As a real estate attorney at one of Florida's leading foreclosure defense law firms, I've had plenty of prospective clients come to my office after being served with a foreclosure notice. It is safe to say they are usually not in a good mood; they are usually scared.
And the truth is I would be too. Foreclosure can be a scary process for even the most legally astute homeowner.
When a homeowner walks into my office for that first time, there is one question that comes up almost every time. It's a basic yet very essential question to anyone under the threat of foreclosure...
What do I do next?
It may seem obvious, but there is one thing I would advise a homeowner to never, ever do -- and that is nothing.
Sadly, that is the option I have seen too many homeowners take. Sometimes they see an unfamiliar lender's name on the notice, and assume it's a mistake. Or they believe that foreclosure is inevitable, and there is nothing they they can do to fight it.
The clock is ticking
Either way the reality is this: how long a homeowner waits to address a foreclosure notice has a direct correlation to the options that will be available to them.
In most states, you have 20 to 30 days to reply to a complaint; here in Florida it is 20 days.
In my experience, homeowners who don't respond will probably end up with a clerk's judgment and in default.
If a homeowner puts up no defense, it gives the banks permission to mow them over and get them out of their house as fast as possible. The key to surviving the foreclosure process is time. The more you have, the better. So once you get served, don't wait one second.
At the bare minimum, I suggest writing to the court. That could be enough to at least grant you more time to consider your options.
Get legal counsel in your corner
Whenever possible, it is always in a homeowner's best interest to hire a competent and experienced foreclosure defense attorney.
Is that a self-serving statement coming from me? Perhaps, but that doesn't mean it isn't true.
The chances of successfully fending off the foreclosure threat increase when you have legal counsel. The unfortunate truth is that it is harder to go into court without an attorney. I've seen it too many times. It's like bringing a pea shooter when your enemy has an armored tank. Like it or not the playing field is not level.
Most people who go into court think that they will be able to address the judge at length, and many come in with all the right documents and are extremely prepared. Yet homeowners will usually find their hearing will end in the time it took me to write this sentence. (There's a reason Florida's foreclosure court has been referred to as a "rocket docket.") That's why an attorney, if you can afford it, is crucial. Any experienced foreclosure defense attorney has done battle with the banks before, and will not be intimidated by the banks' tactics. There are legal aid and non-profit options, but be wary of anyone who guarantees a winning outcome.
Engage the banks
Whether you have an attorney or not, it is imperative to get a copy of every single document relating to your home loan. It's imperative that every homeowner knows who owns their note and their mortgage, because chances are it is not the bank they got their mortgage from in the first place.
Even after robo-signing became part of the national lexicon, I've found that many homeowners still do not realize this. There are still plenty of missing or fraudulent documents turning up in our cases. It is imperative that every homeowner make the bank prove that they own the mortgage, and that they have the legal standing to bring a foreclosure before the court. There isn't any reason not to challenge the validity of those documents. Stand your ground, and never leave a home until the deputy is at the door to kick you out.
Even if a homeowner does end up having to move out, I feel strongly that any homeowner who makes the bank prove its case will be able to come out ahead of the game in the long run.
Short sales are finally a viable option
Increasingly, I am finding short sales to be the best and most viable alternative to foreclosure, not only for homeowners but for the banks.
Homeowners who agree to a short sale will no longer be saddled with the debt of an underwater home, and banks are increasingly offering borrowers thousands of dollars to legally walk away from their home.
Some homeowners would rather move on to a more affordable home, and a short sale is the best way to accomplish that.
After fighting with the banks for years about short sales, I am now finding it is the lenders who are actually encouraging them, because it costs them less money than foreclosing.
But the bottom line is the choice should belong to the homeowner, not the bank.
As I always tell my clients to tell the banks: Bring it on!
Real estate attorney Roy Oppenheim is the co-founder of Oppenheim Law in Fort Lauderdale, Florida, and Weston Title. He is also creator of the South Florida Law Blog, where he frequently provides "In the Trenches" commentaries.