With the current pandemic beginning to wind down and businesses are beginning to open back up again, I wanted to speak to those people who will be facing foreclosure in the coming months. Many people are now realizing that they will have to pay back all of those months of payments they have been able to “skip” due to Federal or State Mandates. These mandates have prevented lenders from foreclosing and may have forced them to give homeowners a forbearance. Some of the forbearances state that the homeowner must pay back all of the missed payments at one time. This may not be possible for a growing number of homeowners who were furloughed or laid off from their jobs during the time when our society was locked down.
Other homeowners who weren’t able to get a forbearance during this time, but also weren’t able to make their mortgage payments will be hurting just the same. The lenders might not have been able to file a foreclosure action during the pandemic but might be able to in the coming weeks or months. It is very important to understand what your options are. I have helped many homeowners to obtain a Loan Modification both before and after a foreclosure lawsuit has been filed. This Loan Modification allows the homeowner to, in a way, restructure the original loan and get back to making regular monthly mortgage payments. Sometimes, depending on the individual circumstances, those monthly payments are even lowered.
However, not every homeowner is able to get a loan modification. There is always the possibility that due to the homeowner’s very specific circumstances, the lender will not approve the loan modification and the property will end up going through the lengthy foreclosure process in the Florida courts and will be put up for auction. But this is not necessarily the end. Once a property is sold at auction, there might be surplus funds left over after any subordinate lienholders have also been paid.
Florida Statute 45.032 controls the disbursement of Surplus Funds after a Judicial Sale. It states in part, “the owner of record on the date of the filing of a lis pendens is the person entitled to surplus funds after payment of subordinate lienholders who have timely filed a claim.” This means that even after going through the very stressful process of foreclosure, you might be able to get some sort of relief. For instance, the property is foreclosed on and you owed $100,000 at the time of sale. If the property sells for $150,000, then once the lender is paid its portion, there is a surplus of $50,000. If there are any subordinate lienholders that have timely filed a claim, then they get paid from that and anything else remaining belongs to you, the former owner. If there are no subordinate lienholders, or if they don’t file a claim for the surplus on time, then all of the surplus belongs to you.
This is why I say that the foreclosure sale may not be the end for you. It is important to hire a qualified Florida Foreclosure Surplus Funds attorney who knows the law and can help you retrieve those funds. Even though you have lost your home, some good can come from the foreclosure sale and I can help. Give me a call for a free consultation. I handle Foreclosure Surplus Funds cases in every County in the State of Florida and I don’t get paid unless you do.