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 did not have the add'l funds to do this. My job disipated and I cannot give the condo away to help my cause, so the property is now in foreclosure. The city demolished the house for non-compliance issues. I have a prospective buyer for the vacant land. I have unused funds ermarked for the remodeling that should go back against the original loan plus recently I rec'd funds from my mother's estate. The aforementioned funds will pay off about 55% of my refinance loan. The deficiency on the remodel house loans (they split it in 2 for rate) will be approx 200K. What can I expect to happen?
Whether I go with a short sale, Deed-in-lieu (which I am not sure it qualifies cuz it's not primary residence), or foreclosure there will be a deficiency. Is there anyway to avoid that and if not, do I stand to lose my other holdings. I am 62 and job prospects are slim. The sale of the condo, if it ever happens would bring me close to paying off the primary residence mortgage. That still leaves the question of the deficiency.
Hi Dutch!
Welcome to forums!
If the land was not attached to the mortgage, then you sell it off yourself. You already have a buyer for your property. In such a situation, you can negotiate with the buyer and sell it off.
As the said property is not your primary residence, you won't be able to avoid the deficient balance resulting from the property sale.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If the land was not attached to the mortgage, then you sell it off yourself. You already have a buyer for your property. In such a situation, you can negotiate with the buyer and sell it off.
As the said property is not your primary residence, you won't be able to avoid the deficient balance resulting from the property sale.
Feel free to ask if you've further queries.
Sussane
we are trying to negotiate a deed in lieu on an investment property. the lender said they would accept the deed in lieu but retain the right that they MAY seek a deficency judgement after they sell the property in the future. Why would this be advantageous to us to do this now with an unknown in the future vs...just foreclosing on it now.
Hi Guest!
Welcome to forums!
If you can afford to pay off the deficient balance resulting from the sale of the property, then can go for this option.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
If you can afford to pay off the deficient balance resulting from the sale of the property, then can go for this option.
Feel free to ask if you've further queries.
Sussane
I am looking for advice about how to defend or negotiate against a mortgage deficiency judgment. I'd be interested in hearing from any people in the same the boat to share knowledge and strategy. I am also looking for a lawyer with real experience in this area, so referrals are welcome.
A brief background: I invested in a Florida property that was foreclosed upon by my lender after my failed attempts at mortgage modification and short sale. The property was sold at auction. A deficiency motion was *not* filed by the lender, but rather it appears that the lender has sold the debt to an out-of-state national debt collection agency that is now trying to collect.
Does any who has been through this know how flexible these companies are with discounting the amount owed? Can my bank/lenders past unreasonable/bad actions be used to defend against the debt collector?
Thank you.
A brief background: I invested in a Florida property that was foreclosed upon by my lender after my failed attempts at mortgage modification and short sale. The property was sold at auction. A deficiency motion was *not* filed by the lender, but rather it appears that the lender has sold the debt to an out-of-state national debt collection agency that is now trying to collect.
Does any who has been through this know how flexible these companies are with discounting the amount owed? Can my bank/lenders past unreasonable/bad actions be used to defend against the debt collector?
Thank you.
what if i sign and register a quit claim deed in favor of the bank, is this legal. :cry:
You can transfer the property to the bank by signing a quitclaim deed. However, the bank should also accept the deed in order to make the transfer legal.
Hi Jess. Back in 2007 in Florida i had a judgment placed against me. Since then I have been working and now i have been layed off.
has the limitations passed that they can garnish my savings account? I'm really going to need to money to survive while looking for my job and finish school. I want to pay them off, but i just cant now. Thanks!
has the limitations passed that they can garnish my savings account? I'm really going to need to money to survive while looking for my job and finish school. I want to pay them off, but i just cant now. Thanks!
Hi Praz,
As far as I know, the SOL on judgment in Florida is 20 years. As the limitations are not over, the creditor will be able to file a lawsuit and get a judgment to garnish your wages or savings account.
Take care.
As far as I know, the SOL on judgment in Florida is 20 years. As the limitations are not over, the creditor will be able to file a lawsuit and get a judgment to garnish your wages or savings account.
Take care.
I've been reading the answers to all of your mortgage deficiency questions, and can't figure out why the answers differ so much. How long does a lender have to file a deficiency in the state of Florida? Is it one, three or five years? The SOL may be 20 years, but isn't that to collect the judgement?
Also, in 2006, BOA loaned my husband (the note and all bank docs are in his name alone) money to purchase property in the state of FL. He died in 2007. My name is on the mortage deed but I am not a signer on the note from the bank. I paid on the mortgage for one year and couldn't pay any more. I live in IL and have property in WI. BOA foreclosed on the FL property and I am now waiting to see if they will pursue a defiiciency against me for the shortfall. Can they do this if I am not on the note? Also, can the y place liens on my home in IL or my property in WI? Will they need to file in IL before they can place any liens or garnish bank account and wages? How long does this usually take? The original paperwork states that they "reserve the right to retain jurisdiction to file a deficiency judgement" can you explain this? Don't they need to file for this, and don't I have 30 days to reply and be given a chance to fight it? Remember, I never was placed on the note, only the mortgage deed. And do they have the right to put this against my credit?
Also, in 2006, BOA loaned my husband (the note and all bank docs are in his name alone) money to purchase property in the state of FL. He died in 2007. My name is on the mortage deed but I am not a signer on the note from the bank. I paid on the mortgage for one year and couldn't pay any more. I live in IL and have property in WI. BOA foreclosed on the FL property and I am now waiting to see if they will pursue a defiiciency against me for the shortfall. Can they do this if I am not on the note? Also, can the y place liens on my home in IL or my property in WI? Will they need to file in IL before they can place any liens or garnish bank account and wages? How long does this usually take? The original paperwork states that they "reserve the right to retain jurisdiction to file a deficiency judgement" can you explain this? Don't they need to file for this, and don't I have 30 days to reply and be given a chance to fight it? Remember, I never was placed on the note, only the mortgage deed. And do they have the right to put this against my credit?
can a deficieincy amount on a Fl property, be placed on a Ga property
via judgement etc. Thanks
via judgement etc. Thanks
Hi!
Welcome to forums!
To Lin,
As far as I know, the SOL to collect judgment in Florida is 20 years. If your name is not mentioned on the mortgage docs, then the lender cannot come after you in order to collect the dues. If your name is not on the mortgage, then the lender cannot garnish your bank account or salary.
To frog man,
If the lender wants to place a lien on the property in Georgia, then he will have a file a lawsuit in that state and get a judgment.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
To Lin,
As far as I know, the SOL to collect judgment in Florida is 20 years. If your name is not mentioned on the mortgage docs, then the lender cannot come after you in order to collect the dues. If your name is not on the mortgage, then the lender cannot garnish your bank account or salary.
To frog man,
If the lender wants to place a lien on the property in Georgia, then he will have a file a lawsuit in that state and get a judgment.
Feel free to ask if you've further queries.
Sussane
Hi, I had a financed a home in Florida, which had a 2 yr ARM, but the Lender filed bankruptcy after 6 months and a new company took over my mortgage. The new company wouldn't refinance because they said they weren't lenders and couldn't refinance it, as I would've normally been able to refinance after 2 years, according to my mortgage broker. My problem is the new company picked up my mortgage from the bankrupt company, which I think was CountryWide. After that time, our payments went to $3700 a month and I walked away in 2007. They were unable to contact me and my house went into foreclosure. I know the house was sold in 2009. But now I am about to get some inheritance money from family and I'm afraid that if I put it in my Florida bank account, it might get swept. It's the only account I have, which I still use. How can I find out if there is a deficiency judgement against me? Will it throw a red flag if I put a 20 k check into the account? Will it freeze immediately or will I have time to get it out? Please help. Thank you .
Our home is not currently in foreclosure and all payments have been made thus far. My question is this, we are going to separate our relationship. Neither one of us can take on the mortgage individually, and the home has now lost 25k in the last 2 years. Can we sell the home for its current value, and have this remaining 25k written off by the lender. If so how do we proceed? Our goal would be to just pay the lender what we could sell it for and be relieved of any further obligations to this property. We live in the state of Florida.