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The Federal Foreclosure Moratorium is Over: What Florida Homeowners Should Expect?

After nearly 17 months, the Federal Foreclosure Moratorium was not extended, thus expiring at the end of July. Florida Governor, Ron DeSantis, ended the Florida Foreclosure Moratorium in September of 2020. What does the Federal Foreclosure Moratorium ending mean for Florida homeowners?

Well, before we jump into the actual foreclosure lawsuit, it is important to talk about the “Notice of Acceleration” clause that is in most mortgages. The Notice of Acceleration is generally found in Paragraph 22 of the mortgage, and requires the lender/servicer to send a letter to the owner of the property. This letter informs the homeowner that they are in default, must pay a certain amount to reinstate by a certain date, or a foreclosure case will be filed thirty days after the letter is sent. Once the thirty days is up, the foreclosure case will be filed in a timely manner by the bank.

From my experience of handling thousands of foreclosure cases throughout the entire state of Florida, I would estimate that about 90% of homeowners being foreclosed on want to keep their property, long term. In order to do this, there are three main options to keep the home.

  1. Payoff. This literally means you pay the entire mortgage balance up front. Hardly anyone chooses this option, as most homeowners don’t have that amount of capital handy.
  2. Reinstatement. This is an option that requires the owner to pay all the money owed, up front, from the time of the first missed payment. While this option is picked more than the payoff option, it is rare a homeowner reinstates for the same reasoning as a payoff, lack of money on hand.
  3. Loan Modification. A loan modification is by far the best way for a homeowner to keep their property. The main facts I look at in determining whether a homeowner would be approved are: what is the debt to income ratio per month for the household; what was the hardship that was incurred for starting to miss payments; when was the mortgage originated/or was there a loan modification in the past. All these factors will determine whether someone has a very high likelihood of being approved of the loan modification to keep the home.

Most importantly, if a foreclosure case is filed, DO NOT ignore the case. Even if you are working on a loan modification to keep the home, you very much need to protect your defense rights in the court case itself.

My prediction: We will not see an onslaught of foreclosures being filed until late 2021 into early 22. By April of 2022, I think Florida courts will have thousands of new foreclosure cases being filed.

My advice: Do not wait! Forbearance and moratoriums are only a short term fix. All delinquent Florida homeowners should work on getting a loan modification now, so that you won’t have to worry about losing your home in the future to a foreclosure auction.

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