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South Florida real estate litigation continues

Developers in South Florida are trying to survive the bleak real estate market which has continued since the recession. A majority of the struggles are the result of condominium and hotel deals gone wrong. Lenders are becoming more aggressive instead of waiting to enforce further legal action against borrowers. A continuation of mortgage financing resulting in default is apparent as the legal battles show no sign of subsiding.

The blame continues to be placed on unseen poor economic conditions. Lenders are hearing constant arguments from borrowers in default who state there is little they could do to avoid default. However, the reality is a borrower always takes a chance when obtaining a mortgage regardless of the current and future strength of the economy. There are some defaulted borrowers trying to reverse their defaults by filing lawsuits against lenders by using poor loan servicing as a reason.

Lenders in Florida, must follow proper procedures during all foreclosure actions against a condominium or hotel developer. This includes giving the borrower 30 days to pay the amount in default. If the mortgage payments in default are not paid, the lender may initiate judicial foreclosure proceedings. This action may include publishing details of the debt to the media. Lenders must file the appropriate court paperwork within specific timelines.

Borrowers have the right to contest a foreclosure. If a lender does not follow the proper foreclosure proceedings, a borrower may be able to stop the foreclosure proceedings or they may be able to get the entire lawsuit dismissed. A real estate attorney can provide advice and counsel to developer clients in this regard.

Source: Commercial Observer, "Foreclosure: South Florida’s Boom and Bust Left a Legal Storm in its Wake", Damian Ghigliotty, September 08, 2014

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