Mortgage Foreclosures

Service of Process and Mortgage Foreclosures

The Real Estate Crash of 2008

During the great real estate crash of 2008 (a.k.a the housing bubble that burst), Process Servers were extremely busy trying to serve respondents with foreclosure pleadings on residential mortgages.  There was a significant amount of evasion of service by homeowners who thought they could live indefinitely in their homes without meeting the obligations of their mortgage loan agreements.  This evasion caused major headaches for lending institutions and attorneys.  Here, in Florida, the tremendous backlog of foreclosures took 2-3 years typically.  In a normal market, an occassional lengthy foreclosure went unnoticed.  But when foreclosures reached a record breaking level, the normal 2-3 year turn around was anything but unnoticed.   Something had to be done and something eventually was done.  Judges and plaintiffs were, finally, unshackled by the normal onerous rules of civil procedure toward the end of the foreclosure boom.   Foreclosure proceeding times were reduced by 50%. 

The Real Estate Crash of 2021

The country is about to experience another real estate crash similar to 2008.   This time the crash is due to massive unemployment caused by the covid 19 pandemic.  As of the this writing, homeowners are still protected from foreclosures nationwide.  But this will change very soon as lenders are unable to operate with no cash flow.  Unfortunately, many homeowners have lost their jobs permanently as employers are realizing that many employees are not as essential as they thought they were.  In addition, during the past 12 months, divorces are increasing due to spouses stuck in their homes 24/7.  Divorces usually mean that one or both spouses stop paying the mortgage. As a result, there will be a backlog of mortgage foreclosure filings by lenders across the country.  The number of projected foreclosures is a closely guarded secret.  Lenders will not release those numbers fearing that investors will divest their interests.

Service of Process in the aftermath of Covid 19

For Attorneys:

Start making plans to get your pleadings served immediately.   The courts are not processing new foreclosures but they will soon.  And when that happens, all mortgage cases will be filled at once, unlike  the last cycle of foreclosure filings.  You should not expect any quick actions by the courts.  When your case is filed, immediately get your papers served.  Don't waste any time.  The early bird catches the worm as they say.

Many of the process server companies of today, were not around during the previous rush to foreclose back in 2008.  As an attorney facing a significant number of foreclosures, you should spend more than a little time to find the right process server or process server company.  You should not be in a hurry to make the right decision.  Investigate the company and ask the pointed questions even if they are awkward.  Just like lawyers, there are a lot of process servers who shouldn't be a process server.  You should spend a week screening the companies that you will eventually hire. 

1. Avoid companies who hire other companies to do the process server work.  Work directly with the individuals who will be serving the pleadings.
2. Expect to pay process servers in advance.  We will not wait for the time it takes for the bank to get their property back.
3. Ask the process server company for a typed company bio/profile, a resume of sorts.  A sloppy response will be a clear indicator of the kind of work they will do
4. Give the potential process server a questionaire to complete in PDF format.   This way you don't have to argue with the process server on the phone.  Who has time for that.
5. Always ask for the process server's license number.  If it's a company, ask for each process servers license number.  These license numbers can be used to determine their experience levels.  i.e. original date of issuance.
6. Don't ask for bulk discounts.  It's unprofessional and usually a big red flag for any good process server company.  A rule of thumb for process server time to job completion is 3-4 manhours.  So if you think you are paying too much, do the math.

For Homeowners: You know the situation is not good.  You are facing homelessness, divorce, unemployment, depression and a myriad of other things that will complicate your life.  Don't make the mistake of avoiding the unavoidable.  You CANNOT avoid the foreclosure.  The foreclosure is coming and the banks want their money.  It's nothing personal, just business.  Do not waste your time and money fighting a battle you can not win.  You may think that this will go away if you don't answer the door.  It will not go away....for you, or for anyone else.  A simple notification in the newspaper under legal notices section, will act as a substitute for serving the papers to you at your door.  Once that happens, the case moves forward, with or without you.  If you ignore it, the bank will automatically get the house back and the police will appear at your door to escort you off of the banks property.  Whatever is in the house will then belong to the bank.  You will not be allowed back on the property.   If you are caught on the property, you will be arrested for trespassing.  Many homeowners have been removed from their homes and lost all of their possessions, everything.  No exceptions. Legal papers like birth certificates, passports, last wills and testaments, guns, computers, cell phones, hard drives, medications, perishables, paintings, furniture, vehicles, yard art, yard equipment, clothing, pictures, video collections, libraries, even things like gold and silver.   You will lose it all.  Do not take that chance. 

Accept the papers and get out early.  In some cases, banks will pay you to leave just so they can have the house back in good condition. THIS IS YOUR BEST  OPTION.  Homeowners have a bad reputation for trashing the house because the bank wants their money.  It is not the banks fault that you can no longer afford the mortgage payments.  Do the right thing, work with your lender.  Move on with your life.  Don't get bogged down in the negativity of a foreclosure.  Get away from it as soon as possible.  You will be relieved once you leave the home behind you.  Better days are coming even though you might not think so.