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 own an investment condo in Florida which is currently rented. However, the mortgage, taxes and condo fees are much more than the rent and it may go into foreclosure. My question is if the bank goes for a deficiency judgement can they touch my a. military retirement, b. my 401k, c. my Roth IRA, d. my savings/CDs, e. my wages. Thank you.
Hi skipreel!
As far as I know, military retirement, 401k and Roth IRA are protected and lenders can't place any lien on them. However I think the lenders may speak to your employer and will deduct certain amount to cover up the debt. I think, they may even place liens on savings/CDs.
Thanks,
Jerry
As far as I know, military retirement, 401k and Roth IRA are protected and lenders can't place any lien on them. However I think the lenders may speak to your employer and will deduct certain amount to cover up the debt. I think, they may even place liens on savings/CDs.
Thanks,
Jerry
How much does the PMI insure in Florida. Also, if I have a short sale can the lender and the PMI file a deficiency judgment against me?
Hi keledjian.Eileen!
The PMI charges normally depend upon the amount of down payment and loan to value ratio. This is required if you are taking the mortgage with a down payment as low as 3% or 5%.
If your property goes for a short sale, then the lender may file a deficiency judgment against you but PMI won't be able to file any deficiency judgments. Rather the lender will be able to get a certain amount of loan balance from PMI.
Thanks.
The PMI charges normally depend upon the amount of down payment and loan to value ratio. This is required if you are taking the mortgage with a down payment as low as 3% or 5%.
If your property goes for a short sale, then the lender may file a deficiency judgment against you but PMI won't be able to file any deficiency judgments. Rather the lender will be able to get a certain amount of loan balance from PMI.
Thanks.
I have the same situation as Skipreel, Florida condo that is rented for less then the monthly carrying cost ($20K/yr) If the unit goes to foreclosure and the lender gets a deficiency judgment , can a lien be placed against A) my non-military pension, B) Social Security income, C) Florida homestead property, D) cars, E) boats, F) Special Needs Trust? Thank you for your help.
Hi Lionspaw!
There are some states which exempt the pension accounts and thus the lenders are not able to place liens. As far as I know, Florida homestead properties are protected against liens. The lenders cannot place lien on these properties. Lenders can also place liens on your boat and car. As far as I know, social security income is protected against the lenders. They cannot place lien on that. As far as special needs trust is concerned, I think the lender may place a lien against it.
Thanks,
Jerry
There are some states which exempt the pension accounts and thus the lenders are not able to place liens. As far as I know, Florida homestead properties are protected against liens. The lenders cannot place lien on these properties. Lenders can also place liens on your boat and car. As far as I know, social security income is protected against the lenders. They cannot place lien on that. As far as special needs trust is concerned, I think the lender may place a lien against it.
Thanks,
Jerry
Is there a time limit from the foreclosure sale for the lender to file for a deficiency judgement. I have found one source that indicates 4 years but I can't find the statutory support. Your thoughts?
Hi Ken Stocke,
As far as I know, the time limit for filing a deficiency judgment varies within 3-4 years. However, it may vary from state to state. It will be better if you can check your state laws regarding this.
Thanks,
Jerry
As far as I know, the time limit for filing a deficiency judgment varies within 3-4 years. However, it may vary from state to state. It will be better if you can check your state laws regarding this.
Thanks,
Jerry
I had an upside down property that i made ontime payments on throughout. tried to sell the property for 6 months 50K under loan and that did not work. Asked bank for deed and lieu and got approved within 1 months. once deed in lieu was approved, i stopped making the monthly mortgage payments. the deed lieu took 6 weeks to complete its paper work with title transfered. my experian report showed the loans...20/80 to the same bank as 'charge off' and 'deed in lieu" with each having payments going 60 days past due until the deed in lieu was recorded. This got recorded on my credit report 3 months ago and my credit score only dropped 40 points.
Hi james,
A deed in lieu foreclosure lowers a borrowers credit score by 250 points. It is quite surprising that your credit score has dropped only by 40 points. But as one of your loans is showing as charged off, there are chances, that your credit score my fall further in future.
Thanks,
Jerry
A deed in lieu foreclosure lowers a borrowers credit score by 250 points. It is quite surprising that your credit score has dropped only by 40 points. But as one of your loans is showing as charged off, there are chances, that your credit score my fall further in future.
Thanks,
Jerry
hi,
i have several investmernt lot properties. i have two questions:
1, if my bank accepts a deed in leiu of foreclosure. will i be taxed by the irs for the difference? 2. what are the chances that a bank would accept a deed in lieu of foreclosure?
i have several investmernt lot properties. i have two questions:
1, if my bank accepts a deed in leiu of foreclosure. will i be taxed by the irs for the difference? 2. what are the chances that a bank would accept a deed in lieu of foreclosure?
The house my husband and I live in is being forclosed. He bought it before we married. If his name is the only one on the title and the loan and a judgement is filed can the bank go after both our assets to satisfy it. Can they take the money from our joint account?
Hi
To Psym,
If the bank accepts the deed in lieu and forgives the deficient amount resulting from the sale of the property, then you will have to pay taxes on that forgiven amount. The lender will judge your financial situation and decide whether he will accept your request for deed in lieu or not.
To Lindsay,
As your husband's name is on the property and the mortgage, then the lenders will not go after your property. Your assets will be safe as your name is not on the mortgage doc.
Thanks.
To Psym,
If the bank accepts the deed in lieu and forgives the deficient amount resulting from the sale of the property, then you will have to pay taxes on that forgiven amount. The lender will judge your financial situation and decide whether he will accept your request for deed in lieu or not.
To Lindsay,
As your husband's name is on the property and the mortgage, then the lenders will not go after your property. Your assets will be safe as your name is not on the mortgage doc.
Thanks.
Hi,
I own two properties in Orlando. One has a debt of 320k and the other 220k. I have since moved and one of my renters has vacated and the other is about to. I've had both properties on the market for more than six months and no offers. My agent says that not a single townhome has sold in my zip code. I'm in a strange position in that I make over 200k per year. Both of these mortgages are costing me approx 60k per year. If I got lucky on a short sale, I would probably be looking at 250 and 180 leaving me with a deficiency judgement of approx 110k. And thats me just guessing. Problem is, if I pay and this takes years, I could still end up being upside down and having to come to closing with 110k and add up the number of years times 60k. What should I do. I've always paid my debts and am never late. I have a great credit score, cash in the bank, no credit debt, car/boat paid off. I just don't know what is the ethical or right thing to do.
I own two properties in Orlando. One has a debt of 320k and the other 220k. I have since moved and one of my renters has vacated and the other is about to. I've had both properties on the market for more than six months and no offers. My agent says that not a single townhome has sold in my zip code. I'm in a strange position in that I make over 200k per year. Both of these mortgages are costing me approx 60k per year. If I got lucky on a short sale, I would probably be looking at 250 and 180 leaving me with a deficiency judgement of approx 110k. And thats me just guessing. Problem is, if I pay and this takes years, I could still end up being upside down and having to come to closing with 110k and add up the number of years times 60k. What should I do. I've always paid my debts and am never late. I have a great credit score, cash in the bank, no credit debt, car/boat paid off. I just don't know what is the ethical or right thing to do.
Also, on another note, I'd be happy to finance a house where I live in Fort Lauderdale ( I had to move because of work). Both of my mortgages are through Countrywide, and I see that they have tons of empty bank owned properties in Fort Lauderdale. I'd be happy to even trade up in debt if that's what it would take. Both of my townhouses are really nice and one is waterfront in an exclusive part of town. There is just no liquidity in the market. I just wish there was some way I could end up owning a home in Fort Lauderdale and not trashing my credit. One thing I'm not going to do is what I've seen others do. ie Go buy a new house and let their current ones foreclose. That seems tempting, but it seems illegal.