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Foreclosure Alternatives

When a homeowner has been delinquent in mortgage payments, the lender may seek a foreclose on the home.

The lender will begin the process by petitioning the court in a judicial foreclosure proceeding. Before the documents are filed, a complaint is filed in county court along with what a lis pendens, which provides notice that the property is being foreclosed upon. The court will issue its ruling, then final judgment of a foreclosure legal claim. If the court rules in favor of the lender, the property may be sold at a public sale or at auction.

When the foreclosure is against a business property, it can be devastating for the companies currently conducting business at the location. When the property resident is the owner of the property, we may be able to assist you in negotiating an agreement with the lender to restructure the payment structure or develop an acceptable payment plan to get caught up. If the operating tenant is not the owner of the property, there may be legal standing to keep the property operational to continue to conduct business through the current leasing agreement.

Florida foreclosure activity in the first quarter decreased less than 1 percent from the previous quarter and was down 19 percent from a year ago, but the state still posted the nation’s highest state foreclosure rate: one in every 129 housing units with a foreclosure filing during the quarter; for Orange County, one in every 133. Florida foreclosure activity has decreased annually for the past three consecutive quarters, including the first quarter. 

 

Short Sales

With a Short Sale, the property owner – often the lender – has agreed to accept less than the remaining debt owed on a property, and to release all associated liens. The agreement does not necessarily release a borrower’s obligation to pay the remaining debt – it only allows for the property to be resold without the balance attached as a lien.

Short Sales are used as an alternative to foreclosure when appropriate. A short sale can mitigate additional fees for the borrower, and allow for his or her credit to be less adversely affected.

“Realtors® are strong supporters of the Mortgage Forgiveness Tax Relief Act to prevent underwater borrowers from paying taxes on any mortgage debt forgiven or cancelled by a lender after their home is sold for less money than is owed. 

Loan Modifications

A Loan Modification is another option for those facing a mortgage delinquency. The mortgage is essentially rewritten: a new interest rate, additional repayment years can lead to a smaller monthly payment. Any past delinquency is usually added to the back end of the mortgage, allowing the borrower a chance to catch up on payments. Loan Modifications do not adversely affect a borrower’s credit score.

Florida Real Estate Statistics and Foreclosure Trends Summary – RealtyTrac Real Estate