Loan Process

• To obtain a mortgage loan, applicants must consult with a bank or mortgage lender. A loan officer will interview the applicants, and help them to complete a loan application. The loan application will be reviewed, specifically the areas of credit history and income, and a final decision will be determined. If the applicants are approved for the loan, they must attend the loan closing to sign the loan documents. The promissory note states the amount borrowed, and by signing the borrowers state that they promise to repay the loan. The security instrument proves the evidence of debt in favor of the lender. It also outlines the terms and conditions of the loan. It is filed on record with the land system in the county where the property is located.
  
  

Security Instrument

• Florida operates as a lien theory state. This process uses a mortgage document to create a lien against the property in favor of the lender. The lien remains valid until the loan is paid in full. The mortgage document should include the borrowers' names, the lender's name, the loan amount, the loan origination date and the loan maturity date. Additionally, the mortgage defines important terms used by the lender, including default. A deed of trust additionally includes a trustee, who holds the property title until the loan is repaid.
  
  

Foreclosure

• Florida requires lenders to use the judicial method of foreclosure. This method is often required in lien theory states, or when a mortgage is used as the security instrument. States that use the deed of trust typically do not require judicial foreclosure. If the borrowers enter default, as defined in the mortgage, the lender has the right to accelerate the mortgage balance to be paid in full. If the borrowers cannot pay in full, the lender can foreclose. To begin a foreclosure in Florida, the lender's attorney files a formal complaint against the borrowers with the court. The court can then issue a ruling allowing the lender to sale the property at a foreclosure auction. The proceeds from the auction repay the loan amount.
  
  

Satisfaction

• The average mortgage loan term is 30 years. When the final payment is received by the lender, it must complete the steps necessary to release the lien from the property. Florida generally uses a satisfaction of mortgage document. The satisfaction should reference the information contained in the original mortgage and also the recording information of the original mortgage. This can be a book and page or instrument number depending on how the county's record system is set up. The satisfaction is then filed on record, and the borrowers own the property free and clear.