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Foreclosures in Florida

January 2010 - By Kristopher Cruzada

Orlando Civil Lawyer Kristopher CruzadaIt's not difficult, these days, to see the economy effecting residents and businesses around Orlando. When will the economy start to recover? No one really knows. However, one can look to the number of new foreclosure filings as an indicator for whether or not the local economy is recovering. A positive indicator would be if the number of new foreclosure filings starts to decline.

Foreclosures are never good for a community. Once a house is foreclosed, problems start to mount. From lack of maintenance to code enforcement liens, a foreclosed home can become a blight to the surrounding area. If a borrower finds himself/herself in a situation where a recent hardship (loss of job, loss of spouse, medical problems, death in the family, etc. . . .) makes it difficult to afford the mortgage payment, a call to the Lender would be beneficial. A Lender can provide information of options that are available to the borrower at the default/pre-foreclosure stage.

One option available to borrowers is a loan modification. Generally, a loan modification is available to a borrower that primarily lives in the mortgaged residence. Lately, Lenders are beginning to try more diligently to work out or modify loans for homeowners that are in distress with their primary residence. Some types of modifications are interest rate reductions, principle reductions, payment reductions or a combination thereof. Often, the Lenders want to find out more information about your situation. Lenders ask common questions about home equity, employment and financial ability. This is to make sure that a borrower will be able to make payments after the modification is approved.

Sometimes, a Lender may not want to modify the terms of the mortgage. In these situations, the Lender may work with you to transfer title to the property. Transfer of title may be done by two methods a deed-in-lieu of foreclosure or short sale transaction. A deed-in-lieu of foreclosure is done when the Lender will accept title of the property from the borrower. The Lender receives title to the property in their name. Sometimes, in return, the Lender may fully waive liability to the original borrower for the mortgage debt. A deed-in-lieu of foreclosure helps the Lender because they don't have to spend time and resources in going through the foreclosure process.

The second method is a short sale. In a short sale, the Lender allows you to sell your home at a price less than the balance owed on the mortgage. The Lender must approve the sale. After approval of the short sale and the completion of a few conditions, the Lender will file a Satisfaction/Release of Mortgage to clear title for the new Owner. In a short sale transaction, like in the deed-in-lieu of foreclosure, the Lender may fully waive liability to original borrower for the mortgage debt.

Finally, the Lender may still choose to foreclose, if the above options have not worked. If you are served with foreclosure papers seek the advice of a lawyer. All is not lost when a foreclosure is filed, the lender for a number of reasons may wish to mediate and settle a case.