Mortgage Foreclosure Disputes

What Is a Mortgage Foreclosure Dispute?

Mortgage disputes arise between a mortgage lender and borrower when they disagree on any of the terms and conditions of the mortgage agreement. That includes mortgage fraud, breach of contract, discrimination, predatory lending, and foreclosure.

Purchasing real estate involves a significant amount of money, so most people take out a loan instead of paying that amount in cash. In general, borrowers enter into a mortgage agreement with lenders to buy a home or other type of real estate. A mortgage is a contract that gives the lender the right to foreclose your home if you do not pay the loan on time. Furthermore, recording the mortgage documents in land records creates a lien on the property.

In addition to borrower and lender, the mortgage usually involves the third party managing the account for a fee. This third party is the servicer, which collects and processes loan payments. It also initiates and monitors foreclosure procedures.

Therefore, a foreclosure is a legal process enabling the lender to sell the borrower’s property if the borrower fails to make payments on time or breaches the agreement in some other way.

There are two types of mortgage foreclosure. The so-called judicial foreclosure involves an attorney filing a lawsuit on behalf of the lender in court to foreclose the home. After the borrower receives it, the court can grant either a default judgment or a summary judgment, depending on the response. 

In a nonjudicial foreclosure, the lender’s attorney mails the borrower a notice of default. After the borrower fails to reinstate or pay off a loan, the attorney records the notice of default in the local land record office. The final step is noticing the borrower of sale. 

Florida is a judicial foreclosure state, meaning that resolving foreclosure mortgage disputes is traditionally reserved for litigation. However, as an alternative dispute resolution method, mediation provides homeowners with the opportunity to avoid foreclosure and keep their homes. 

Stopping Foreclosure With Mediation

Traditional court litigation lacks the most advantages mediation has. When the mortgage foreclosure dispute arises, homeowners are the first to benefit from mediation.

Foreclosure mediation works by bringing the borrower and lender (usually a foreclosing bank) together to resolve a dispute. Mediation offers neutral and confidential dispute resolution. In addition, mediating mortgage foreclosure disputes is a time and cost-effective method of dealing with the matter.

An impartial third party called the mediator meets with the borrower and the lender to discuss the different options of avoiding foreclosure. In a neutral and friendly environment, the parties explore the possibility of modification, short sale, or repayment plan. The mediator facilitates the negotiations to reach an agreement.

In Florida, a court may refer a case to mediation on a case-by-case basis if it believes mediation will be beneficial and cost-efficient to resolve the foreclosure.

However, participating in mediation is not a guarantee for preventing foreclosure, but it increases the chances of a successful resolution.

Successful mediation can bring a variety of positive outcomes, including reinstating the mortgage loan, restructuring the loan, reaching a forbearance agreement or a repayment agreement. Finally, a mediator facilitated negotiations can result in selling the property.

Unlike litigation, mediation is confidential. Mortgage foreclosure disputes stay out of the public record, beneficial both for homeowners and lenders.

In foreclosure mediation, a mediator holds both private sessions (caucuses) with each party separately and joint sessions in the presence of both parties. The goal is to explore financial options and terms on which the homeowner may keep the property.

Call us today

Thomas Chase is a certified Florida mediator with years of training in foreclosure laws. 

By adhering to the highest mediation standards, Mr. Chase is working to resolve your foreclosure dispute confidentially and neutrally.