Whether you or a loved one are currently dealing with it, or it is a reality that you might face soon, going though a foreclosure is not an easy process. Florida residents are well aware that foreclosures have been plaguing the state, making it at or near the top of the list for the highest rate of foreclosures in the nation. In order to better deal with the enormous backlog of foreclosure cases, legislation was passed in hope to improve the process. Although adjustments have been made, individuals and families are still significantly affected while going through the foreclosure process.
The Department of Housing and Urban Development (HUD) announced some changes and updates in their October 28 mortgagee letter. For cases that initiated their first foreclosure legal action after November 1, 2013, these changes will apply. Specifically, the changes updated the schedule for both claimable attorney’s fees and the time frames for reasonable diligence for the initiation foreclosures on FHA-insured loans, which also includes Home Equity Conversion Mortgages (HECMs). The changes will affect both federally insured forward and reverse mortgages.
Although the state foreclosure requirements have undergone substantial changes, HUD has not updated its guidance since 2005. The recent updates place a limit on the amount of fees that attorneys can claim. In addition, they also require that foreclosures be prosecuted in a specified time frame. Most jurisdictions have experienced an increase in attorney’s fees claimed, generally by a few hundred dollars, and an increase in time frame, generally by a month or two. States with significant backlogs, including Florida and New York, were granted larger increases.
At any stage in the foreclosure process, individuals and families should educate themselves about the process while also preparing for the future. It is advisable to gather all necessary paperwork that relate to the mortgage and personal finances. Speaking directly with the lender could help address any missed payments or default. This ideally takes place when foreclosure is initiated and could result in an option to refinance and keep the home.
Throughout the process, Florida allows for an Equitable Right of Redemption, which provides the defaulted property owner the right to recover the property prior to its sale by paying the appropriate fees and charges incurred. In order to accomplish this, it is suggested that financial planning takes place.
The foreclosure process is not an easy event to go through. Furthermore, additional hardships are endured when a party is not properly educated about the process or informed about the recent changes to the procedures. Those struggling to navigate through the foreclosure process should seek out guidance to aid them in their defense.
Source: Reverse Mortgage Daily, “HUD Adapts Foreclosure Process for Reverse Mortgages,” Alyssa Gerace, Nov. 4, 2013
Additional links:
- Mortgagee letter
- https://entp.hud.gov/qckstart/sfsclaim.cfm
- http://portal.hud.gov/hudportal/HUD?src=/states/florida/homeownership/foreclosure
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