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 Marshall,
If you do not want to foreclose your existing property, then you can try to sell it off first. You can list the property in the market and check if you can get buyers. If selling off the townhouses are not possible, then you may rent them off so that you can get monthly payments which will help you in paying off the mortgage.
If you do not want to foreclose your existing property, then you can try to sell it off first. You can list the property in the market and check if you can get buyers. If selling off the townhouses are not possible, then you may rent them off so that you can get monthly payments which will help you in paying off the mortgage.
In Florida, how long after foreclosure does a bank have to initiate a deficiency
Hi
I don't think there are any such time limit for a bank to initiate a deficiency after foreclosure. They can do that right after the foreclosure or can do it later. It depends on them.
I don't think there are any such time limit for a bank to initiate a deficiency after foreclosure. They can do that right after the foreclosure or can do it later. It depends on them.
Florida has very strong asset protection laws.
You can protect your wages and other income streams by filing Head of household in the state. The paperwork must be done properly.
3 things are protected under law from lawsuits or judgements. Your 401k your IRA and your homesteaded property. Anything else can be hit by a charging lean. A Nevada or Delaware LLC can protect your assets if they have been setup prior to any evidence of possible lawsuit. Another words if you setup an LLC before the housing crisis as part of Estate planning and therefore no evidence that you planned this to avoid a debt the judge should rule in your favor. After 4 years an LLC is solid asset protection in the state of Florida. There are additional avenues to discourage would be creditors from attempting lawsuits. See an Asset Protection attorney if you have any doubts.
You can protect your wages and other income streams by filing Head of household in the state. The paperwork must be done properly.
3 things are protected under law from lawsuits or judgements. Your 401k your IRA and your homesteaded property. Anything else can be hit by a charging lean. A Nevada or Delaware LLC can protect your assets if they have been setup prior to any evidence of possible lawsuit. Another words if you setup an LLC before the housing crisis as part of Estate planning and therefore no evidence that you planned this to avoid a debt the judge should rule in your favor. After 4 years an LLC is solid asset protection in the state of Florida. There are additional avenues to discourage would be creditors from attempting lawsuits. See an Asset Protection attorney if you have any doubts.
If a deficiency judgement is obtained against me in FL what funds can the court take from me? Military retirement? 401K? IRA?
Thank you,
Bob
Thank you,
Bob
Hi BOB,
As far as I know they cannot put a lien on your Military account, 401k or IRA. These are protected against any lien by the law. However, they can put lien on your personal properties, real estate properties etc.
For a similar discussion you can refer to the following page:
http://www.mortgagefit.com/florida/deficiency-judgment-2.html#64358
As far as I know they cannot put a lien on your Military account, 401k or IRA. These are protected against any lien by the law. However, they can put lien on your personal properties, real estate properties etc.
For a similar discussion you can refer to the following page:
http://www.mortgagefit.com/florida/deficiency-judgment-2.html#64358
I owned a condo in Orlando who turned out to be falling apart due to numerous code violations. I was the victim of predatory lending and had to close even though my mortgage broker informed me a few hours before closing that I could not get financed, too late to get any deposit back. Of course he had one of these crappy mortgages under his sleeves and overnighted the documents to the title company, needless to say I could not read each page at closing. The title company ended up lying to me about the terms, I ended up with a prepayment penalty and an ARM. I was under pressure to sign rapidly and the answers to my key questions were lies!!!
I had no choice but to move in as I was starting a new life. When my mortgage payment doubled I tried to negotiate with the lender, that was completely worthless, I kept having contradictory information, I kept faxing the requested documents to many different reps but never got any answers, finally I was told that they would not approve a loan modification , I then faxed that I wanted to opt for the deed in lieu, they NEVER answered, I received a court judgment about the foreclosure and the unit is now for sale at a 75% less than what I owe!! my feeling is that they deliberately ignored my request for a deed in lieu so they can get back to me in a deficiency judgment.
By the way, when I bought this condo I was not told about the code violations, does anybody know if that could be in my favor as maybe the original sale is nul and void?
I recently met a girl who was selling these condos and she mentioned that they were pressured to hide things and lie about the situation....
Not being originally from the US I have to say that I am shocked by the power judges, financial institutions and mortgage companies have, I guess freedom means Lobbying!!!!
I had no choice but to move in as I was starting a new life. When my mortgage payment doubled I tried to negotiate with the lender, that was completely worthless, I kept having contradictory information, I kept faxing the requested documents to many different reps but never got any answers, finally I was told that they would not approve a loan modification , I then faxed that I wanted to opt for the deed in lieu, they NEVER answered, I received a court judgment about the foreclosure and the unit is now for sale at a 75% less than what I owe!! my feeling is that they deliberately ignored my request for a deed in lieu so they can get back to me in a deficiency judgment.
By the way, when I bought this condo I was not told about the code violations, does anybody know if that could be in my favor as maybe the original sale is nul and void?
I recently met a girl who was selling these condos and she mentioned that they were pressured to hide things and lie about the situation....
Not being originally from the US I have to say that I am shocked by the power judges, financial institutions and mortgage companies have, I guess freedom means Lobbying!!!!
Hi
It's a complete mess that you're stuck in. I think the only person who might be able to assist you is an attorney. Only he/she can guide you out of this mess. You should contact a lawyer as soon as possible.
It's a complete mess that you're stuck in. I think the only person who might be able to assist you is an attorney. Only he/she can guide you out of this mess. You should contact a lawyer as soon as possible.
What is the priority of lien holders after forclosure?
What is the priority of lien holders after forclosure?
I am 'walking away from' and investment property that has dropped nearly 3/4 in value.
I also own outright another property that I am renting out while I am living overseas. I would prefer to do a Deed-in-lieu-of for my investment property. In the event the lender accepts a DIL or goes for foreclosure and a deficiency judgement is rendered can a lien be placed on my other, owned unit, even though it was not mentioned on the mortgage for the investment property?
I also own outright another property that I am renting out while I am living overseas. I would prefer to do a Deed-in-lieu-of for my investment property. In the event the lender accepts a DIL or goes for foreclosure and a deficiency judgement is rendered can a lien be placed on my other, owned unit, even though it was not mentioned on the mortgage for the investment property?
I owe $425,000 on lot in Florida, unable to sell at listed price of $75,000. I am in foreclosure and requested dil and no deficiency judgement. They have refused to waive, yet we have set up a remediation meeting prior to foreclosure. Any suggestions on how I can negotiate a dil or avoid deficiency judgement.
My foreclosure is final--Since Nov'08 Iv stopped paying my mortage--My credit score has dropped about 100 pts. since than--now that Iv finally forecloced--will FICA drop any more and how much??
I am unemployed, have an upside down loan (2 lenders) and moving in with family. How can I avoid a deficiency judgement from the 2nd lender? I literally have nothing and I still have a son to raise (single parent). Should I pursue bankruptcy?
hi sheri,
if you fail to repay the second mortgage by selling the home, the lender can sue you for the deficiency. however, some states do have anti-deficiency laws to protect the borrower from creditors. these laws are not applicable in all situations, though. you can discuss your situation with an attorney and check out if the anti-deficiency laws in your state can help you avoid a judgment. otherwise, you will have to file a chapter 7 bankruptcy so you could be discharged from your debts.
hi kathy,
when your lender reports the foreclosure to the credit bureaus, it will surely drop your credit scores. a foreclosure generally drops your credit score almost by 250 points. the 100 points drop in your credit scores seems to be due to the fact that you've stopped making payments since november last year.
hi ross,
you can definitely negotiate with the lender and request them to forgive the deficiency. but it is entirely up to you how you negotiate with them. but with the increasing number of foreclosures, it is unlikely that the lender will forgive the entire deficiency. in that case, you can come to a settlement with them and set up a repayment plan.
if you fail to repay the second mortgage by selling the home, the lender can sue you for the deficiency. however, some states do have anti-deficiency laws to protect the borrower from creditors. these laws are not applicable in all situations, though. you can discuss your situation with an attorney and check out if the anti-deficiency laws in your state can help you avoid a judgment. otherwise, you will have to file a chapter 7 bankruptcy so you could be discharged from your debts.
hi kathy,
when your lender reports the foreclosure to the credit bureaus, it will surely drop your credit scores. a foreclosure generally drops your credit score almost by 250 points. the 100 points drop in your credit scores seems to be due to the fact that you've stopped making payments since november last year.
hi ross,
you can definitely negotiate with the lender and request them to forgive the deficiency. but it is entirely up to you how you negotiate with them. but with the increasing number of foreclosures, it is unlikely that the lender will forgive the entire deficiency. in that case, you can come to a settlement with them and set up a repayment plan.