Foreclosure 101: Foreclosure Basics


Nancy E. Cason

Foreclosure is the legal process that your Lender must follow to foreclose your mortgage and force the liquidation of your property. Generally, when you acquire a parcel of real property you sign both a Promissory Note and a Mortgage. The Promissory Note establishes your obligation to pay your Lender in accordance with the terms of the Promissory Note. The Homeowner signs the Promissory Note evidencing their obligation to pay the indebtedness. The Mortgage is a document that secures your repayment obligations under the Promissory Note to your real property such that, if the Homeowner defaults under the terms of the Promissory Note, the Lender can then foreclose the Mortgage. If the Lender prevails, the Court will order that the property be sold at foreclosure sale.

Commencement of Foreclosure/Service of Process

A Foreclosure action is commenced by the filing of the Foreclosure Complaint and Lis Pendens. A summons is issued and the Lender is then required to serve all persons who have an interest in the property it seeks to foreclose. This includes all owners of the property, all other inferior mortgage holders (ie, second mortgage holders, Lenders on home equity lines of credit, etc), tenants in possession, the spouse of the property owner (for homestead property) and any person or entity that has a lien on the property or any other interest in the property the Lender seeks to foreclose (judgment holders, contractor liens, homeowners and condominium associations, etc).

Generally, service of process is accomplished via personal service pursuant to the Florida service of process statute, substitute service (example: service on a spouse or other family member who is 15 years or older and resides at the residence with the person seeking to be served). However, if personal or valid substitute service cannot be had, the Lender, after undertaking a valid diligent search for the person it seeks to serve, can obtain service of process by constructive service, sometimes also known as service by publication. Publication requires that notice of the foreclosure action be published in a local newspaper in accordance with the constructive service statute.

Foreclosure Judicial Procedure

Once a person or entity is served with a Foreclosure Complaint they must file a responsive pleading within twenty (20) days of being served. If the person or entity served does not file a responsive pleading within 20 days, the Lender can move for a default, which, once entered, operates as an admission by the party to all of the allegations plead by the Lender in the foreclosure Complaint.

It is of the utmost importance that if you are served with a foreclosure complaint, to file your responsive pleading within 20 days to avoid a default being entered against you!!!!

The responsive pleading will generally take the form of a Motion to Dismiss, if appropriate, or Answer and Affirmative Defenses. This is the property holder’s opportunity to raise the defenses that they have to the Lender’s Foreclosure Complaint. Foreclosure Defense is discussed in part 3 of my Foreclosure 101 series.

Once the initial responsive pleading is filed, the next step would be for the Lender to file all of the paperwork necessary to support its Motion for Summary Judgment of Foreclosure. As a general matter, those documents would include, but are not limited to, the filing of the Motion for Summary Judgment of Foreclosure requesting entry of a Final Judgment of Foreclosure, a Notice of Hearing setting forth the hearing date, the filing of the original note and mortgage, any assignments of note and mortgage if there has been a transfer, Affidavit of Amount Due and Owing submitted by the Lender, (where the Lender certifies through a person relying upon business records or with personal knowledge of the matters set forth in the Affidavit, under oath, how much is due and owing from the Homeowner on the loan), an Affidavit of Legal Costs, an Affidavit of Attorneys Fees and an Affidavit establishing that the Attorneys Fees the Lender seeks to recover are reasonable. The Twelfth Judicial Circuit has a Foreclosure Summary Judgment Checklist setting forth the requirements that every Lender seeking to foreclose on ANY property must file with the Court when it obtains its summary judgment hearing time. This Foreclosure Summary Judgment Checklist can be found on the website of the Twelfth Judicial Circuit at The foreclosure link is located at the bottom middle of the homepage and contains a lot of great information on the foreclosure process in the Twelfth Judicial Circuit.

If the Lender has followed all of the requirements of the Twelfth Judicial Circuit and Florida Law for foreclosure of the property and all defenses raised by the Defendants have been addressed by the Court and the Court finds that the Lender is entitled to foreclosure, the Judge will enter a Final Judgment of Foreclosure and set a foreclosure sale date. This foreclosure sale date will be approximately 30 days or so from the entry of the Final Judgment of Foreclosure. The foreclosure sale is then advertised in a local newspaper. Your Lender is entitled to a credit bid at the foreclosure sale in the amount of its Final Judgment of Foreclosure. At the foreclosure sale, anyone can bid on your property; however, as a general matter, if nobody outbids your Lender (which is common if the mortgage debt owed is more than the property value), your Lender will likely be the successful bidder at the foreclosure sale. At the foreclosure sale, a Certificate of Sale is issued establishing who the successful bidder at the foreclosure sale was. If there are no objections to the sale, the Certificate of Title is issued to the successful bidder ten (10) days after the foreclosure sale date.

In Florida, property owners have what is commonly referred to as a “Right of Redemption” which means that, at any time after the foreclosure process is initiated and up until the foreclosure sale date, the property owner can tender all sums due to the Lender and redeem the property. If someone outbids your Lender at the forclosure sale and there are sums left over from the bid amount after the Lender is paid in full its Final Judgment amount, the remaining funds are called the “surplus.” If there is a surplus, those funds are retained by the Clerk of Court and the property owner, and any other person who claims entitlement to funds, can apply to the court for disbursement of the surplus proceeds, but there are strict time frames involved for anyone claiming surplus proceeds that must be followed.

If uncontested, the foreclosure process will still take several months. If contested, it will most definitely take up to a year or more before the foreclosure process is completed. While you are in foreclosure, you DO NOT have to move out of your home. If you want to keep your home DO NOT move out of your home upon being served with the foreclosure complaint. I recommend that my clients take the time that they are in the foreclosure process to evaluate their various foreclosure prevention options and pursue the options which are in their best interest. In the meantime, I recommend that clients who are able to do so, save the funds that they would have spend on a mortgage payment in a separate account. This way, if the end result is ultimately foreclosure, they have the funds that they need to relocate themselves and their family. If a foreclosure alternative is achieved, the money is available to assist the Homeowner in implementing the foreclosure alternative plan.

Florida is also a “recourse” state meaning that, in addition to foreclosure of the property, your Lender may also be entitled to pursue a personal judgment against the Homeowner (only the one who signed the Promissory Note) which is known as a “Deficiency Judgment.” In order to be entitled to a Deficiency Judgment, the Lender must establish that the fair market value of the property on the date of the foreclosure sale was less than the amount owed in the Final Judgment. Deficiency Judgments are not automatic. Rather, your Lender must apply to the Court for a deficiency judgment and present the evidence necessary to support a Deficiency Judgment. You can also present any legal and equitable defenses you have in opposition to your Lender’s request for a Deficiency Judgment. In Florida, you WILL get your day in Court and it is a Circuit Court Judge that makes the final determination of whether the Lender is entitled to a Deficiency Judgment and the amount of that judgment. This judgment operates like any other judgment and entitles the judgment holder to collect on any non-exempt assets that the Homeowner may have.

A very wise person once told me that you can handle anything that comes your way if you plan for the worst and hope for the best. The worst case scenario in a foreclosure action is that your Lender takes back the property, obtains a Deficiency Judgment against you and proceeds to undertake asset collection efforts on that judgment. Your credit rating will also be significantly impacted by foreclosure. Remember, they can only take your non-exempt money and property, not your liberty. You cannot go to jail.

The good news is there are many other alternatives far short of the worst case scenario and an overwhelming majority of the forclosure cases I have handled have been resolved without an ultimate foreclosure judment being entered. You must act quickly upon receipt of your foreclosure Complaint to file the necessary documents to work towards achieving a foreclosure resolution that is in your best interest. A foreclosure defense attorney works closely with you to evaluate your unique circumstances to achieve the best possible outcome for the property owners in foreclosure.

Post is a section from “Foreclosure 101: The Basics Of The Foreclosure Process In Sarasota, Manatee And Desoto County
by Nancy Cason, Esquire, Attorney at Law with Syprett, Meshad, Resnick, Lieb, Dumbaugh, Jones, Krotec & Westheimer, P.A.

Foreclosure 101: The Basics Of The Foreclosure Process In Sarasota, Manatee And Desoto County (4 Part Series by Nancy Cason)
-> Foreclosure 101: Foreclosure Basics (Part 1)
Foreclosure 101: Foreclosure Alternatives (Part 2)
Foreclosure 101: Foreclosure Defense (Part 3)
Foreclosure 101: RMFM & Conclusion (Part 4)