If my home is in foreclosure, can the lender lock me out of my home?
The answer to that question is: No. Once they file the mortgage foreclosure action, they have to conclude it and get what they call a “certificate of title” showing that they’re the owner before they’re entitled to possession. Even after getting the certificate of title, they must apply to the court for what they call a “writ of possession” before they are entitled to have you removed from the property and take possession of the property.
If the property is abandoned – meaning that there’s no one living there – the lender does have a right under most mortgages to secure the property. And they hire contractors to go out and change the locks and to maintain the property, cut the grass and basically make the property look like it’s not abandoned.
We’ve seen any number of abuses and very aggressive contractors going out and changing locks even though someone may be maintaining the property. However, if you’re living there, I can assure you that they will not come on the property to change the lock. Or if they do, simply call the police, 911, and have them arrested for breaking and entering if they attempt to change the locks on your house.
If you go away on vacation and come back and see they’ve changed the locks, all you have to do is break in and take their locks off because it’s still your property. So you’re not divested of that property until such time as the mortgage foreclosure has been completed. They get a certificate of title and then they have the occupant – whether it be a tenant or you if you’re living there – obtain a writ of possession. If you have tenants there, the tenants have the right to remain in the property for the balance of their term under a federal law that allows tenants to remain in possession even after the mortgage foreclosure.
If you have any questions about your mortgage foreclosure or would like representation, give me a call at (727) 847-2288.
If my home is in foreclosure, can the bank take money from my bank account?
Well, the bank cannot, unless you bank with the same lending institution where you have your mortgage. So if you have a bank account with Bank of America, and you also have your mortgage or line of credit with Bank of America and you go in default, they may exercise the right of offset to take money out of your account.
If, however, you have your mortgage with Bank of America, and you have your bank account with any other financial institution, Bank of America has no right to attach any of your assets or your bank account whenever you go into foreclosure.
A foreclosure action is one wherein the lender is taking back their collateral, which is called a foreclosure. They are not suing for a money judgment.
In order for them to obtain a money judgment, they must file a supplemental proceeding after the foreclosure action. That’s called a “deficiency judgment action.” And then, if they do obtain a deficiency judgment, they’re then in position to garnish your bank account, or take your bank account or any other assets other than your home or other assets that you may own as husband and wife.
So the answer to the question is: No, the bank cannot take your money or your assets just because they file a mortgage foreclosure action unless you’re banking with them and they may have some right of offset.
If you’d like to talk to me or set up an appointment to discuss foreclosure action, please call me at (727) 847-2288, and I look forward to seeing you.
What is the Save Our Homes Amendment? It is an amendment to the Florida Constitution that caps the annual increase in the assessed value of your home. Whenever you apply for homestead exemption, you receive the Save Our Homes assessment. This keeps your tax bill from rising, as a result of the assessment, by no more than three percent in any particular year. Your assessment is capped at the cost of living increase or three percent, whichever is less. These past few years it’s been very, very small. (This amendment has been in effect, I think, since 1996 or ’98.) But anytime that you apply for a homestead exemption, you’re entitled to the Save Our Homes Amendment which locks in your assessed valuation for the year in which you apply for homestead exemption.
They’ve added a feature to this amendment which allows you to transfer your exemption if you buy another home in Florida- that’s called portability. You have to buy a home within two years in order to be able to transfer your Save Our Homes Amendment valuation to your new property. (There’s a formula that is pro rata if you’re upsizing or downsizing on how they calculate the benefits you have.) If you’ve been a resident of Florida for some time, you’re able to transfer it if you buy another property here in Florida and sell your old property. You do have to notify the property appraiser that you do wish to use portability in transferring your Save Our Homes assessment.
So it caps your assessment and was passed back in the ‘90’s whenever we had fast depreciation, particularly in waterfront property. People who were on fixed income were getting priced out of their homes because they couldn’t afford to pay the taxes. So, they passed this amendment in order to keep people in their homes and not have the tax bill go so high that they couldn’t afford to stay in their homes. The longer you stay in your home, the better you’ll like it. Of course, with the recent decline in property values, the value of Save Our Homes has diminished substantially, but it’s always a nice in a depreciated market. If you buy now, you’ll love it if you stay in the same house, hopefully in about five or six years when the prices take off again.
So if you have any questions about the Save Our Homes Amendment, give me a call at (727) 847-2288.
What is a deficiency judgment? A deficiency judgment is the amount of the money judgment that a lender can obtain whenever they foreclose on the property and after the foreclosure sale.
The amount of the deficiency judgment is the difference between the amount that is owed to the lender at the time of the final judgment, less the market value of the property on the date of the foreclosure sale. Many people are very concerned about deficiency judgments, but my experience has been that most lenders at this point are not pursuing deficiency judgments after they foreclose on the property.
Many people are very concerned about whether or not a lender can take any of their bank accounts or has a judgment against them when they file a foreclosure action. Not only does the lender not have a right to any of your money, they don’t have a judgment against you for a money judgment that can be collected against any of your assets, even after the mortgage foreclosure or the foreclosure sale.
In order to establish this judgment, the lender has to go through a supplemental proceeding (or a deficiency judgment proceeding) in order to establish the amount of the deficiency judgment. This is somewhat technical and therefore many of the lenders (from my discussions with this legal community in West Pasco) have not pursued these deficiency judgments.
So, until such time as the lender establishes deficiency judgment, you do not owe the lender any money, or it has not been reduced to a judgment amount to determine the amount of it. Also, if you go through a foreclosure, you won’t get a 1099 because the amount has not been established.
If you have any other questions about deficiency judgments, give me a call at (727) 847-2288. Thank you.
Who can foreclose a piggyback mortgage? Well, first let’s talk about a piggyback mortgage. Piggyback mortgages were used to avoid having to obtain mortgage insurance whenever you acquired a home. The purchaser would borrow 80 percent loan to value for a first mortgage, which would not require any mortgage insurance.
They would then see about getting a second mortgage, which was a home equity loan (for either 10, 15, or whatever amount they could obtain over and above the 80 percent) so they would have a very small down payment. Home equity loans do not require mortgage insurance, so they would avoid the mortgage insurance premium that would have to be paid if they obtained, let’s say, a 95 percent loan to value.
So the question then becomes, “Well, who can foreclose?” If you don’t make the payments under the first mortgage, they have the ability to foreclose and take the property away from you. If you don’t make the payments on the second mortgage, well, they can foreclose also. In this day and time, though, value of property has decreased so much that there’s usually no, or very little equity in the property – so the second mortgage is basically unsecured.
The second mortgage holder (if you didn’t pay them) can sue the borrower on the promissory note and probably just avoid the foreclosure process. The first mortgage holder could foreclose its first mortgage and include the second mortgage holder in the foreclosure action and wipe out any lien that the second mortgage holder would have.
Sometimes this is a little bit problematic when the first mortgage holder and the second mortgage holder are the same lending institution. In this case, the question becomes, “Can they sue themselves?” Many times they don’t, which then raises another question in the event of a foreclosure where the second mortgage is not included – whether or not you’ll have a problem if you buy the home at a foreclosure sale and be required to pay the second mortgage holder.
So an answer to the question “Who can foreclose a piggyback mortgage?” – either party can, if you default under either mortgage.
If you have any questions about foreclosures (whether it be piggyback or otherwise), give me a call at (727) 847-2288. Thank you.