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.
Hi mj!
Welcome to forums!
You can sell off the property. However, whether or not the deficient balance will be written off will be the sole discretion of the lender. If the lender forgives the dues, then you won't have to pay off the dues.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You can sell off the property. However, whether or not the deficient balance will be written off will be the sole discretion of the lender. If the lender forgives the dues, then you won't have to pay off the dues.
Feel free to ask if you've further queries.
Sussane
I am retired from the military, and just recently received forclosure notice on my home in Florida.
I have a few questions: After they foreclose (on a short sale),
#1: Can the bank (Citi) have my military pension garnished (it is sent directly to my Florida Bank account)?
#2: Can they garnish any savings from a bank account in another state?
#3: My loan was backed by the FHA. Will the FHA insure the loan and how does this help me out?
#4: I am also a disabled vet and get 30% from the Veterans Administration. Can this be garnished also or is it safe?
Thanks for the help. I love your site and it is very helpful.
I have a few questions: After they foreclose (on a short sale),
#1: Can the bank (Citi) have my military pension garnished (it is sent directly to my Florida Bank account)?
#2: Can they garnish any savings from a bank account in another state?
#3: My loan was backed by the FHA. Will the FHA insure the loan and how does this help me out?
#4: I am also a disabled vet and get 30% from the Veterans Administration. Can this be garnished also or is it safe?
Thanks for the help. I love your site and it is very helpful.
Hi Poindexter,
Your pension or retirement funds cannot be garnished by the lender. However, the lender will be able to garnish the savings account or the checking account where the money is being deposited. They can garnish accounts in other states but they will have to get a judgment from the court of that state.
The FHA mortgage insurance premium will help the lender to recover most of his dues. Your disability income will not be garnished by the lender.
Thanks
Your pension or retirement funds cannot be garnished by the lender. However, the lender will be able to garnish the savings account or the checking account where the money is being deposited. They can garnish accounts in other states but they will have to get a judgment from the court of that state.
The FHA mortgage insurance premium will help the lender to recover most of his dues. Your disability income will not be garnished by the lender.
Thanks
Well then if they can garnish my savings or checking accounts, then they will end up getting my retirement pay after all. Because military retirement pay is sent electronically once a month in a checking or savings account, how could I get around them not getting to it? There must be a way. Thank you.
Hi Poindexter!
Welcome to forums!
Rather than getting your retirement pay directly deposited in your savings account, you can ask for a check. This might help you avoid the garnishment of retirement pay.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
Rather than getting your retirement pay directly deposited in your savings account, you can ask for a check. This might help you avoid the garnishment of retirement pay.
Feel free to ask if you've further queries.
Sussane
Hello, I'm on the title of the home, but not on the loan. My wife is the only name on the loan. We are facing a forclosure. Can the bank pursue a deficiency judgement on me? Or only to my wife? Please I need some info. Thank you. Maxwell
Hi Maxwell,
If your name is not on the mortgage docs, then the lender will not be able to come after you for the deficient balance. The lender will go after your wife to recover his dues.
Thanks,
Jerry
If your name is not on the mortgage docs, then the lender will not be able to come after you for the deficient balance. The lender will go after your wife to recover his dues.
Thanks,
Jerry
Can a primary lien holder come after the new homeowner if the property was won in an auction?
Hi Vallie!
Welcome to forums!
The primary lien holder won't be able to come after the new homeowner. The old homeowner had taken out the mortgage. Thus, the old homeowner will be liable for paying any deficient balance resulting from the property sale.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
The primary lien holder won't be able to come after the new homeowner. The old homeowner had taken out the mortgage. Thus, the old homeowner will be liable for paying any deficient balance resulting from the property sale.
Feel free to ask if you've further queries.
Sussane
I purchased a house, now rented, and way under value. Rental income was 1,600 now 900. I am retired and have SS and a small pension. My wife's name is not on note or deed. Most of what we own is in boh our names and she has several items, bank account and a stock trading account in her name. If my property goes into foreclosure, can the assests in her name be used to pay any of the deficiency judgement. Can a lien be placed against my half of our primary residence?
Jessica,
One of my employees is going through the foreclosure process right now. I have a joint account with him for business purposes, will his foreclosure affect my credit in a negative way? Should I close this account? What would be your advice?
One of my employees is going through the foreclosure process right now. I have a joint account with him for business purposes, will his foreclosure affect my credit in a negative way? Should I close this account? What would be your advice?
Hi opboma,
If the mortgage of the property is only in your name, then the lender will come after your property in order to recover the deficient balance resulting from the property sale. He will not come after your wife's property.
To Denise,
The foreclosure will not affect your credit in a negative way if your name is not on the mortgage docs. If your name is not on the mortgage docs, then you don't have to close any account.
If the mortgage of the property is only in your name, then the lender will come after your property in order to recover the deficient balance resulting from the property sale. He will not come after your wife's property.
To Denise,
The foreclosure will not affect your credit in a negative way if your name is not on the mortgage docs. If your name is not on the mortgage docs, then you don't have to close any account.
I did a DIL with BOA only after they stated they would NOT go after a GD. Then they wanted a 10% ( of the value of the loan) "contribution", or they would seek a GD. I paid to settle the PMI 5% "contribution". I am waiting to see how they will settle with the linder.
I don't think many would be sad to see BOA go out of business. I, my kids , grandkids , great grandkids will never do business with them again.
Todd
I don't think many would be sad to see BOA go out of business. I, my kids , grandkids , great grandkids will never do business with them again.
Todd
hi kr!
welcome to forums!
you will have to check out whether or not you have equity in your property. if you've equity in your property, then you should contact your lender and apply for a refinance. as the rates are going quite low, it will help you in getting low interest rates to pay off your loan. however, if you don't have equity in your property, then you won't be able to refinance. in that case, you can go for a deed in lieu of foreclosure to get rid of the property. however, this will have a negative affect on your credit scores and lower it by 250 points.
feel free to ask if you've further queries.
sussane
welcome to forums!
you will have to check out whether or not you have equity in your property. if you've equity in your property, then you should contact your lender and apply for a refinance. as the rates are going quite low, it will help you in getting low interest rates to pay off your loan. however, if you don't have equity in your property, then you won't be able to refinance. in that case, you can go for a deed in lieu of foreclosure to get rid of the property. however, this will have a negative affect on your credit scores and lower it by 250 points.
feel free to ask if you've further queries.
sussane