Procedure for Foreclosure on Property

By Attorney Nemia L. Schulte

QUESTION: I am several months late on my mortgage payments and my mortgage bank is threatening to foreclose on my home. What is the process of foreclosure and how long does it take?

ANSWER: Foreclosure is the legal process a financial institution, or your mortgage bank, must take in order to obtain repossession of your home and to divest you, the debtor, from any interest in your home. Once the foreclosure suit is filed, it can take as short as 2 1/2 to 3 months to complete.

When you purchase a home and obtain a loan from a bank in order to purchase the home, your home becomes the collateral to secure the bank's loan to you. Many people assume a foreclosure is like a repossession of your vehicle by the bank. Although your vehicle, like your home, is the collateral that secures your vehicle loan with the bank, the bank can repossess your vehicle in the event you default on the loan without resorting to any court action against you. Generally, this is done by the bank hiring a "Repo Man" who looks for your car, and then takes all necessary (peaceful) actions to repossess it. This is called "self help" because the bank is helping itself to retaking possession of your vehicle without taking any court action against you. Also, should you not be able to make the vehicle payments on your car, you can voluntarily surrender it to the bank (which may later sue you for the difference in the amount it sold the vehicle for and the amount of your loan to the bank).

However, unlike a bank's repossession of your car, a mortgage company cannot resort to such type of self-help. In addition, even if you voluntarily surrender your home to the bank, the bank must still go forward to foreclose on your home in order to obtain possession and clear title. The primary reason for this is because although the mortgage bank is the true title "owner" of your home, the bank will need a court order to obtain clear title and to make sure that you no longer have any legal ownership to the home. Why does the bank want clear title? It cannot sell the home without it.

The process of foreclosure is generally as follows: The mortgage bank sends you several demand letters requesting that you make all the payments in arrears. If you are not able to do this, the bank will then hire an attorney who will start a foreclosure action (or lawsuit) against you. Like with any other lawsuit, the bank, through its attorney, will file a Complaint and Summons against you with the Circuit Court in the county in which your home is located. The Sheriff's Office or a process server will then serve you with copies of the Complaint and Summons. You will then have 20 days from the date you were served with these documents to file your Answer (or other responsive pleadings). If you do not file an Answer during this time period, the bank will obtain a default judgment against you. However, even if you file an Answer denying that you owe the money, the bank still will more than likely file a Motion for Summary Judgment (or Motion for Entry of Final Judgment) against you.

Generally, the bank will set its Motion for hearing before the Court anytime within 2-4 weeks after you file an Answer. You must attend this hearing. If you fail to attend, the Court will enter a judgment against you. If you do attend, the Court will have a hearing to hear your side of the story. In foreclosure cases, your only defense is that you do not owe the money. The Court generally does not accept other types of defenses.

If the Court enters a judgment against you, the Court will schedule a sale of your home within no less than 30 days from the date of judgment. You will get notified of the sale date even if you do not attend the hearing. You will also get notified of the full amount the bank is entitled to collect from you (including, the loan amount, interest, attorney's fees, court costs, and other administrative costs).

The sale of your home will take place at the Courthouse, usually at the lobby or near the clerk's office. The starting bid of your home will be the judgment amount entered by the Court in favor of the mortgage bank. You, or any other person, can outbid this amount by one cent. The bank is not allowed to bid any amount higher than its judgment amount. The highest bidder (except the mortgage company) must pay to the clerk a certain amount (usually $1,000.00) at the end of the bid to secure his bid. He then has until the close of business day of that day to come up with the remaining amount.

The clerk of the court then issues the title of your home to the highest bidder (generally, the mortgage bank). The bank (or the highest bidder) now has legal title to your home, divesting you of all rights to the property.

Keep in mind that only a bankruptcy filing (Chapter 13) will stop a foreclosure sale. You may file for bankruptcy anytime prior to the sale to stop it.

The above scenario is provided in very simplified terms. If you have a foreclosure action pending against you, I suggest you hire an attorney to determine your rights and obligations.

Attorney Nemia L. Schulte practices in Pompano Beach, Fla. Visit her Web site at