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!
Welcome to forums!
I can understand your frustration!! But don't be pessimistic and have some patience. Lawsuits have been filed against such scrupulous lenders and actions are being taken against them. Bank, financial institutions and lenders who have scammed common people are being punished for their follies.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
I can understand your frustration!! But don't be pessimistic and have some patience. Lawsuits have been filed against such scrupulous lenders and actions are being taken against them. Bank, financial institutions and lenders who have scammed common people are being punished for their follies.
Feel free to ask if you've further queries.
Sussane
A technical question for lawyers, specifically for FL. I've seen writeups that mention that even Homestead property is not exempt from a foreclosure deficiency judgment. Does that mean the specific home against which the foreclosure took place or does it mean any home one might own, for example, a home subsequent to the foreclosure and properly homesteaded? Perhaps simpler, must the judgment and lien relate specifically to the foreclosed property.
A comment for others worrying about certain other property, research "Tenancy by Entireties". It's for married only, though.
A comment for others worrying about certain other property, research "Tenancy by Entireties". It's for married only, though.
Welcome frank,
The lender can claim the deficiency judgment for the home which has been foreclosed. It is not mandatory that it will be the home which which has been homesteaded.
The lender can claim the deficiency judgment for the home which has been foreclosed. It is not mandatory that it will be the home which which has been homesteaded.
lender in texas - home in florida.
forecloser.
can the texas lender come after you for the deficiency?
forecloser.
can the texas lender come after you for the deficiency?
Hi BBBSSS!
Welcome to forums!
As far as I know, in Florida, the lender has 5 years time to claim deficiency judgment.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
As far as I know, in Florida, the lender has 5 years time to claim deficiency judgment.
Feel free to ask if you've further queries.
Sussane
I still have a court recorded foreclosure judgement on an investment property from a bank in Lee County from 2008. It has been lying dormant, but I worry that they might come after me with a deficiency motion at some point. I may inherit some
money and property soon.
Will I be exposed to lose my inheritance? What should I do?
money and property soon.
Will I be exposed to lose my inheritance? What should I do?
Hi Guest,
If the property is foreclosed by the lender, then you will be liable for paying off the deficient balance to the lender. If you receive an inheritance, then the lender may ask you to pay off the delinquent amount from that inheritance.
Thanks
If the property is foreclosed by the lender, then you will be liable for paying off the deficient balance to the lender. If you receive an inheritance, then the lender may ask you to pay off the delinquent amount from that inheritance.
Thanks
I am facing foreclosure on what was our homestead in Florida. The propertywas appraised at 320,000 and the mortgage is 365,000. We had a shortsale offer of 320,000 but the bank wanted us to give an additional 10,000 cash and a promisary note for 35,000 at zero interest for ten yrs. I am retire with no pension but have an IRA worth 650,000 plus social security. The IRA is subject to a minimum of 20% tax on drawing funds. I sold my life insurance policy to purchase another home which is now my homestead in Florida. I know it looks like we have money but at our age we have no means of survival except the IRA. With normal expenditures we can survive approximately ten years.My question is can they place a judgement on what is now my new hoestead in Florida. It is worth 130,000.
Hi johng,
In order to recover their debts, the lender can file a lawsuit and get a judgment against you. But if you have a homestead, then I don't think you will have to worry about the lawsuit.
Thanks
In order to recover their debts, the lender can file a lawsuit and get a judgment against you. But if you have a homestead, then I don't think you will have to worry about the lawsuit.
Thanks
i own 3 houses. the one i live in has a home equity loan. the other 2 are rentals. one has no liens or mortgage, the other rental has a mortgage. i have no assets other than the equity in the rental that's paid for. what can i expect the lender to do if i default on the mortgage on the other rental.
Hi workslave,
If you do not pay the mortgage, the lender will have the rights to foreclose the property. He will come after you in order to recover the debts. Moreover, non-payment of mortgage will also tarnish your credit.
Thanks
If you do not pay the mortgage, the lender will have the rights to foreclose the property. He will come after you in order to recover the debts. Moreover, non-payment of mortgage will also tarnish your credit.
Thanks
Is there a way other than challenging the appraisal of the property that a deficiency can be challenged ?
Hi!
Welcome to forums!
You can challenge an appraisal of the property. In order to do that, you may have to go for another appraisal which states that your property has a high value.
Feel free to ask if you've further queries.
Sussane
Welcome to forums!
You can challenge an appraisal of the property. In order to do that, you may have to go for another appraisal which states that your property has a high value.
Feel free to ask if you've further queries.
Sussane
we are trying to settle a short sale. the first lender(BofA) has offered the second (regions) $6,000 and we have offered $2,000 to settle on $28,000. the 2nd says they want us to sign a note for $11,000 or will settle for us to pay them $5,500 at closing or they will sue if we do not. can the 2nd do this and why are they being so ornary? I have never heard of a second doing this and neither has our realtor.
Hi noonecaresanymore,
The second lender has the rights to recover s debts in full. It will be your discretion whether or not you will consider that option.
Thanks,
Jerry
The second lender has the rights to recover s debts in full. It will be your discretion whether or not you will consider that option.
Thanks,
Jerry