In any state, mortgage and mechanic's liens on your home can lead to foreclosure. The process of that foreclosure, though, can vary from state to state. Florida, for example, has one of the nation’s longest foreclosure processes. Mortgage lenders and contractors who place mechanic's liens on your property will be required to follow this process.
Florida Mortgage Foreclosure Basics
Florida is a mortgage state, meaning that as the owner of a property, you hold the title. During a foreclosure, property owners in mortgage states are required to go to court to settle the issue with their lender. This court involvement lengthens the foreclosure time period, and in Florida it can make the process take five to seven months (or even longer). In some states, there is a redemption period that allows foreclosed property owners to take back the title of their home if they can pay all outstanding debts. In Florida, however, there is no such redemption period.
Florida Mortgage Foreclosure Process
In order to foreclose on your home in Florida, your mortgage lender first has to sue you in court and receive an order of foreclosure. The process begins when the lender issues a notice of default. Once you receive the notice of default, you’ll have a short time period in which to respond. If you do nothing, the foreclosure will progress and, if awarded a foreclosure, the creditor then has the right to sell your property to settle the lien. Mortgage liens have a lower priority than property tax liens, however, so the mortgage will only be settled after unpaid property taxes have been satisfied.
In order to foreclose on your property, a creditor must have previously filed a lien on your home. A lien is a right of ownership. Your mortgage lender, when establishing your mortgage, placed a lien on the home to secure the debt. Contractors and other construction workers also are able to place liens on your home for unpaid construction bills. These are mechanic's liens. Mechanic's liens have a lower priority than mortgage liens, so the proceeds from the sale of a foreclosed property will pay the mortgage debt before the construction bills.
Florida’s Mechanic's Liens Requirements
According to Florida law, contractors have the right to enforce payment for unpaid services, labor and materials by establishing a property lien on your home. These “lienors” could be contractors, subcontractors, sub-subcontractors, laborers or material suppliers. In many states, there are certain limits on an owner’s liability for mechanic's liens, but in Florida, the law actually expands the owner’s liability to protect the lienor. That said, a construction worker filing a lien on your home first must have issued you a preliminary notice at the start of the job. Additionally, the mechanic's lien must be filed within 90 days of completing the work.
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