The foreclosure process is either judicial (through the courts) or non-judicial (outside the courts). I notice there are a few Californians here on the short sale blog. California is most commonly non-judicial foreclosure through power of sale. Most of my short sale purchases are in Florida which is judicial foreclosure. So I say, give ear now and listen to why foreclosure defense – particularly in judicial foreclosure states – can be the short sales best friend.
First things first, I’m not an attorney and nothing I write is to be considered legal advice. I strongly urge homeowners facing foreclosure to seek a qualified attorney. Let me share with you why: because filing an answer and particularly an answer with affirmative defenses, counterclaims, and in many cases mortgage rescission, increases the likelihood that the short sale will be accepted and with a full release of liability.
I’m in the unique position of being a short sale expert, owner of a mortgage company, and owner of a loss mitigation company. I own an FHA and VA approved correspondent mortgage lender in the State of Florida (member of the BBB since 1996) and this is also where my loss mitigation company is located, and Florida is the state where I purchase the majority of my short sales. As I mentioned above, Florida is a judicial foreclosure state. This means the lender files a lawsuit against the homeowner to get the house back. If the homeowner can get past the fear factor, then what they will find is that filing an answer in response to the foreclosure summons/complaint is like punching the proverbial grade school bully in the nose.
The biggest problem is (and lenders count on this fact) that if (in Florida) the homeowner does not file an answer within twenty-days of in-hand service, then the allegations in the plaintiff/lender’s complaint are generally admitted as true. You might say, the borrower didn’t make his or her payments and so what kind of answer can be filed? That’s probably true, the borrower didn’t make the payments on time, but that doesn’t mean there isn’t a response, defenses and counterclaims.
Because of my unique position of having knowledge of how the mortgage industry works from the inside as an insider, and my passion and commitment for the consumer, I haven’t taken the housing meltdown lying down. I’ve been networking with the best consumer lawyers in the country these past several years and lifting the hood of the mortgage industry to pick apart problems and violations that only insiders can identify. The short version is that I make a point to find at least one violation on every mortgage loan that is the subject of one of my short sales. What many people do not understand is that many of the alleged violations that some in the forensic loan analysis industry ‘identify’ provide no private right of action for the homeowner. In other words, as egregious as the violation may seem, there is no remedy for the borrower and of course that doesn’t help their case. I make a point to find violations that provide a statutory award, plus actual damages and an attorney fee award on every one of my short sales.
Now, I’m not advocating lawsuits; I’m advocating fairness and an equitable resolution via a short sale with full release. I believe lenders (as well as borrowers) understand the earthly meaning of this verse: “[a]gree with thine adversary quickly, whiles thou art in the way with him; lest at any time the adversary deliver thee to the judge, and the judge deliver thee to the officer, and thou be cast into prison.”
Yep, foreclosure defense in Florida, you hear what I’m saying – file an answer.
Paul Jerome Buys Short Sales (702) 430-9390
Host of the Broken Credit Blog
Owner of Seller Helps Buyer
Owner of Mortgage in Minutes
I Buy Short Sales Throughout the U.S.A.
