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 Guest,
It is not mandatory for you to take the help of an attorney in order to apply for a deed in lieu of foreclosure. You can yourself negotiate with your lender for a deed in lieu of foreclosure. In this option, the lender will normally forgive your deficient balance resulting from property sale.
It is not mandatory for you to take the help of an attorney in order to apply for a deed in lieu of foreclosure. You can yourself negotiate with your lender for a deed in lieu of foreclosure. In this option, the lender will normally forgive your deficient balance resulting from property sale.
I have a lot loan that is down to 15% value vs principal. My lender has approved a DIL which requires a cash payment and offered a deficiency waiver by signing a promissory note for another chunk of cash which they are willing to finance 0% for 180 months. The two amounts combined are FAR less than the remaining principal. I'm thinking take the deal, cut my losses, and negate the exposure for a deficiency judgement. Do you have any suggestions/recommendations? Thank you!
hi guest!
welcome to forums!
if you can afford to pay cash payments as asked by the lender, then you can go for the deed in lieu of foreclosure option. however, you can try and negotiate with the lender and check out if he can reduce the cash amount to some extent.
feel free to ask if you've further queries.
sussane
welcome to forums!
if you can afford to pay cash payments as asked by the lender, then you can go for the deed in lieu of foreclosure option. however, you can try and negotiate with the lender and check out if he can reduce the cash amount to some extent.
feel free to ask if you've further queries.
sussane
Fioreclosure including mortage note and mortage granted to Bank of America on 11/16/09.B of A assigns bid to Fannie Mae[12/30/09].Certificate of Sale to FM for $0[1/20/10].Deed Transfer to FM[2/9/10].Special Warranty Deed[$10]plus considerations[$245K] to new owner/occupant[3/16/10].Deed Transfer recorded [20% down,$196K Chase mortage].New owner occupies home.Question-which bank can file for a deficiency judgment and when do they have to do it by?Previous owner lives in France with his family since 5/08.Will the the bank bother?How can you find out if and when a hearing might scheduled Thanks for your help
Welcome lyn,
The last bank which owned the mortgage will be able to file a deficient judgment. If the original borrower is out of the country, then the lender may not bother to claim the dues.
The last bank which owned the mortgage will be able to file a deficient judgment. If the original borrower is out of the country, then the lender may not bother to claim the dues.
I am single, work full time and am under "water " with my home in Fl. I can barely keep the payments up, I also have an equity line of credit I am paying on. I think I may have to consider foreclosing, I have just filed bankruptcy by the way, tried to save the house, but do not think I can. Should I stop paying the the equity if i do the mortage? What will happen to me? I also have an illness that will never go away and this is making it worse. Thank you.
Apologies for not being clear with regard to my question posted Tue.,
Jan. 25,2011. Although Bank of America owned the mortgage & foreclosed on 11/16/09, court records indicate the Clerk of the Court, executed and filed a Certificate of Sale on 1/20/2010 for $0 to Fannie Mae, with a Deed Transfer of Real Property to Fannie Mae on 2/9/10.
The current owner bought the house from Fannie Mae on 3/16/10 for $245K. Does that mean that Fannie Mae held the original owners Deed, Mortgage & Mortgage Note? If so, does that mean that Fannie Mae is the bank that can file for the Deficiency Judgment & not Bank of America?
How can I find out when a request for a Deficiency Hearing is filed? Since one year has passed since the sale to Fannie Mae, is it unlikely a Deficiency Judgment will be filed?
Thank you for your help.
Jan. 25,2011. Although Bank of America owned the mortgage & foreclosed on 11/16/09, court records indicate the Clerk of the Court, executed and filed a Certificate of Sale on 1/20/2010 for $0 to Fannie Mae, with a Deed Transfer of Real Property to Fannie Mae on 2/9/10.
The current owner bought the house from Fannie Mae on 3/16/10 for $245K. Does that mean that Fannie Mae held the original owners Deed, Mortgage & Mortgage Note? If so, does that mean that Fannie Mae is the bank that can file for the Deficiency Judgment & not Bank of America?
How can I find out when a request for a Deficiency Hearing is filed? Since one year has passed since the sale to Fannie Mae, is it unlikely a Deficiency Judgment will be filed?
Thank you for your help.
Hi rpod,
If you've already filed bankruptcy and got a discharge from it, then you're not responsible for paying the dues personally. The lender can foreclose the property but you won't have to pay off the dues as the loan has been discharged in your bankruptcy filing.
To lyn,
Fannie Mae is the investor for the lender whereas Bank of America was the lender. It is Bank of America who will file the deficiency judgment in order to recover the dues in full. You will receive a notice from the lender regarding the Deficiency Hearing.
Thanks
If you've already filed bankruptcy and got a discharge from it, then you're not responsible for paying the dues personally. The lender can foreclose the property but you won't have to pay off the dues as the loan has been discharged in your bankruptcy filing.
To lyn,
Fannie Mae is the investor for the lender whereas Bank of America was the lender. It is Bank of America who will file the deficiency judgment in order to recover the dues in full. You will receive a notice from the lender regarding the Deficiency Hearing.
Thanks
how can a foreclosed former owner whose current address is in europe,and not known to the bank find out if they request a hearing? since it's been 14 months since the new owner bought the house,is it likely the bank would request and file for a deficiency hearing at this time? Thanks
Hi Guest,
Normally, the lender will file deficiency judgment against the borrower immediately after the foreclosure is over. He won't wait for 14 months to file the judgment.
Normally, the lender will file deficiency judgment against the borrower immediately after the foreclosure is over. He won't wait for 14 months to file the judgment.
In Florida, can a deficiency judgement be placed during
a foreclosure even for a primary residence?
a foreclosure even for a primary residence?
I did not put my home in with bankruptcy, thought i could save it, but realize I cannot. Have 1st mortage plus equity line of credit. Can I stop paying on both then face a foreclosure, what happens to the equity line?
Hi Guest,
Deficiency judgments are allowed in Florida. Lenders can claim deficiency judgments even for a primary residence.
To R-pod,
If your properties are foreclosed, both the lenders will come after you in order to collect the balance dues.
Deficiency judgments are allowed in Florida. Lenders can claim deficiency judgments even for a primary residence.
To R-pod,
If your properties are foreclosed, both the lenders will come after you in order to collect the balance dues.
I have two properties. One is my primary. The other is some land which I have lost over 80% of its value due to like-kind foreclosures. I am thinking that there is no way I could recover the value ever. The same bank has both properties. My primary is homesteaded. Can they come after my primary because of my secondary foreclosing?
Can a deficiency judgment be dismissed in bankruptcy?