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.
I'm in Fla doing a short sale with BOA/BAC Home Loans who doesn't take off the language for anyone. BOA does but not BOA/BAC home loans. My loan is owned by Fannie Mae. Who comes after you BOA the servicer or Fannie Mae the owner... anyone please answer if you know.
Hi illucy!
Welcome to forums!
Your lender i.e. Bank of America will come after you in order to recover the balance dues after short sale.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Your lender i.e. Bank of America will come after you in order to recover the balance dues after short sale.
Feel free to ask if you've further queries.
Sussane
Thanks Sussane
I was reading on the Fannie Mae site that sometimes they come after you when they think you did a stratigic default... In my case it's an illness in the family. But still I'm scared. Does BOA get the go ahead from Fannie Mae to go after people. Because if they own the loan wouldn't they call the shots.
I was reading on the Fannie Mae site that sometimes they come after you when they think you did a stratigic default... In my case it's an illness in the family. But still I'm scared. Does BOA get the go ahead from Fannie Mae to go after people. Because if they own the loan wouldn't they call the shots.
Hi illucy,
It will be completely your lender's discretion whether or not he would sue you for the deficient balance. If your property goes for a short sale or a foreclosure, then lenders generally have the rights to come after you for the deficient balance. However, if you're staying in a non-recourse state, then the lender won't come after you for the balance dues.
Take care.
It will be completely your lender's discretion whether or not he would sue you for the deficient balance. If your property goes for a short sale or a foreclosure, then lenders generally have the rights to come after you for the deficient balance. However, if you're staying in a non-recourse state, then the lender won't come after you for the balance dues.
Take care.
My condo was foreclosed last year and I received a 1099C. Today I got a letter from a collection agency (who is at the same address and PO Box as the lender with the same initials) saying I still owe the debt.
Can I politely tell them to get lost?
Can I politely tell them to get lost?
Hi Guest,
You should inform the collection agency that you've received a 1099c and that the deficient balance has been forgiven. You should also contact the lender and request him to withdraw the account from collections.
Thanks
You should inform the collection agency that you've received a 1099c and that the deficient balance has been forgiven. You should also contact the lender and request him to withdraw the account from collections.
Thanks
I have an income condo in Florida that has never cash flowed. It's eating me alive. I have a short sale buyer, but my lender is dragging its feet. How can I get out of this without having them come after me for the difference later? Thanks in advance, R. Cotter
Welcome Ruth,
If the lender goes for a short sale, you would be liable for paying off the deficient balance resulting from the property sale. If you are unable to pay off the balance dues resulting from the sale, then it's better to go for a deed in lieu of foreclosure. The lender will forgive the deficient balance resulting from the sale of the property.
If the lender goes for a short sale, you would be liable for paying off the deficient balance resulting from the property sale. If you are unable to pay off the balance dues resulting from the sale, then it's better to go for a deed in lieu of foreclosure. The lender will forgive the deficient balance resulting from the sale of the property.
Can a lender sue for defiecny judjement in Florida after a short sale?
Hi Fingily,
Lenders do have the rights to sue the borrower for the deficient amount resulting from the short sale of the property. If you are unable to pay off the deficient balance, then the lender can charge off the account and assign it to a collection agency.
Thanks
Lenders do have the rights to sue the borrower for the deficient amount resulting from the short sale of the property. If you are unable to pay off the deficient balance, then the lender can charge off the account and assign it to a collection agency.
Thanks
We divorced and land was awarded to spouse he was to sell, refiance or pay off. He decided to stop making payments on it a year after divorce and allowed it to go into foreclosure. I was never notified by lender but credit was dinged because my name was still on contract. Can they file a deficiency judgment against me
Hi Guest!
Welcome to forums!
If your name is mentioned on the mortgage docs, then the lender will be able to come after you for the deficient balance resulting from the foreclosure sale.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If your name is mentioned on the mortgage docs, then the lender will be able to come after you for the deficient balance resulting from the foreclosure sale.
Feel free to ask if you've further queries.
Sussane
Florida. My husband's name is the only one on the loan for the foreclosed home. A deficiency judgement puts a lien on his other properties. These other properties include my name and my son's names on the loans and deeds in addition to his name. These other loans are not in foreclosure. My husband's income is limited to Social Security Disability. At the time of sale on these other homes, how would a property lien effect each of us?
i purchased a condo in 2005 for $180k and am in the process of a short sale for $50k.
Will there be a deficiency judgement against me? I had to produce a hardship letter stating my current situation about my family situation and debt accumulated as a result of being unemployed for an entire year.
i can't afford any deficiencies and don't want to hold on to the place any more. what are my options?
thanks
Will there be a deficiency judgement against me? I had to produce a hardship letter stating my current situation about my family situation and debt accumulated as a result of being unemployed for an entire year.
i can't afford any deficiencies and don't want to hold on to the place any more. what are my options?
thanks
To guest,
The lien will be satisfied once the property is sold off. The lien will not affect anyone of you except your husband. As the loan was in his name, the lien will be mentioned in his credit report.
To confused homeowner,
In case of a short sale, the lender will be able to come after you for the deficient balance resulting from the short sale. If you cannot pay the deficient balance, then you need to negotiate with the lender about the same. It will be completely his discretion, whether or not he would forgive your balance dues.
The lien will be satisfied once the property is sold off. The lien will not affect anyone of you except your husband. As the loan was in his name, the lien will be mentioned in his credit report.
To confused homeowner,
In case of a short sale, the lender will be able to come after you for the deficient balance resulting from the short sale. If you cannot pay the deficient balance, then you need to negotiate with the lender about the same. It will be completely his discretion, whether or not he would forgive your balance dues.