails to file a reply within the provided time, he loses his case and lender succeeds in getting a default judgement by the court in his favor. State of Florida and courts provide ample time to parties to decide cases. It takes 2 to 3 years in deciding foreclosure cases in state of Florida which is much lower in other states. A number of cases are decided uncontested, while others are decided in court trial (Maeda & Houck, 2010).
In case, borrower files a reply, the lender can opt to file for summary judgement or he has to face the court trial. Motion of summary judgement can be decided in favor of the lender if there is no dispute in the case and borrower has no prima-facie defense for non-payment. This is a speedy process and ends very soon. Motion of summary judgement is usually decided in favor of lender and against borrowers. Courts decide cases in favor of lenders quickly if it is found that there is no reasonable defense on part of the borrower.
If it is found by the court that there are some defenses on part of borrower, lender’s motion of summary judgement can be denied. The procedure is advanced to trial where lender and borrower are given opportunities to substantiate their case. Court takes a final decision on the basis of facts, circumstances and evidences of the case. If court find that defendant’s arguments are strong, court does not pass order of foreclosure immediately, but if court finds that there is no strong defense to support the case of defendant, the court passes foreclosure judgement.
Once judgement of foreclosure is passed in favor of lender, court clerk initiates the process of sale of foreclosure on the direction of court of law. Usually this process should be completed between 20 to 35 days, however this period can be increased with the mutual consent of parties. A notice has to be published for two consecutive weeks in newspaper before sale of foreclosure. On the date of such sale, the foreclosure property is sold to the highest bidder that has to be a third party.
Once sale is completed, the property belongs to lender and known as Real Estate Owned (REO). The borrower can file his objection within a period of ten days regarding bidding amount and court may look into the mater, if claim appears to be reasonable. After ten days of foreclosure sale, court clerk issues an owner certificate and property goes to its owner i.e. builder. The lender has a right to file for deficiency judgement that takes place after the foreclosure sale (Irlander, 2009).
If lender’s money is not recovered from the foreclosure sale, lender can move into court for the recovery of rest of his money. Deficiency judgement is a separate process and court considers this procedure in a lenient way. After foreclose sale, the property belongs to new owner and he has every right to take possession of his property. He may mutually take possession himself by offering some cash or something else or he may move into court for the same.
Usually the process of eviction is a part of foreclosure sale, but the new owner has to follow a small process for possession. New owner approaches the court with the title, issued to him after the foreclosure sale. He files a writ of possession motion and once his motion is granted by the concerned court, court issues a writ of possession. As per the commandment of this writ, new owner gets possession of purchased property within twenty hours. If new owner finds it difficult to get possession of his property, he may take help of sheriff (Crawford & Coleman, 2003).
After going through the procedure of foreclosure in state of Florida, it can be concluded that the foreclosure process is judicial where lender and borrower are provided ample time and opportunity to present their case. No haste decision is taken and none is subjected to unnecessary sufferings. The process is lengthier than other US states, but following this process ensures less errors in the procedure of foreclosure.
References
Crawford, L.L., & Coleman, D.S. (2003). Florida Real Estate Principles, Practices & Law. Chicago: Dearborn Real Estate.
Irlander, S. (2009). Florida Real Estate: Principles, Practices, and Law: Principles, Practices, and License Laws. Mason, OH: Cengage Learning.
Maeda, M., & Houck, M.D. (2010). The Complete Guide to Preventing Foreclosure on Your Home. Ocala, FL: Atlantic Publishing Company.
