I hear these words from foreclosure clients every day, and it makes me cringe. I wonder: How many good people continue to do nothing because they are paralyzed by their current economic situations and fear of losing their homes?
I want to know what caused your situation, and I want to help you implement a plan of action.
I cannot help you, though, unless you are willing to help yourself. Waiting for government assistance is a losing proposition. Why? The government is not trying to save your home. Only you can take the first step. Organize. Prepare. Fight. Those are the words I say back. You are not alone. And foreclosure is not to be taken lightly. The people who stand a chance are the ones who take action.
Even if you decide to give the home back to your lender and move, there are ramifications to each and every decision that you make, which is why you need the best information you can put your hands on. We encourage our clients not to panic upon receiving foreclosure papers; however, if you just put the foreclosure papers aside and decide not to deal with them, you should be worried. Have a great sense of urgency now, as your decision not to act could have severe consequences.
- A foreclosure complaint is not like a bill you can just throw on the pile with the others and get to it when you feel ready. What are the consequences of ignoring the foreclosure complaint?
- Your options shrink as time passes. Once you are served with the complaint, you only have 20 days (it can vary—sometimes 30) to respond. Setting an appointment with an attorney to figure out your defenses is crucial, and you most likely will not be able to get in to see an attorney right away. Keep in mind that just because you are behind on your mortgage payments and have been served with a complaint does not mean you don’t have a defense—on the contrary, these days there are many different types of foreclosure defense available. The attorney needs time to assess and map out your case with care.
- The Judge Will Grant A Default Judgment. By not responding to the foreclosure complaint, you are sending a sign to the court that you are not interested in answering; therefore, the judge will have no alternative but to proceed accordingly and default you for failing to respond. The judge will then most likely grant a summary judgment, and the sale of your house will be allowed from that point.
- Your Home Will Be Sold At Auction. Yes, it’s true. Your house can and will be auctioned off to the highest bidder, who is often the bank. At this point, sadly, you would be forced to make a plan of a different kind—and that is where to go next. The new buyer receives the title to your home ten days after the sale. A Writ of Possession may be posted on your property if you are still there, and the sheriff may be called to remove you and your personal property. And no, it doesn’t end there…
- A Deficiency Judgment May Be Granted Against You. After the home is sold, a deficiency judgment may be entered if the home sells for less than what you owe on the mortgage. At this point, you are liable to the lender for the amount of the deficiency. With real estate prices being so low these days, this happens more and more. Keep in mind this does not take into account the balance you may owe on a second mortgage or equity line if you have one.
- Tax Implications Arise. This creates an entirely new set of problems for the homeowner. Some people may be eligible for tax exclusions, while others may not. Either way, you need to know what the tax implications of foreclosure will be. In each and every case, we strongly encourage our clients to sit down with their tax advisor to discuss what their exact tax liability will be.
It’s all too common that homeowners in your predicament will procrastinate because of numerous emotions rendering them almost helpless to take the first step to action. Many people feel very alone when the challenge of possible foreclosure rears its head. The truth is, you are not alone. There are many thousands of people going through exactly the same thing you are—right here in Southwest Florida. Some people work to save their homes, while others choose a different route. At your free consultation, we can discuss an action plan tailored to fit your needs.
While the foreclosure process can take an emotional toll on individuals and families, the reality is that inaction may cause more problems for you in the future. Now is the time to take the first step. In Florida, you have the privilege of responding to the foreclosure complaint, and it is crucial that you do so; otherwise, actions may be taken without you, and both your home and your finances may slip out of your grasp.