A UGUST 2011 • V OL 7 • I SSUE 4
DIGEST
WWW.AVENTURADIGEST.COM
Cuenca Cigars Of Hollywood: Pg 8
P UBLISHED B Y T HE S OUTH F LORIDA S UN T IMES
UNDERSTANDING THE FORECLOSURE PROCESS We all regularly hear about the “foreclosure crisis” going on in our country but what you may not know is that the situation in Florida is far worse than in any other state. According to the latest statistics released by the Mortgage Banker’s Association, Florida accounts for 23.7% of all foreclosures nationwide; which correlates to Evan M. Rosen 466,454 homes. Not only is this the largest number of any other state, it is larger than the total number of loans in 22 other states combined. The result is our courts are backed up with a caseload of 310,770 cases. Couple that with the termination of special court funding for foreclosure cases which took effect on July 1st and it appears the crisis in Florida is only getting worse. So how did this backlog swell to such an enormous figure? Why does it take so long for a bank to foreclose? This was not always the case, right? Well, we know that before Wall Street started selling shares of stocks in pools of mortgages through a process known as securitization, foreclosures could be handled within a few months. Now, in great part due to the banks’ rush to profit and lack of proper simple documentation required in any real estate or mortgage transfer, as well as the lack of complicated documentation required as a result of the securitization process, no one knows how long some cases will take because in many instances no one can properly prove who is entitled to foreclose.
Like every other plaintiff in any civil lawsuit, the plaintiff has the burden to prove all elements of their case by a “preponderance” or greater weight of the evidence. In a foreclosure action, the entity entitled to foreclose must successfully prove by this standard, among other things, that they are the proper party; the entity or person actually entitled to receive payments due under the terms of the note; and/or the party entitled to foreclose. This is generally referred to as “legal standing” and often, the banks cannot prove they have it. What follows is a chart illustrating the time periods in the pre-foreclosure and foreclosure process in Florida.
Bureaus update their reports Day 90
Lender/Mortgage Servicer sends file to attorney, Credit Bureaus update their reports
Day 90+
Any time after 90 days the entity claiming their entitlement to foreclose can file suit. In a scenario in which the entity seeking to foreclose is not the same entity as the original mortgagee or lender, and with competent counsel, this process alone can take more than 12 months.
PRE-FORECLOSURE TIMELINE
FORECLOSURE TIMELINE
Day 1
Payment due, no payment made
Day 1
Day 7-10
Call from Lender/Mortgage Servicer
Complaint and Lis Pendens are filed and served with a summons on the property owner.
Day 16
Late charges begin to accrue
Day 20
Day 20-25
Call and letter from Lender/ Mortgage Servicer
Day 30
Default reported to Credit Bureaus and Lender/Mortgage Servicer sends second letter
A responsive pleading is due. If not filed, plaintiff moves for default judgment. With competent legal counsel, there can be a multitude of legitimate issues raised via motions, hearings, and discovery requests which would extend this time period greatly.
Day 40
Lender/Mortgage Servicer sends letter with payment options
Day 45 – 60
(If not represented by competent counsel) - Court schedules hearing for default
Day 60
Lender/Mortgage Servicer sends demand letter or “Acceleration Notice,” Credit
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