Foreclosure

How Foreclosure Works in Florida

1. Default and notice. The borrower misses payments or breaks a loan covenant; the lender sends a notice of default and demand.
2. Lawsuit and lis pendens. The lender files a foreclosure complaint in circuit court (Chapter 702, Florida Statutes) and records a lis pendens, warning buyers and lenders that the property is in litigation.
3. Receiver (commercial). On income property, the lender often asks the court to appoint a receiver to collect rents and protect the asset.
4. Judgment. If the borrower doesn't cure or settle, the court enters a final judgment of foreclosure and sets a sale date.
5. Sale. The clerk holds a public foreclosure auction, usually online. The lender can credit-bid its judgment. The borrower can redeem by paying the judgment until the clerk files the certificate of sale (s. 45.0315).
6. Certificate of title. If no objection is filed, the clerk issues the certificate of title (s. 45.031). If the lender was the winning bidder, the property becomes REO.
7. Deficiency. If the sale doesn't cover the debt, the lender may seek a deficiency judgment; a separate action generally must be brought within one year (s. 95.11(5)(h)).

Timeline and the Cost of Waiting

An uncontested commercial foreclosure in Florida can take several months; a contested one can run a year or more, especially with a borrower bankruptcy. Every month adds unpaid interest, property taxes, insurance, legal and receiver fees, and the risk that the property loses value or tenants. That's why lenders compare foreclosure with faster exits. See Florida judicial foreclosure and Florida commercial foreclosure for the court process in more depth.

Alternatives to Foreclosure

• Loan workout: modify the rate, term or payments and keep the loan performing.
• Discounted payoff: accept less than the balance now, often from a refinance or sale.
• Deed in lieu of foreclosure: the borrower hands over the deed voluntarily, skipping the lawsuit.
• Short sale: the borrower sells for less than the debt, with the lender's approval.
• Note sale: the bank sells the defaulted loan to an investor and lets the buyer finish the process.

Foreclose or Take the Payoff?

A Worked Florida Example

A bank holds a $5 million defaulted loan on an Orlando office building now worth about $3.6 million. The borrower's partner offers a discounted payoff of $3.3 million within 30 days. Foreclosing would take about 14 months: the bank expects to sell the property for about $3.3 million after a 2% annual decline in value and 6% selling costs, while spending about $257,000 on taxes, insurance and upkeep and $175,000 on legal and receiver fees. Discounted at the bank's 8% cost of capital, foreclosure is worth about $2.63 million today. The bank accepts the $3.3 million payoff, about $673,000 better, and books the loss this quarter instead of carrying the asset. Hypothetical figures; not legal advice. For the full decision framework, see The Bank REO Disposition Playbook.

From the Desk

Foreclosure is a decision, not a reflex. Before a bank files, I want three numbers side by side: the payoff on the table today, what foreclosure nets after time and cost, and what a note buyer would pay. The best answer is usually the fastest clean exit.

Run the Numbers

Price the note, test the payoff, and size the recovery.

What is foreclosure?

The legal process a lender uses to take a property, or force its sale, when the borrower defaults on the mortgage, so the lender can recover what it's owed.

Is Florida a judicial foreclosure state?

Yes. Lenders must file a lawsuit and get a court judgment before the property is sold at a clerk's sale (Chapter 702, Florida Statutes).

How long does a commercial foreclosure take in Florida?

It varies widely. An uncontested case can take several months; a contested case or a borrower bankruptcy can push it past a year.

Can a borrower stop a foreclosure in Florida?

Yes, by curing the default, negotiating a workout or payoff, or redeeming the property by paying the judgment before the clerk files the certificate of sale (s. 45.0315).

What happens to a property after foreclosure?

It goes to the winning bidder at the clerk's sale. If no one outbids the lender's credit bid, the lender takes title and the property becomes bank-owned real estate (REO).

Article Summary

Foreclosure is how a lender takes or sells a property after a default. In Florida it runs through the courts, which makes timing and cost central to every decision a bank makes about a bad loan.

Key Takeaways

• ✓Florida foreclosure is judicial: a lawsuit and court judgment come first.
• ✓The borrower can redeem until the clerk files the certificate of sale.
• ✓Every month of delay adds interest, taxes, insurance and legal costs.
• ✓Workouts, payoffs, deeds in lieu and note sales are often faster exits.
• ✓If the lender wins the sale, the property becomes REO.

About Michael R. Linton

Michael R. Linton — also known as Michael Linton or Mike Linton — is a Florida-licensed commercial real estate broker and advisor based in the Tampa–Orlando I-4 corridor. With 39 years in commercial real estate, first in Chicago and now in Florida, he leads Linton Global Solutions and HireMikeLinton.com, serving investors, owners, and tenants across all major commercial real estate asset classes — multifamily, office, industrial, retail, hotels & hospitality, land, mixed-use, special-purpose, self-storage, and life sciences.

Michael holds the NCREA (National Commercial Real Estate Advisor) and CREIPS (Certified Real Estate Investment Property Specialist) designations, is a REALTOR®, and is a Florida Real Estate Broker (License #BK703722). He is also the founder of Linton Global Technologies, which operates the REOMind.ai AI-powered REO disposition platform serving a network of banks.

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Works Cited

1. The Florida Legislature. "Chapter 702, Florida Statutes: Foreclosure of Mortgages." Online Sunshine, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0700-0799/0702/0702.html. Accessed Oct 12, 2026.
2. The Florida Legislature. "Section 45.031, Florida Statutes: Judicial Sales Procedure." Online Sunshine, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0045/Sections/0045.031.html. Accessed Oct 12, 2026.
3. The Florida Legislature. "Section 45.0315, Florida Statutes: Right of Redemption." Online Sunshine, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0045/Sections/0045.0315.html. Accessed Oct 12, 2026.
4. The Florida Legislature. "Section 95.11, Florida Statutes: Limitations Other Than for the Recovery of Real Property." Online Sunshine, http://www.leg.state.fl.us/statutes/index.cfm?App_mode=Display_Statute&URL=0000-0099/0095/Sections/0095.11.html. Accessed Oct 12, 2026.
5. Florida Department of Business and Professional Regulation. "License Verification: Michael R. Linton, Florida Broker BK703722." MyFloridaLicense.com, https://www.myfloridalicense.com/wl11.asp. Accessed Oct 12, 2026.

Disclosure & Compliance

Disclosure: This article discusses proprietary technology developed by Linton Global Technologies. Michael R. Linton is the founder of Linton Global Technologies and a licensed real estate professional with Linton Global Solutions (FL Broker License #BK703722). This content is for informational purposes only and does not constitute investment, legal, or financial advice.

Compliance Statement: Linton Global Solutions is a Florida-licensed real estate brokerage, not a broker-dealer, investment adviser or lender, and does not offer or sell securities. CREDDS and REOMind.ai provide decision support only. Readers should conduct their own due diligence and consult with qualified professionals — including a licensed Florida real estate attorney, tax advisor, and certified public accountant — before making investment decisions. Past performance does not guarantee future results.