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.
I have a pending sell date on my foreclosing property. How much time do I have to move once the sell date becomes active?
My husband and I has been seperated for five years. We have a home together. The only thing is the morage is in his name and the deed is in both of our name. I would to try to save my home. what must i do since the morage is in his name?
Hi,
My husband wants to walk away from our home because we are $80k under water. We have exellent credit and all our money is in my name. We have never missed a payment and technically can afford to stay, but my husband is too upset about the loss of the homes value and cannot see staying in a sinking ship. Will we definatly be hit with a deficiency judment or is it a crap shoot? We are trying a short sale, but have not had much luch and are afraid the bank will not even work with us because we are not delinquent.
My husband wants to walk away from our home because we are $80k under water. We have exellent credit and all our money is in my name. We have never missed a payment and technically can afford to stay, but my husband is too upset about the loss of the homes value and cannot see staying in a sinking ship. Will we definatly be hit with a deficiency judment or is it a crap shoot? We are trying a short sale, but have not had much luch and are afraid the bank will not even work with us because we are not delinquent.
How long does the State of Florida have to file a judgment against you if your home was foreclosed?
Hi Special Guest,
As far as I know, the timeline required to file a deficiency judgment in Florida is about 3 months. However, the lenders usually do not come after the borrower, unless the borrower has substantial amount of assets. The reason is, it involves a lot of cost on the part of the lender to pursue a deficiency judgment. Thus, they do not go after the borrower unless they hope to recover both the deficient amount and the costs involved in pursuing the judgment.
Hi momof3,
If you walk away from the property, you will be responsible for the deficiency. The lender can then sue you to recover the amount of deficiency. You can request them for a short sale. But even if the house is short sold, you will still owe the deficiency.
Are both you and your husband on the loan? In case, your husband is the only one on the mortgage, they cannot come after you for the deficiency. If both of you are on the loan, both of you will be responsible for the deficient amount. In that case, both of your credit will be hit and you will find it difficult to get a loan to purchase a new house.
As far as I know, the timeline required to file a deficiency judgment in Florida is about 3 months. However, the lenders usually do not come after the borrower, unless the borrower has substantial amount of assets. The reason is, it involves a lot of cost on the part of the lender to pursue a deficiency judgment. Thus, they do not go after the borrower unless they hope to recover both the deficient amount and the costs involved in pursuing the judgment.
Hi momof3,
If you walk away from the property, you will be responsible for the deficiency. The lender can then sue you to recover the amount of deficiency. You can request them for a short sale. But even if the house is short sold, you will still owe the deficiency.
Are both you and your husband on the loan? In case, your husband is the only one on the mortgage, they cannot come after you for the deficiency. If both of you are on the loan, both of you will be responsible for the deficient amount. In that case, both of your credit will be hit and you will find it difficult to get a loan to purchase a new house.
to mary,
it depends on your particular situation as well as your lender. you will have to vacate the property once the house is sold. you may also receive a notice of eviction from your lender specifying the amount of time you've got to leave the property. in some states, the borrower is allowed a redemption period of about 6 months. if your state laws allow a redemption period, you can stay in the property for a certain no. of days even after the foreclosure sale.
to hope,
you can refinance the current mortgage in your name. this helps you transfer the loan obligation in from your husband's name to your own name. however, it doesn't put your home at risk of foreclosure, if you do not refinance. you can simply keep paying the mortgage on time and save the house from foreclosure.
it depends on your particular situation as well as your lender. you will have to vacate the property once the house is sold. you may also receive a notice of eviction from your lender specifying the amount of time you've got to leave the property. in some states, the borrower is allowed a redemption period of about 6 months. if your state laws allow a redemption period, you can stay in the property for a certain no. of days even after the foreclosure sale.
to hope,
you can refinance the current mortgage in your name. this helps you transfer the loan obligation in from your husband's name to your own name. however, it doesn't put your home at risk of foreclosure, if you do not refinance. you can simply keep paying the mortgage on time and save the house from foreclosure.
Two in Cape Coral, $350,000 owed foreclosed at less than $100,000 and one in Jacksonville owing $800,000 and worth about $450,00 all less than two years old. Deficiency judgment started on one Cape Coral. Lost job and now on pension with out of state primary residence upside down. Is bankruptcy #7 my only option. I am just scrapping by! Thanks, Don
I have to relocate out of state or risk losing my job. My FL home is worth 125k
less than I owe; purchased for 370k with 0 down and is approx my payoff. I have a first and second mtg on the property with same lender. The market is
VERY poor and would like to know from others, what suggestions they offer?
less than I owe; purchased for 370k with 0 down and is approx my payoff. I have a first and second mtg on the property with same lender. The market is
VERY poor and would like to know from others, what suggestions they offer?
I am doing a short sale and have filed bankrupty chapter7 naming the lender and the bankfupty has been discharged. The lender says that PMI can come after me with a dificiency judgment. Is this true? Does in happened very often in Florida?
Hi Alice,
The lender has the right to recover the mortgage balance in full. If they do not get the loan amount in full, they can come after you. But since you have been discharged from Chapter 7, you no longer owe the debt. You are not personally responsible for the loan anymore. Therefore, the lender cannot come after you for the deficiency.
Hi gotta go,
If you need to relocate out of state for the purpose of employment, you must do so. Losing the job will not be a wise thing to do in this economy. In case you do not want to keep the underwater property, you can list it in the market and try and short sell it. If it does not short sell, you can request the lender to accept deed in lieu of foreclosure. In case of a deed in lieu, chances are that the deficiency could be forgiven by the lender.
The lender has the right to recover the mortgage balance in full. If they do not get the loan amount in full, they can come after you. But since you have been discharged from Chapter 7, you no longer owe the debt. You are not personally responsible for the loan anymore. Therefore, the lender cannot come after you for the deficiency.
Hi gotta go,
If you need to relocate out of state for the purpose of employment, you must do so. Losing the job will not be a wise thing to do in this economy. In case you do not want to keep the underwater property, you can list it in the market and try and short sell it. If it does not short sell, you can request the lender to accept deed in lieu of foreclosure. In case of a deed in lieu, chances are that the deficiency could be forgiven by the lender.
I have a house in FL--used to be my primary residence but now used as rental for the past year...I have reached the point where the propoerty no longer makes financial sense for me...if going through foreclosure, will they work out redemption defficency terms prior to being sued?...
Hi JB,
If the lender pursues a judicial foreclosure and your state laws allow you a redemption period, you will be entitled to your right to redeem the property. As far as the deficiency is concerned, it is likely that the lender will try and recover it from you after the foreclosure. I think if you should go for a deed in lieu of foreclosure. This will allow you the opportunity to negotiate with the lender to have the deficiency forgiven by them. It will also be less damaging on your credit than a normal foreclosure.
Thanks,
Jerry
If the lender pursues a judicial foreclosure and your state laws allow you a redemption period, you will be entitled to your right to redeem the property. As far as the deficiency is concerned, it is likely that the lender will try and recover it from you after the foreclosure. I think if you should go for a deed in lieu of foreclosure. This will allow you the opportunity to negotiate with the lender to have the deficiency forgiven by them. It will also be less damaging on your credit than a normal foreclosure.
Thanks,
Jerry
The RV market has taken a downward spiral and our motor home we bought almost 3 years ago has lost so much value. We are now upside down (almost $50,000) and can't sell it. We don't want to file bankruptcy for just this. Any suggestions? Also we can't keep it as we now can't afford it as spouse has retired and our incomes are fixed. Is repo or bankruptcy the answer or should we try to see if lienholder can suggest something.
I had a judgment put against me from a credit card that I owed in 2002 by a collection agency lawyer which they informed me would stay on my record till Feb. 2009 which it did. I thought that once it was off my record that I was not liable any longer, but now I find another collection agency lawyer has gone back to court in Oct. 2009 on behalf of the same credit card and are trying to garnish my wages. Is that legal? How long can the credit card company hold a judgment against me and could they garnish my wages as I am a single mom?
Hi smithl,
You can apply for a deed in lieu of foreclosure with your lender. Depending upon your financial situation, the lender may agree to it which will help you in selling off the property. After a deed in lieu, you'll not have to pay the balance amount to him. However, your credit would take a hit - it'll get lowered by 250 points.
Hi Guest,
If you owe the debts, the collection agency can garnish your wages though you're a single mom. If the statute of limitations is over, then the collection agency will not be able to sue you for the debts. You should contact an attorney and check out what steps you need to take in this regard.
You can apply for a deed in lieu of foreclosure with your lender. Depending upon your financial situation, the lender may agree to it which will help you in selling off the property. After a deed in lieu, you'll not have to pay the balance amount to him. However, your credit would take a hit - it'll get lowered by 250 points.
Hi Guest,
If you owe the debts, the collection agency can garnish your wages though you're a single mom. If the statute of limitations is over, then the collection agency will not be able to sue you for the debts. You should contact an attorney and check out what steps you need to take in this regard.