The most significant thing you can do to help your situation after being served with a foreclosure action is to file a responsive pleading in the foreclosure action to avoid a ‘default’ and a ‘default judgment’.

If you do not respond within the permitted time, you are at risk of a ‘default’ and a ‘default judgment’.

Most foreclosure cases go unresponded to. You can see for yourself by looking at the cases and the responses. And you can also see that the cases that go unresponded to are generally the ones that the mortgage holder obtains a judgment on more quickly.

By avoiding a default and default judgment, you can usually obtain more time to either bring the loan current, restructure the loan in a modification, or sell the property, including a ‘short sale’.

By selling your property instead of ‘just letting it go’ you mitigate the damage to your credit and your bring forward your future eligibility to buy a home again in the future.

Although borrowing or getting another mortgage loan in the future might seem like the last thing in the world you would ever want to do, in time, all things pass, and it is important to ‘play the long game’.

These are ‘life altering decisions’.

Don’t concern yourself with other peoples’ judgments.

This is an existential threat to your well being and a time to be looking out for yourself and your family, and only yourself and your family.

If this bad situation is not handled as optimally as possible, you will be hindered in your future ability to obtain credit or in finding housing in the future (or you will pay thousands more than what you could otherwise pay for the same things and miss out on a place you really wanted to other tenants who had better credit or handled a bad situation better than just walking away).

Your future landlord is going to know how you handled (or didn’t handle) your mortgage foreclosure. It’s all public record, easily available for all to see. How you handle this can help or hurt you. Will your future self thank you for the sometimes painful but necessary things you are doing today to confront your problem, or will you look back on this time with still further regrets upon other regrets? It’s time to draw a line in time. The mortgage holder has done so, and you must respond.

The die is cast; the battle is joined. They will have the Sheriff forcibly throw you out of the home if necessary and will leave your belongings piled on the curb outside if you let them.

Don’t let them do that to you and your family.

You have rights.

Florida is a ‘judicial foreclosure’ state.

The bank or mortgage holder can’t conduct a private sale of your home.

Rather, the mortgage holder must follow a statutory process they or they might have to start over again (and you get to stay while they do).

You are allowed to make the mortgage holder prove its case in court

We can help you assert your ‘affirmative defenses’ that the bank then must overcome by valid proof.

We can file discovery requests and make the mortgage holder produce relevant documents, and they are not allowed to proceed in court until they respond to our discovery requests.

Among other things:

You have the right to make them prove that they own your mortgage loan. Sometimes they don’t. The mortgage holders and servicers trade mortgages like little boys trade baseball cards. Mistakes happen. They don’t like to admit it. There are known circumstances.

You have the right to make them prove that they did not break the mortgage regulations when they originated your loan.

You have the right to make them prove the amount due has been calculated properly and that they are not over-assessing you for excessive fees and costs, including attorney’s fees. The bank’s lawyers cannot get excessive fees.

The mortgage servicing companies are not innocent and are not your friend. They are out to get your property as soon as they can so they can make more money by referring it to their real estate company. Rocket Mortgage recently purchased Redfin. Their stated goal is to increase origination but you can bet they intend to feed Redfin their foreclosed mortgages. You can either be grist for the foreclosure mill law firms that preyed on borrowers with the robo-signing and fraudulent misrepresentations $9.3B scandal in necessary foreclosure affidavits by all the major banks in which they misstated the plaintiff’s ownership of the note or the amounts due from the borrowers often piling on excessive fees and costs to their cronies.

Do you or should you really trust them to be on the level this time around? We don’t.

Bad behavior in loss mitigation by the banks is not ancient history confined to the history books. As recently as 2021 Wells Fargo was hit with a well-deserved but insufficient $250M penalty for its loss mitigation and mortgage servicing practices.

We remember The Great Recession and the fraud perpetrated on the public and borrowers by the mortgage industry as a whole, including the origination of mortgage and the collection practices, and lying to them about available workout options.

You should not feel any guilt or remorse about invoking your rights.

The mortgage holder is a faceless corporate adversary

You and your family are flesh and blood and your survival and mental and physical well-being is more important than an intangible ‘legal’ person like a bank or mortgage servicing company.

The men and women at the mortgage holder are not suffering by your exertion of your rights. They might get a slightly lower bonus for not taking your house sooner than you and their private equity bosses would otherwise like, but they are not going to not miss any meals or have to sleep in their car or move back in with other family or otherwise rely on the kindness of strangers, etc., which is what you are facing.

Mr. Schneider is an experienced transactional real estate attorney and a veteran of The Great Recession, opening his first title company in 2005 in Brevard County, Florida which was ‘ground zero’ in the foreclosure crisis.

He has assisted THOUSANDS of people in the sale of property in the foreclosure process and in ‘short sales’ prior to the mortgage holder filing the foreclosure.

Sell Now, Don’t Wait:

Nobody knows what is going to happen but real estate market cycles tend to be long in nature and if you are stuck in the middle of a down part of the cycle while also facing foreclosure, if you have equity (sale price higher than what you own including costs of sale), it is likely better to ‘cash out’ while you can and try to start over in another place as a tenant or move in with other family, whatever it takes, now is not a time for pride. If history is to guide, the market slide that started in the second half of 2024 is likely to continue for several years. You can’t bet on anything better or you are going to lose out to the math. While you sit and wait for the market to recover, your debt is accumulating and accruing interest “at the highest rate permitted by law” which in Florida is usually 18%!!!

If you don’t know if you have equity, it’s not hard to find out.

Short Sales:

Often the best loss mitigation option is the sale of the home, hopefully while you still have equity.

Before you go much further in the process, you should consider obtaining a comparative market analysis from a local real estate broker and an estimate of what you would net on the sale of the home.

You might be pleasantly surprised to find out that you can still sell the house and pay off the entirety of your debt.

You simply don’t know until you ask a professional.

Even if you don’t have equity, you might be able to sell the home for less than what is owed by a ‘short sale’.

Short sales were prevalent as a loss mitigation option in response to The Great Recession and the ‘foreclosure crisis’ that followed.

Many people who sold their home in a ‘short sale’ were able obtain a release of their personal obligation under the promissory note and were able to buy a similar home in a similar neighborhood a few years later and ‘start over’ and participate in the market appreciate that followed The Great Recession.

If you are a tenant who has been served in a mortgage foreclosure suit because your landlord is not paying the mortgage while you are in good standing paying your rent in a timely manner, it may seem absurd that you should be brought into the suit as a defendant, but the mortgage holder is required to join you (“unknown tenant in possession”) as a necessary party or be vulnerable to dismissal of the case or ineffectiveness as against your rights as the tenant, meaning that the mortgage holder would be able to obtain title to the property but not be able to obtain possession because you have a right to possession which was not adjudicated in the foreclosure, thereby hindering the mortgage holder’s ability to sell the property for best value to mitigate the mortgage holder’s loss (or “make it whole”), which is the goal in the foreclosure case from the mortgage holder’s perspective.

It’s not fair, but it’s reality. You’ve paid your rent and still you’re getting sued because your landlord is getting foreclosure.

This is not a bad dream. You are a defendant in a lawsuit and you need to respond or you lose your rights to make certain objections in the case, like any rights you have under the lease.

The ‘unknown tenant’ on the case name is going to be replaced with your name and future landlords might not have the savvy to understand that you did nothing wrong.

What’s more is that your landlord can sue to recover rent from you even while your landlord is not paying its mortgage. This is an absurdity that Florida law permits in some circumstances.

We can help you try to avoid being caught in between a foreclosing mortgage holder or homeowners (HOA) or condominium association, and allow you time to get out of a bad situation, or possibly help you buy the home from your landlord!

Yes, you might be able to buy the home from the landlord, no guarantees but we have experience handling these types of deals and can help you try to do it too.

It definitely can’t happen unless you are proactive and ask the landlord to try to sell to you and try to get the mortgage servicer to either let you take over the payments or take a ‘short sale’.

Don’t go it alone!! Call us before you stop making your payments!!

We can help you plan ahead the best personalized course of action for you and your family to obtain the best possible outcome from a bad situation.

Know Before You Owe (Late Fees and Default Interest)!!