Deed in Lieu of Foreclosure Florida

Guide to Deed in Lieu of Foreclosure: Florida

What is a Deed in Lieu of Foreclosure?

A deed in lieu of foreclosure is an option to pay back collateral without, but not always, having to officially declare bankruptcy. There are many different laws surrounding the process of deed in lieu of foreclosure. Florida has many laws concerning the topic as well, and the statutes surrounding the process are under Section 718.116 of Florida law—titled Assessments; liability; lien and priority; interest; collection. If you are buying a house under a deed in lieu of foreclosure, Florida has various laws that may affect the new owner of the home.

General Laws surrounding Deed in Lieu of Foreclosure

There are some laws that carry over from state to state concerning a deed in lieu of foreclosure. Florida has some specific laws, but those will be explained farther below.

1) If a mortgagor has been approved to under a deed in lieu (DIL) of foreclosure, they have 90 days to complete the action from the beginning of the process.

2) Under the U.S. Department of Housing and Urban Development, $2,000 may be awarded to the mortgagor for junior liens and to be paid to the mortgagor when vacating the property.

3) In some cases, a mortgagee may decide to revert from the foreclosure process to the DIL process, but this decision is based on the mortgagee’s Quality Control Plan.

Apart from the standard laws listed above, there are also some specific laws concerning deed in lieu of foreclosure in Florida. You may decide to do some research for more information, but it’s often important to hire an attorney to help you with the final decision. The DIL process and bankruptcy process both have their ups and downs, and a lawyer can help you decide what option is best for you.

Specific laws for deed in lieu of foreclosure in Florida

As stated above, there are some laws that are specific to Florida. Most of the laws for deed in lieu of foreclosure in Florida concern liability issues for former owners and successors. The laws are listed below:

1) A unit owner, by purchase at a foreclosure sale or by deed in lieu of foreclosure in Florida, is liable for all assessments due while he or she is owner. Also, the new unit owner is jointly and severally liable with the previous owner for unpaid assessments that occurred during the time of transfer.

2) The liable assessments listed above are limited, however. The new owner is liable for assessments that accrued during the first 6 months preceding the transfer of title, or one percent of the original mortgage debt unless the association that filed the complaint was dissolved or did not maintain an office for service.

3) The person acquiring the title shall pay the amount owed within 30 days to the association.

The above laws are unique to Florida and other states as well, and the above laws are not a complete list either. In order to view a detailed and complete list, view Section 718.116 of Florida statutes.