Posted on: 08th Aug, 2007 01:58pm
If your property is sold in a Florida judicial foreclosure and the sale price is less than the actual amount owed, you will be responsible for paying the deficiency. The lender can either forgive this deficient amount or come after you to recover it.
Can lenders get deficiency judgment Florida?
The lender can obtain a judgment against you to recover the deficiency. He has to file a separate motion/lawsuit for a deficiency once the foreclosure sale is complete. The court then holds a hearing to decide if a deficiency judgment can be allowed against you. At the hearing, the lender has to prove that the property value is indeed less than what you owe.
As a borrower, you have the right to oppose your lender's claim for judgment. You will have to prove that the property is worth more than the outstanding mortgage balance at the time of foreclosure. You can use an appraisal or the tax assessed value of the property to support your claim.
As a borrower, you have the right to oppose your lender's claim for judgment. You will have to prove that the property is worth more than the outstanding mortgage balance at the time of foreclosure. You can use an appraisal or the tax assessed value of the property to support your claim.
What happens after lenders get judgment?
Deficiency judgment Florida allows lenders to come after your wages, levy your bank accounts and put liens on your other properties. However, there are certain assets which are exempt from judgments. They include IRA, 401k, other retirement accounts, social security income, unemployment benefits, workers compensation, etc. Your lender has the right to collect on that judgment for 20 years. The interest will accrue every year till it is paid in full. Apart from this, the judgment will show up on your credit report for 7 years and will affect your credit scores adversely.
Are your wages exempt from garnishment?
If you are the head of the family and your net wages are less than $500 per week, you can protect your wages from garnishment. But if you've signed any document allowing the wage garnishment, the lender can come after your wages. In case you are not the head of the family, you can still protect certain part of your wages. Federal law limits the amount of money that can be garnished by your lender. He can take only 25% of your net wages or the amount in excess of 30 times the federal minimum wage per week, whichever is less.
Are homestead properties exempt from deficiency judgment Florida?
Homestead properties are not protected from judgments for mortgage liens. You can protect your home from creditors of unsecured debts under homestead protection. But lenders, who have financed purchase, repair, improvement, etc. of your home, hold a lien on your property. If you default on such secured loans, your home is not protected from judgments.
Does PMI help you cover the deficiency?
Private Mortgage Insurance (PMI) cannot protect you from deficiency judgments. It is meant to protect a lender against the losses from a mortgage default. A PMI is required if you make a down payment of less than 20% on your loan.
Is there a way to avoid deficiency judgments?
If you can stop foreclosure, you can avoid the judgment. In case you're having difficulty in making mortgage payments and a foreclosure is imminent, you can look for various loss mitigation options like loan modification, deed in lieu (DIL), etc. A loan modification can reduce your mortgage payments and help you save the home.
A deed in lieu does not help you retain the home. But it waives off the lender's right to collect the deficiency. This helps you avoid a judgment. However, you should not believe in verbal agreements. If the deficiency is forgiven, ask your lender to give it in writing before you proceed with the deed in lieu.
A deed in lieu does not help you retain the home. But it waives off the lender's right to collect the deficiency. This helps you avoid a judgment. However, you should not believe in verbal agreements. If the deficiency is forgiven, ask your lender to give it in writing before you proceed with the deed in lieu.
Hi I'm currently going through a foreclosure on two properties and would like to know how much time do the banks take to file a deficiency if they decide to do this? How will I know the sale price of the property at the court?
Any help would be greatly appreciated.
Any help would be greatly appreciated.
Mom passed away one year ago. She purchased a home in florida put down $100,000 and mortgaged $319,000. the current value of the house is about $300,000. Im considering going into a foreclosure which my take up to 3 years. In the mean time I want to rent the home for around $14,000 anually and bank the money. Question: can I protect in any way the cash assets in estate. The mortgage company has filed a claim on the cash assets preventing me from closing the estate untill the house issue is resolved.
Hi Guest!
Welcome to forums!
The lender has the rights to recover his mortgage dues. If there is a deficient balance resulting from the sale of the property, then the lender can go after your mother's other assets. I would suggest you to contact a real estate attorney and check out if you can take any steps in order to protect your mother's other properties.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The lender has the rights to recover his mortgage dues. If there is a deficient balance resulting from the sale of the property, then the lender can go after your mother's other assets. I would suggest you to contact a real estate attorney and check out if you can take any steps in order to protect your mother's other properties.
Feel free to ask if you've further queries.
Sussane
We own a home that is upside down 150K after I retire this year we can not make any more payments on our home, becuse of this we we bought a small condo in a 55+ community in FM with very little payments per month, afordable with our incomes. What can we do with our actual home, we have it for sale but no interest? What is the best solution our credit is excellent and we have not miss a payment which would be imposible to pay after my retirement. What can the bank take from us? Deed in lieu of foreclosureL
Hi deprizzy!
Welcome to forums!
You can apply for a deed in lieu of foreclosure in order to sell off the property. It is the lender's discretion whether or not he would accept your request. If your request is accepted, then the lender will sell off the property and you won't be liable for the deficient balance resulting from the sale of the property. As the deficient amount will be forgiven, the lender will not come after your other assets to recover the same.
Sussane
Welcome to forums!
You can apply for a deed in lieu of foreclosure in order to sell off the property. It is the lender's discretion whether or not he would accept your request. If your request is accepted, then the lender will sell off the property and you won't be liable for the deficient balance resulting from the sale of the property. As the deficient amount will be forgiven, the lender will not come after your other assets to recover the same.
Sussane
If I file bankruptcy and go through a foreclosure can the lender still acquire and implement a Deficiency Judgement against me?
[Link deactivated as per forum rules. Thanks.]
[Link deactivated as per forum rules. Thanks.]
Jessica I have a couple of questions. I walked away from my house even though I could afford the mortgage. My house when sold will not cover the amount of the mortage. I anticipate a deficiency of $400,000.00. I make a good six figure salary. They currently do not know where I live or work. Would they normally try and research that information in an attempt to determine if they would proeceed with a deficiency judgement? I also own a piece of property worth $120,000.00 which I want to sell to a friend of mine. Does my friend need to be concerned that the mortgage company my try to go after that property because they may think I'm trying essentially to hide it through the sale to a friend. Thanks.
Hi Issac,
If you surrender your property in a bankruptcy filing, then the lender can foreclose the property but he won't be able to come after you for the deficient balance resulting from the sale.
Hi bannisterki,
As you've walked away from your property, the lender has foreclosed it. After a foreclosure, the lender will be able to come after you for the deficient balance resulting from the sale of the property. If you are unable to pay that balance amount to the lender, he will be able to come after your other properties. If you sell off or transfer your property just before the foreclosure, then it may be considered as fraudulent by the lender and you can be penalized for the same.
If you surrender your property in a bankruptcy filing, then the lender can foreclose the property but he won't be able to come after you for the deficient balance resulting from the sale.
Hi bannisterki,
As you've walked away from your property, the lender has foreclosed it. After a foreclosure, the lender will be able to come after you for the deficient balance resulting from the sale of the property. If you are unable to pay that balance amount to the lender, he will be able to come after your other properties. If you sell off or transfer your property just before the foreclosure, then it may be considered as fraudulent by the lender and you can be penalized for the same.
Hi bannisterkid,
It is true that the lender may not be able to find where you're residing but he may call at your workplace and want to talk to you. Moreover, he won't have any problem filing a deficiency judgment in your name, provided your state laws allow it. I'm saying this because there are anti-deficiency laws which do not allow the judgment to be issued against purchase mortgages.
What I'd like to suggest is, if you're earning a good amount of dollars, why don't you simply negotiate a payment plan with the lender and pay off your outstanding balance. That's because even if the lender may not pursue a deficiency judgment, there are chances that he could charge off the mortgage and that could have a negative impact on your credit score.
Regarding your concern as to whether the mortgage company can go after the other property, well, your friend doesn't need to be concerned for that. Of course if the lender had known about it, he could have placed a lien on it after a judgment. But I guess he doesn't know that you have a 2nd property, so there's nothing to worry about it.
With regards,
Jessica
It is true that the lender may not be able to find where you're residing but he may call at your workplace and want to talk to you. Moreover, he won't have any problem filing a deficiency judgment in your name, provided your state laws allow it. I'm saying this because there are anti-deficiency laws which do not allow the judgment to be issued against purchase mortgages.
What I'd like to suggest is, if you're earning a good amount of dollars, why don't you simply negotiate a payment plan with the lender and pay off your outstanding balance. That's because even if the lender may not pursue a deficiency judgment, there are chances that he could charge off the mortgage and that could have a negative impact on your credit score.
Regarding your concern as to whether the mortgage company can go after the other property, well, your friend doesn't need to be concerned for that. Of course if the lender had known about it, he could have placed a lien on it after a judgment. But I guess he doesn't know that you have a 2nd property, so there's nothing to worry about it.
With regards,
Jessica
I lost my home in Florida to foreclosure in March, 2009. Within the past month, I received a letter from Dyck O'Neal stating that I owe almost $60K because my loan was a Fannie Mae loan and this was the deficiency. I'm not currently working and don't own anything in my name. But could be going back to work within the next month.
Can they garnish my wages? Should I file bankruptcy? If the bank had held on to my previous home or rented it, they would have been able to recoup the total amount of my home.
Any advice would be appreciated.
Can they garnish my wages? Should I file bankruptcy? If the bank had held on to my previous home or rented it, they would have been able to recoup the total amount of my home.
Any advice would be appreciated.
I own a home in FL and have a 1st and 2nd mortgage that both total about $100k more than the home is worth. Will a DIL work in my situation considering a have a 2nd mortgage on the house? If not, and I choose the short sale route, can the 2nd lender enter a deficiency judgment to recoup their losses?
hi bponvacation,
the lender will be able to garnish your wages in order to recover his dues. however, in order to do so, the lender will have to file a lawsuit against you and get a judgment. rather than filing bankruptcy i will suggest you to contact your lender and negotiate with him so that you may get a payment plan to pay off the dues. you may even negotiate for reduction of the debt.
hi skhoaglund,
whether you go for a short sale or a deed in lieu of foreclosure, the second lender will be able to come after you for his dues. if you do not pay the dues, the lender may charge off the loan.
the lender will be able to garnish your wages in order to recover his dues. however, in order to do so, the lender will have to file a lawsuit against you and get a judgment. rather than filing bankruptcy i will suggest you to contact your lender and negotiate with him so that you may get a payment plan to pay off the dues. you may even negotiate for reduction of the debt.
hi skhoaglund,
whether you go for a short sale or a deed in lieu of foreclosure, the second lender will be able to come after you for his dues. if you do not pay the dues, the lender may charge off the loan.
If this is a second home, and i live in california can they proceed on a deficiency judgment?
Hi Guest,
As far as I know, the anti-deficiency laws are effective in case of primary property. If your second home is being foreclosed upon by the lender, then he may come after you for the balance dues.
Thanks
As far as I know, the anti-deficiency laws are effective in case of primary property. If your second home is being foreclosed upon by the lender, then he may come after you for the balance dues.
Thanks
i moved out of my house that i was upside down in, but continued to pay the mortgage. my lender caught wind of this and sent me a letter stating that i was in breach of contract since it was no longer my primary residence. i called and my options were to move back in, refinance, sell it, or they would accelerate the loan (foreclosure). long story short - i told them i would never move back there, couldn't refinance (house is worth 1/2 of what i loaned), and couldn't sell it (house is worth half of what i loaned). they were only willing to give me temporary vacancy for a year, but said i must move back in after that. i told them i couldn't do that, and they were unwilling to budge. i told them they're morons that they would come after my property when i had never missed a payment even though i didn't live there and the house was worth 1/2 as much. i told them to stick it!
i am willing to accept that my perfect credit is going to go down the tubes, but i am hoping to avoid a deficiency judgement. can they stick me for the difference? the whole situation is just wrong in so many ways. i could have walked away, but didn't. i did the right thing and now i could be wrecked financially. help??!!??
i am willing to accept that my perfect credit is going to go down the tubes, but i am hoping to avoid a deficiency judgement. can they stick me for the difference? the whole situation is just wrong in so many ways. i could have walked away, but didn't. i did the right thing and now i could be wrecked financially. help??!!??
Hi jeffrey,
If the lender forecloses the property, then he can come after you for the deficient balance resulting from the sale. If you do not pay it off, then the lender can charge off the loan and assign it to a collection agency who can harass you for the dues. It will be better if you could move back into the property, apply for a deed in lieu of foreclosure and get rid of it. If the lender accepts the deed in lieu of foreclosure, you won't be liable for the balance dues.
Thanks,
Jerry
If the lender forecloses the property, then he can come after you for the deficient balance resulting from the sale. If you do not pay it off, then the lender can charge off the loan and assign it to a collection agency who can harass you for the dues. It will be better if you could move back into the property, apply for a deed in lieu of foreclosure and get rid of it. If the lender accepts the deed in lieu of foreclosure, you won't be liable for the balance dues.
Thanks,
Jerry