When a foreclosure process has been initiated, the homeowner still has options available to them in order to prevent the lender from reclaiming the property. One option that may be attractive to homeowners who are having difficulties making mortgage payments is a loan modification. Mortgage lenders employ loan modifications to help homeowners who may become delinquent or are already behind on their mortgage payments. In a loan modification, the lender edits the original loan agreement terms to help homeowners reduce their monthly mortgage payments to a more reasonable figure.
However, when a foreclosure process has already been initiated, time is of the essence to pursue a loan modification. In Florida, the lender has to file a lawsuit in state court in order to initiate a foreclosure proceeding. Once a homeowner has stopped making payments, the lender files a complaint with the court and has it served to the borrower, along with a summons that provides twenty days for the borrower to file an answer to the complaint. If the borrower does not respond to the complaint within the specified amount of time, then the lender can get a default judgment from the court, which means that the lender automatically wins the case. However, if the borrower files an answer to the complaint with the court, then the lender cannot obtain a default judgment and the lender will either pursue a summary judgment hearing or trial.
During this time, a borrower would be wise to pursue loan modification with the lender. Although a lender may not be initially receptive to a loan modification once the foreclosure has been initiated, a successful loan modification agreement eliminates the hassle to the lender posed by pursuing a full trial, which is a great bargaining point for the borrower. It also means the lender would avoid having to sell the home to recoup their money.
If a judge has already decided a foreclosure case, it is still possible to negotiate with the lender for a loan modification. However, in this scenario, the lender has much more control over the loan modification terms, as they already have a foreclosure judgment to fall back on. In this case, it is highly recommended that the homeowner seek an experienced attorney to assist in understanding and negotiating the loan modification terms.
Keep in mind that loan modifications are considered one of the most difficult things to get approved without an experienced attorney’s assistance in a foreclosure process. If a lender is after your home, be sure to contact an experienced real estate attorney who will be able to examine your case and strategize the best way to save your home – including loan modification.
Stephen K. Hachey, a Florida real estate attorney, can help your wade through this process and determine a positive solution. Contact him at 813-549-0096.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.