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.
In the state of Florida can the lender of an unsecuered personal loan ganish or put a judgment on your social security payment or your parsonal retirement payment in your bank account? the loan maybe over 10 years old and I have not recived any mail or bills in over 7 years. Iam not sure it is even my loan could be my fathers. same name.
Hi ghelveston,
None of your creditors or lender can place a lien on your social security benefits or your retirement savings. This is irrespective of any state.
Thanks
None of your creditors or lender can place a lien on your social security benefits or your retirement savings. This is irrespective of any state.
Thanks
Can aFHA loan have deficiency judgement after house was sold at auction?
Hi Iluvmidog!
Welcome to the forums!
The FHA has the authority to ask the lenders to first try and recover the deficiency balance from the borrower. In case the borrower is unable to pay it, then the lender can submit the claim to the FHA.
Feel free to ask if you've further queries.
Sussane
Welcome to the forums!
The FHA has the authority to ask the lenders to first try and recover the deficiency balance from the borrower. In case the borrower is unable to pay it, then the lender can submit the claim to the FHA.
Feel free to ask if you've further queries.
Sussane
comm.deficient judgement holder can pursue borrower cash value life insurance ?tell me in detail. even on maturity or beneficiary, in case death of insured [borrower]
:(
jay patel
:(
jay patel
Hi j patel,
If the lender receives a judgment, he can place a lien on any of the properties or try to recover the dues from the cash value of your life insurance proceeds. In case of the death of the insured, he may contact the estate for the money.
Thanks
If the lender receives a judgment, he can place a lien on any of the properties or try to recover the dues from the cash value of your life insurance proceeds. In case of the death of the insured, he may contact the estate for the money.
Thanks
I short sold my house in 2011. I was sick at the time and couldn't follow the short sale process my attorney did as close as I want it. After weeks after the closing, when I received all the signed documents of the executed short sale, I realize that I didn't get the letter from the bank forgiving a deficiency judgment. They reserved the right to pursue the difference. 2 out of the 5 years banks have to pursue in FL have passed, but the stress I'm living is terrible. I am scared of generating any additional income because I don't know if the bank will come and take it all.
I had to do the short sale because in 2009 I got divorced, my ex destroyed our finances, I got sick with cancer (twice), my ex died 3 weeks after the divorce, I couldn't work anymore and I have to support myself and my 2 minor boys. I think that these are more than enough reasons for my attorney to fight with the bank until obtaining that waiver. But he didn't. My question is, is there a remote possibility in trying to get the forgiveness now, 2 years after the short sale was executed. My health condition hasn't improved much, my only income comes from the social security disability. I hope you can give me options to solve this situation. The stress this causes to me is not helping me in getting better.
Thanks in advance.
I had to do the short sale because in 2009 I got divorced, my ex destroyed our finances, I got sick with cancer (twice), my ex died 3 weeks after the divorce, I couldn't work anymore and I have to support myself and my 2 minor boys. I think that these are more than enough reasons for my attorney to fight with the bank until obtaining that waiver. But he didn't. My question is, is there a remote possibility in trying to get the forgiveness now, 2 years after the short sale was executed. My health condition hasn't improved much, my only income comes from the social security disability. I hope you can give me options to solve this situation. The stress this causes to me is not helping me in getting better.
Thanks in advance.
Hi nina,
As 2 years have already passed, I don't think that you should mess up with the matter any more. The rest 3 years will also simply pass. If you try to negotiate with the lender now, may be he will start demanding the deficient balance.
As 2 years have already passed, I don't think that you should mess up with the matter any more. The rest 3 years will also simply pass. If you try to negotiate with the lender now, may be he will start demanding the deficient balance.
accdg. to you after a foreclosure sale, the Plaintiff has to file another case for deficiency if any. Is it the same if it is a short sale?
Hi Roderick!
Welcome to the forums!
Yes, the lender can seek deficiency judgment against you. He can file a lawsuit for the same.
Feel free to ask if you've further queries.
Sussane
Welcome to the forums!
Yes, the lender can seek deficiency judgment against you. He can file a lawsuit for the same.
Feel free to ask if you've further queries.
Sussane
How can I know whether Lender has filed a deficiency judgment with court or not?
I had foreclosure case in 2009 and they auctioned my house in summer 2009. After that, I received form 1099-A in Jan 2010 for tax filling purpose. I have not received any other documents after that.
It will be 5 year soon. Can I move on with my life? The concern of deficiency judgment makes me nervous.
I had foreclosure case in 2009 and they auctioned my house in summer 2009. After that, I received form 1099-A in Jan 2010 for tax filling purpose. I have not received any other documents after that.
It will be 5 year soon. Can I move on with my life? The concern of deficiency judgment makes me nervous.