Foreclosure Update

As most are painfully aware, Florida foreclosures suffered tremendously last year after the discovery of apparent rampant fraud by both lenders and foreclosure attorneys in prosecuting foreclosure actions. Many existing foreclosure lawsuits came to a sudden halt, and new filings dropped significantly. As a result of this, along with the poor foreclosure practices of many large foreclosure law firms, Floridians discovered that it can take up to two years (or even more!) for a lender to foreclose on property. Thus, many homeowners of distressed properties chose not to hire an attorney to defend a foreclosure action, list the property for a short sale, or negotiate with the lender because of the belief that they could continue living in a home for possibly years without paying a mortgage or rent while waiting for the bank to foreclose. Many events are now causing this tide to change. First, in the wake of investigations by both the federal and state governments, lenders and many foreclosure attorneys cleaned up their previously shoddy foreclosure practices, and lenders began hiring smaller firms to file their foreclosure actions. Contrary to popular belief, a foreclosure action in Florida can take as little as 120 days if a lender properly files and aggressively pursues the action. Therefore, better practices and better foreclosure attorneys lead to faster foreclosures. In addition, condominium and homeowner associations are intervening in bank foreclosure actions to compel a speedy foreclosure – and winning. Finally, new legislation is being drafted which would allow lenders to foreclose without going to court in certain circumstances. Further, where a foreclosure lawsuit is required, all uncontested cases must have a final judgment in 45 days. Bottom line – the days of living in a home for years before a lender forecloses are coming to an end.

In last month alone, there was a significant increase in new foreclosure filings in both Sarasota and Manatee courts. In addition, both lenders and the courts are beginning to push the stagnant cases out of the court system. With approximately 45% of all homes in Florida still underwater, we may not see a decrease in foreclosures for quite some time.

It is very important for homeowners who are served with foreclosure papers to seek the advice of an attorney immediately. The owner has a short window of time to respond to the complaint without losing his or her rights to defend the action. In addition, a lender will not stall or delay a foreclosure proceeding simply because the property is listed or under contract for a short sale. For most homeowners, short sale is the best option for distressed properties. Because it can take three to six months (or longer) to close a short sale, the property should be listed sooner rather than later, and the homeowner should defend a foreclosure action to ensure that the property does not foreclose before a short sale can close. Berlin-Patten offers a wide range of foreclosure defense, short sale and other services based on the individual needs of a homeowner. We offer reduced flat-fee rates for foreclosure defense to our short sale clients and can aggressively defend an action if needed.

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