Don’t Abandon Your Property!

Why Just Letting the Bank Take Your Property Could Present a Real Problem:

 Your home is underwater. You owe more on the mortgage than the property is worth. Maybe hundreds of thousands of dollars more. You cannot afford the mortgage payments, the homeowners’ association dues, the property taxes, and the upkeep. Why not let the Bank take the property? Why shouldn’t you just mail the keys back to the Bank and let the Bank sort it out?

With thousands of mortgage foreclosure lawsuit being filed each month in Florida, it appears that not just a few homeowners and investors are choosing to ignore the problem and head for the hills. Many of these lawsuits are won by default for failure of the homeowner to file a response to the complaint of foreclosure.

Be careful.  Ignoring this particular problem could have consequences you could not possibly have imagined.

For example, pursuant to Rule 1.560(b) of the Florida Rules of Civil Procedure, the lender may request that the Final Judgment of Foreclosure include an order requiring the judgment debtor to complete a Fact Information Sheet (Form 1.977) within 45 days of the entry of the Final Judgment. The Fact Information Sheet is a form of interrogatories in aid of execution that was adopted by the Florida Supreme Court in 2000. The information sought includes the judgment debtor’s income, employment information, bank account information, motor vehicles owned by the judgment debtor, real estate assets, paycheck stubs, income tax returns, and any other such financial statement or loan applications submitted within the last three years.

Most importantly, this Rule specifically states that “Failure to obey the order may be considered contempt of court.” Civil contempt is defined as the failure to do something ordered by the court for the benefit of a party to a civil action. Accordingly, it is within the court’s power to issue an arrest warrant against a judgment debtor who refuses to complete the Fact Information Sheet. It is becoming increasingly common for aggressive lenders to pursue entry of an order of civil contempt against a party who continues to ignore a judgment creditor’s legal right to discovery of the debtor’s financial condition as part of the creditor’s efforts to collect on deficiency judgments. In other words, the legal system does not let you simply ignore or walk away from the problem.

While your situation may seem hopeless, relief may be had by attacking the problem head-on. Keep open communication with your lender and explore loan modification options. If that doesn’t work, hire a Realtor that specializes in short-sales immediately, to assist you in the sale of the property.  And if you decide to pursue a short sale, with some persistence, your lender may even agree to waive their right to pursue the loan deficiency balance remaining after the sale of the property or negotiate a lesser amount.

If you have been served with a foreclosure lawsuit, hire an attorney. Your attorney can assist you in defending the foreclosure, buy you additional time to obtain a short-sale, and also assist with your negotiations with the lenders. Making this effort to mitigate your damages can result in a reasonable settlement and may help you escape liability for a large amount of debt.