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.
if i let my home go back to the bank,can they come to tennessee and take my home here?prices have really dropped on property in florida it was worth
$287,000 now it is worth only $150,00
please answer
[Email address deleted as per forum rules. Thanks.]
$287,000 now it is worth only $150,00
please answer
[Email address deleted as per forum rules. Thanks.]
I foreclosed on my property 5 yrs ago, I received a 1099 from the lender but one year and an half ago I received a weird letter from a collection agency, with a different creditor's name, no reference to any loan number and an amount that does not match anything I owe. I did not answer and I have not heard from anybody so far. After the loss of my other half to cancer my family helped me buy a house cash, is that new house in danger of being seized? how do I find out if there is a defficiency judgment against me? I had lost my job due to the recession and I had one of these toxic loans. After years of depression I am trying to move on with my life and a deficiency judgment would be the end for me.
Thanks so much for your response.
Thanks so much for your response.
Welcome garrett,
In order to take your property in Tennessee or place a lien on it, the lender will have to file a lawsuit and get a judgment against you. If the lender is able to do so, then he will be able to come after your property.
To ericjouvet,
In order to place a lien on the new property, the lender will have to get a judgment against you from the courthouse. I don't think the lender will come after you now in order to recover that deficient amount. Nevertheless, have a word with a real estate attorney and take his opinion in this matter.
In order to take your property in Tennessee or place a lien on it, the lender will have to file a lawsuit and get a judgment against you. If the lender is able to do so, then he will be able to come after your property.
To ericjouvet,
In order to place a lien on the new property, the lender will have to get a judgment against you from the courthouse. I don't think the lender will come after you now in order to recover that deficient amount. Nevertheless, have a word with a real estate attorney and take his opinion in this matter.
how far can they go to collect a deficiency balance on a motor home. what property can they take from you?
Hi jlaw,
If the deficiency judgments are allowed in your state, then the lender will file a lawsuit against you and get a judgment then claim the deficiency. If they get a judgment, then they may garnish your wages or bank account or place a lien on your other properties.
Thanks
If the deficiency judgments are allowed in your state, then the lender will file a lawsuit against you and get a judgment then claim the deficiency. If they get a judgment, then they may garnish your wages or bank account or place a lien on your other properties.
Thanks
I have commercial property in Florida that is behind in payments. I've listed it and offered CA lender a dil...unsuccessful in both. I'm trying to get a prospective lessee to assume loan instead, if I can get lender to agree. i don't want to re-lease it but can lender require me to if rent would cover the payment?
The lender will come after you for a deficient balance only when you foreclose the property. If you rent the property and pay the mortgage payments on time, then you won't be liable for deficient balance.
after foreclosure do the mtg company normally contact default ownwer before judgement takes place. understand bank acct can be frozen but only funds going into it at this time are federal retirement funds. because of this can account be frozen or should i start funds be mailed to me in checks.
Hi gac,
The lender can contact the borrower for the deficient amount resulting from the foreclosure sale of the property. You can ask for the funds to be mailed to you in checks. I don't think there will be a problem in it.
The lender can contact the borrower for the deficient amount resulting from the foreclosure sale of the property. You can ask for the funds to be mailed to you in checks. I don't think there will be a problem in it.
I short saled my house with a deficiency. I got a summons for court for a deficiency judgement. What are my options? Bankruptcy?
welcome pirate,
you can pay off the deficient balance and get rid of it. then you won't have to file bankruptcy. in case, you're unable to pay off the deficiency balance, it will be a better option to contact your lender and ask him to forgive the deficient balance. in case, if this option does not work, then you can think of filing bankruptcy.
you can pay off the deficient balance and get rid of it. then you won't have to file bankruptcy. in case, you're unable to pay off the deficiency balance, it will be a better option to contact your lender and ask him to forgive the deficient balance. in case, if this option does not work, then you can think of filing bankruptcy.
Hi franco!
Welcome to forums!
It is true that short sale is one of the ways to avoid foreclosure. However, even after a short sale, you will be liable for paying the deficient balance to the lender. You can request the lender to forgive the deficient balance resulting from the sale of the property. This will help you minimize your out of pocket costs.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
It is true that short sale is one of the ways to avoid foreclosure. However, even after a short sale, you will be liable for paying the deficient balance to the lender. You can request the lender to forgive the deficient balance resulting from the sale of the property. This will help you minimize your out of pocket costs.
Feel free to ask if you've further queries.
Sussane
IS THERE A TIME LIMIT FOR THE LENDER TO FILE A DEFICIENDY JUDGMENT IN FLORIDA??
It was the unscrupulous lenders that created NO down payment mortgages, very low starting percentage rates without educating the unsuspecting borrower of the consequences.
These lenders are the ones that must be penalized, punished and not the home owner that have lost their jobs as a result of the banks false statements and blunders who have anyway been rescued by our almost bankrupt governement. Yet we the public have to pay a heavy price for the follies of others.
WHY IS NOT OUR GOVERNMENT DOING ANYTHING TO PROTECT ITS PEOPLE FROM COMPLETE DISASTER BY MAKING THE CULPRITS, BANKS, FINANCIAL INSTITUTIONS, MORTGAGE LENDERS, ETC. PAY THE PRICE OF THEIR FOLLIES? IS THIS COUNTRY FOR THE WEALTHY ONLY?
These lenders are the ones that must be penalized, punished and not the home owner that have lost their jobs as a result of the banks false statements and blunders who have anyway been rescued by our almost bankrupt governement. Yet we the public have to pay a heavy price for the follies of others.
WHY IS NOT OUR GOVERNMENT DOING ANYTHING TO PROTECT ITS PEOPLE FROM COMPLETE DISASTER BY MAKING THE CULPRITS, BANKS, FINANCIAL INSTITUTIONS, MORTGAGE LENDERS, ETC. PAY THE PRICE OF THEIR FOLLIES? IS THIS COUNTRY FOR THE WEALTHY ONLY?