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 can sell my house in SC for enough to pay off my 1st mortgage but not the 2nd. The 2nd mortgage co says they do not participate in short sales. What are my choices? If the 2nd mortgage co allowed the short sale can they legally hold me responsilbe for the deficiency on a non secured note after the sale? (I thought laws changed not allowing new loan back after the sale??)
Your query has been replied to in the given page:
http://www.mortgagefit.com/problems/shortage-secondloan.html
Take a look at it. Hope it helps you.
http://www.mortgagefit.com/problems/shortage-secondloan.html
Take a look at it. Hope it helps you.
I received papers today that my lender filed with the court asking for final judgement of foreclosure. Under the list of defendants its lists the Florida unemployment compensation fund. I am not unemployed. What does this mean? If I do ever file for unemployment will they garnish? I am head of household with 2 special needs kids and a mountain of medical bills. Can/will they take my money in my checking account? My pay gets direct deposited. I tried everything to work with my lender but they refused. A short sale did not work because of an existing lien on the property. I offerd DIL several times both on the phone and also by mail but they ignored me
Hi sebnana!
Welcome to forums!
After a foreclosure, if you're unable to pay off the deficient balance resulting from the sale of the property, then the lender can garnish your checking account but he won't be able to come after your unemployment benefits. However, if the monies get deposited in your checking account, then the lender can garnish that. However, in order to garnish your account, they'll have to get a judgment against you from the courthouse.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
After a foreclosure, if you're unable to pay off the deficient balance resulting from the sale of the property, then the lender can garnish your checking account but he won't be able to come after your unemployment benefits. However, if the monies get deposited in your checking account, then the lender can garnish that. However, in order to garnish your account, they'll have to get a judgment against you from the courthouse.
Feel free to ask if you've further queries.
Sussane
I am wondering why then was the unemployment compensation fund named in the suit? I was told that every time they want to garnish your checking account, they have to re-file. each time Is this true. Aslo, I am head of household, can they still garnish head of household? My ex-husband was also named. He never had any claim on the house and we were divorced way before all this happened. Why was he named?
Hi sebnana,
It is true that if the creditor wants to garnish your checking account, then he will have to file a lawsuit at the courthouse and get a judgment against you. If your ex-husband's name is mentioned on the mortgage as a co-borrower, then he would be liable for the mortgage dues and the lender can include his name in the lawsuit.
Thanks
It is true that if the creditor wants to garnish your checking account, then he will have to file a lawsuit at the courthouse and get a judgment against you. If your ex-husband's name is mentioned on the mortgage as a co-borrower, then he would be liable for the mortgage dues and the lender can include his name in the lawsuit.
Thanks
We have pending foreclosure on an investment property which is badly "upside down". Florida retirement,social security, and a second home in Georgia are our only assets other than the usual cars and personal effects. Our primary residence is also underwater. The second home is owned free and clear. What assets are in jeporady with a deficiency judgment? Our primary residence and the investment property are both in Orlando. Thanks for your help.
I just got a deed in lieu approval but they want either 30K upfront which I dont have or 50k with interest over 15 years. I came back with them to counter with 30k over 15 years without interest and for them to put in writing no deficiancy. One west bank said freddy Mac does not remove deficiancys.I told them that I was told from the start that there would be no deficiancys in a deed in lieu. I cannot take the loan if there is a deficiency because they can come after me for 20 years. What do I do. I asked them to show me the original note. What is all this talk about no deficiencys for deed in lieus ...that is bs ...THERE ARE DEFICIANCYS AFTERALL AND IS EVERYBODY A LIAR??? aFTER ALL THIS STRUGGLE TO GET THE DEED IN LIEU I AM TOLD IT IS NOT DISMISSED. IS THIS BECAUSE IT IS AN INVESTMENT PROPERTY? NOT ONE LAWYER TELLS YOU YOU WILLHAVE TO PAY A DEFICIANCY. i NEED HELP
[Email address deleted as per forum rules. Thanks.]
[Email address deleted as per forum rules. Thanks.]
hi tom&carol,
if the investment property is foreclosed by the lender, then you would be liable for paying the balance amount resulting from the sale. if you're unable to pay so, the lender can place a lien on your other properties. however, as your other properties are located in orlando, the lender will have to file a lawsuit against you in orlando in order to place a lien on your property.
hi hoopdeddoo,
in case of a deed in lieu of foreclosure, the lender cannot come after you for the deficient balance. it is forgiven by the lender. however, if you sign an agreement with the lender regarding the payment of balance amount, then you would be liable for paying the balance dues. however, if yours is an investment property, then the lender can ask you for the balance dues resulting from the property sale.
thanks
jerry
if the investment property is foreclosed by the lender, then you would be liable for paying the balance amount resulting from the sale. if you're unable to pay so, the lender can place a lien on your other properties. however, as your other properties are located in orlando, the lender will have to file a lawsuit against you in orlando in order to place a lien on your property.
hi hoopdeddoo,
in case of a deed in lieu of foreclosure, the lender cannot come after you for the deficient balance. it is forgiven by the lender. however, if you sign an agreement with the lender regarding the payment of balance amount, then you would be liable for paying the balance dues. however, if yours is an investment property, then the lender can ask you for the balance dues resulting from the property sale.
thanks
jerry
I am looking at a large deficiency judgement from a Florida condo. I live in California and all of my assets are in California. Can they get to my assets if I am out of State?
Hi Guest,
As the properties are located in California, the Florida based lender will have to file a lawsuit in California in order to go after those assets.
As the properties are located in California, the Florida based lender will have to file a lawsuit in California in order to go after those assets.
Is it wise to maintain a bank account balance while going through a foreclosure?
Hi Burger!
Welcome to forums!
Though you're going through a foreclosure, you can maintain a bank account. The lender won't garnish your bank account if you pay off the balance dues resulting from the sale of the property.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Though you're going through a foreclosure, you can maintain a bank account. The lender won't garnish your bank account if you pay off the balance dues resulting from the sale of the property.
Feel free to ask if you've further queries.
Sussane
Can lender go after both husband & wife assets, if mortgage was only in Wife's Name?
Can lender go after both husband & wife assets, if mortgage was only in Wife's Name?