Foreclosure in Florida
Foreclosure is the legal process a lender uses to sell mortgaged property to pay a debt in default. States use one of two methods.
- Judicial foreclosure: the lender sues, and a court orders the sale.
- Nonjudicial foreclosure: the lender sells under a power of sale in the loan documents, without a court order.
Florida uses judicial foreclosure. Fla. Stat. 702.01 says all mortgages are foreclosed in equity, meaning by a lawsuit decided by a judge, not a jury.
The Florida process, step by step
- Default and acceleration. The borrower defaults, and the lender uses the acceleration clause to call the whole balance due.
- Complaint. The lender files a foreclosure lawsuit. For residential property, if the plaintiff holds the original note it must file a certification of that, under penalty of perjury, with the complaint (702.015(4)).
- Final judgment. If the lender wins, the court enters a final judgment of foreclosure that sets the amount owed.
- Notice and sale. The court directs the clerk to sell the property at a public sale not less than 20 nor more than 35 days after the judgment, unless the plaintiff agrees to a later date (45.031(1)). Notice must be published for 2 consecutive weeks before the sale (45.031(2)).
- Certificate of sale. After the sale, the clerk files a certificate of sale (45.031(4)).
- Certificate of title. If no objection to the sale is filed within 10 days after the certificate of sale is filed, the clerk files a certificate of title. That confirms the sale and title passes to the buyer (45.031(5)-(6)).
The equity of redemption
The equity of redemption is the borrower's right to stop a foreclosure by paying what is owed. In Florida, Fla. Stat. 45.0315 lets the mortgagor, or a holder of a junior interest, cure and redeem by paying the amount in the judgment (or, before judgment, the amount due including accelerated amounts plus the lender's reasonable foreclosure costs and attorney fees).
That right lasts until the later of:
- the clerk's filing of the certificate of sale, or
- a later time set in the foreclosure judgment.
The statute adds that otherwise there is no right of redemption. Some states give a statutory right of redemption that lets the former owner buy the property back for months after the sale. Florida does not.
Deficiency judgments
If the sale brings less than the debt, the shortfall is a deficiency. The borrower signed the note, so the lender may ask for a deficiency judgment against the borrower personally.
- In Florida, whether to grant one is within the sound discretion of the court (702.06).
- For owner-occupied residential property, the deficiency cannot be more than the judgment amount minus the property's fair market value on the sale date, not minus the auction price (702.06).
- An action to collect a deficiency on a one-to-four family residential mortgage must be brought within one year, running from the day after the clerk issues the certificate, or after the lender accepts a deed in lieu (95.11(6)(g)).
Alternatives to foreclosure
| Deed in lieu of foreclosure | Short sale | |
|---|---|---|
| What happens | The borrower deeds the property to the lender | The borrower sells to a third party for less than the loan balance |
| Lender's role | Must agree to accept the deed | Must approve the sale and the reduced payoff |
| Main benefit | Faster and more private than a court case | The property sells on the open market instead of at auction; the borrower avoids a foreclosure judgment |
| Deficiency? | May still be possible unless the lender waives it | Often waived by the lender, but not always |
Neither is automatic. A borrower cannot force a lender to take a deed in lieu or accept a short payoff.