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.
My mother recently went through a foreclosure on a second property...She has no problem keeping pmts current on her principal home mortgage and credit cards...She is considering a bankruptcy filling to avoid a Deficiency Judgement...Should she wait until the bank gets the jugdement? How can she find out what is the status or if the bank did file?
welcome jct,
your mother should contact the lender and negotiate with them so that they forgive the deficient balance resulting from the foreclosure sale of the property. if the lender does not agree to it, then she can consider filing bankruptcy. she can contact a bankruptcy attorney and check out which would be best time to file it.
your mother should contact the lender and negotiate with them so that they forgive the deficient balance resulting from the foreclosure sale of the property. if the lender does not agree to it, then she can consider filing bankruptcy. she can contact a bankruptcy attorney and check out which would be best time to file it.
my property in FL was sold off in foreclosure 2yrs ago. I received a 1099a from mtg company but have not heard anything back for dificiency payment. Where can I turn to find if I will be charged the remaining balance of sale?
Hi FLPAINS,
It is your lender who will be able to let you know whether or not they will be coming after you for the remaining balance after the sale. As 2 years had passed since the sale took place, I don't think the lender will come after you for the deficient balance.
Take care
It is your lender who will be able to let you know whether or not they will be coming after you for the remaining balance after the sale. As 2 years had passed since the sale took place, I don't think the lender will come after you for the deficient balance.
Take care
Can I demand waiver of deficiency judgement if given property up for DIL? Also, in Fla, how much time does bank have to file deficiency judgement after DIL?
Hi pknative,
Your deficient balance will be forgiven by the lender in case of a deed in lieu of foreclosure (DIL). The lender won't come after you for the deficient balance.
Thanks
Your deficient balance will be forgiven by the lender in case of a deed in lieu of foreclosure (DIL). The lender won't come after you for the deficient balance.
Thanks
How much times does the lender have to file a motion for deficiency after the foreclosure sale in Florida? Is it one year or five years? Thanks
Hi chris!
Welcome to forums!
As far as I know, after a foreclosure sale in Florida, the lender has 5 years time in order to file a motion of deficiency.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As far as I know, after a foreclosure sale in Florida, the lender has 5 years time in order to file a motion of deficiency.
Feel free to ask if you've further queries.
Sussane
Hi Jess,
You and other moderators state that a lender foregoes a deficiency judgement once they accept a DIL. I just spoke to a FL bankruptcy lawyer who said that a deficiency can still be granted with a DIL. I am confused. Please explain.
You and other moderators state that a lender foregoes a deficiency judgement once they accept a DIL. I just spoke to a FL bankruptcy lawyer who said that a deficiency can still be granted with a DIL. I am confused. Please explain.
Hi Ernie,
Well... as far as I know, in case of a deed in lieu of foreclosure, the lender won't be able to come after you for recovering the deficient balance resulting from the sale of the property. This is one of the reasons why a number of people go for deed in lieu of foreclosure.
Thanks
Well... as far as I know, in case of a deed in lieu of foreclosure, the lender won't be able to come after you for recovering the deficient balance resulting from the sale of the property. This is one of the reasons why a number of people go for deed in lieu of foreclosure.
Thanks
I purchased 2 properties in FL in 2006 and had homes build on these properties with a construction loan . The builder was paid by the bank in increments as the construction progressed. The builder never completed the homes because the bank stopped paying toward the construction because my defaulting on the loan. The homes foreclosed in 2009 and 2010. Now the builder is going after the bank for the deficiency. The bank tried to have me included in the the lawsuit but the court denid that. Can the the bank come after me if they lose the case?
Hi Edwin,
As the court did not include your name in the lawsuit, I don't think the bank will be able to come after you if they lose the case.
As the court did not include your name in the lawsuit, I don't think the bank will be able to come after you if they lose the case.
Hello, thanks for the forum & the information.
I recently had to short sale my dream home. Tried,modification over a year,attorney,foreclosyre defense ets to no avail. The only way the second would sign off on the short sale was if my wife & I signed a stipulation of settlement. We did & it allows the second to file a Final Judgement. We told the lawyer we could not afford to pay the $1500 a month they wanted and he said they woukld not sign off on the short sale. We were out of money and wanted the headache gone. After reading & searching plus some bad advice we agreed. Knowing we could never afford to pay the amount. Now that we have not paid they are entering a final judgement as we new. Question is can they go after my personal posessions,bank account,wages etc....This thing keeps goingon & on. I knew afterwards I should have let them foreclose but we thought getting rid of a huge problem to one that was a third the amount was the right thing. Please help!
I recently had to short sale my dream home. Tried,modification over a year,attorney,foreclosyre defense ets to no avail. The only way the second would sign off on the short sale was if my wife & I signed a stipulation of settlement. We did & it allows the second to file a Final Judgement. We told the lawyer we could not afford to pay the $1500 a month they wanted and he said they woukld not sign off on the short sale. We were out of money and wanted the headache gone. After reading & searching plus some bad advice we agreed. Knowing we could never afford to pay the amount. Now that we have not paid they are entering a final judgement as we new. Question is can they go after my personal posessions,bank account,wages etc....This thing keeps goingon & on. I knew afterwards I should have let them foreclose but we thought getting rid of a huge problem to one that was a third the amount was the right thing. Please help!
Also will a bankruptcy in florida remove a final judgement?
Thanks in advance
Thanks in advance
Hi Guest,
If the lender gets a judgment against you, then he will be able to garnish your bank accounts or place a lien on your car or other assets. If you file bankruptcy, there are chances that you will be discharged of the debt and the judgment.
Thanks
If the lender gets a judgment against you, then he will be able to garnish your bank accounts or place a lien on your car or other assets. If you file bankruptcy, there are chances that you will be discharged of the debt and the judgment.
Thanks