Default and Demand

• When a borrower falls behind with payments, the precise course of events depends on the mortgage agreement and the policies of the lender. The mortgage agreement will determine the legal point at which the borrower is considered in default: this could be the moment a single payment is late, or it could be a different policy, such as having missed two payments. The lender will normally then issue a demand letter giving the borrower a set period in which to make up the payments, but this isn't required by law.
  
  

Lis Pendens

• Once a borrower has fallen into default, the first formal stage of the foreclosure process is for the lender to file a Lis Pendens. This is a lawsuit that contains evidence of the borrower being in default. The court will then issue notice of the lawsuit to the borrower, and give a set period to reply. This is most commonly 20 days.
  
  

Foreclosure

• Once the time period expires without the borrower answering the Lis Pendens, or once a court has dismissed the borrower's answer, foreclosure begins. Under Florida law, foreclosure is a process rather than a single event. It begins with the lender formally beginning foreclosure, which means ending the loan agreement and exercising the right to take ownership of the property. At this stage, the borrower does not have to inform the lender that foreclosure has begun.
  
  

Sale Process

• The court will set a sale date, usually for between 20 and 35 days after the foreclosure process begins. The county clerk will advertise the sale in a public forum like a newspaper once a week during this period, with the last advertisement five days before the sale date. On the sale date the property is auctioned, and a certificate of sale issued to the winner. The winner must pay an immediate 5 percent deposit and the remaining 95 percent by the end of the day. The winner then takes legal ownership of the property within 10 days.
  
  

Redemption

• Florida law allows the right of redemption up until the point when the certificate of sale is issued to the auction winner. Redemption means that the borrower repays the full outstanding loan amount plus costs, and will then take full legal ownership of the property, as the loan ends with the foreclosure process. This is rarely exercised by individuals, as a struggling homeowner is highly unlikely to have the relevant cash available. In the case of a large business, there is more of a possibility this could happen, especially if the default was an oversight rather than a fundamental financial problem.