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,
A friend of mine is buying a house and wants my name to be on the deed, so if something happens to him, I can continue to live there/take over the house payments, he has me 100% in his will. I was in a car crash back in 2007 and didnt have enough INS to cover the whole amount of the other persons car so i'm still paying for the rest. is it a good idea to put me on the deed with this hanging over me?
A friend of mine is buying a house and wants my name to be on the deed, so if something happens to him, I can continue to live there/take over the house payments, he has me 100% in his will. I was in a car crash back in 2007 and didnt have enough INS to cover the whole amount of the other persons car so i'm still paying for the rest. is it a good idea to put me on the deed with this hanging over me?
Hi Tonybony,
Are you sure you will be able to pay for the other person's car in near future? If you think you can make the payments and it is not going to create any problem, you can have your name added to the title. Otherwise, you can wait till the time you pay for the car. Once you have paid it off, you can add your name to the title. This is just to make sure that the no body comes after the property if you fail to pay for the car. Moreover, he has given the property to you in his will. So, in case anything happens to him, you can have the title changed in your name through probate.
Are you sure you will be able to pay for the other person's car in near future? If you think you can make the payments and it is not going to create any problem, you can have your name added to the title. Otherwise, you can wait till the time you pay for the car. Once you have paid it off, you can add your name to the title. This is just to make sure that the no body comes after the property if you fail to pay for the car. Moreover, he has given the property to you in his will. So, in case anything happens to him, you can have the title changed in your name through probate.
Thank you for your quick reply.
Yeah, i'm sure I can pay for it. I's only $7,000. less now that i've paid some on it.
just so i'm clear on what you are saying. even though there is still money owed on the property, I can still have it changed over through probate?
Yeah, i'm sure I can pay for it. I's only $7,000. less now that i've paid some on it.
just so i'm clear on what you are saying. even though there is still money owed on the property, I can still have it changed over through probate?
Is it enforceable in Canada?
I received a 1099 for the entire balance of my mortgage on a property that was foreclosed on in Dec. Can I also get hit with a deficiency judgement as well?
you can get hit with a deficiency judgement if you are not very carefull when going through the short sale or deed in lieu process. Please consult a professional company or attorney to assist you with these matters every aspect can be crucial.
I am 65 and can't afford this months mortgage, never missed a payment, sits on rented lot that has raised rent $55 a month. can't afford another payment. fully disabled & unable care for home at all. Found 1 BR apt w/assistance to care for it. Moving in the 15th and walking away, not told mortgage or landowner yet. Have SS/Retirement/Court Ordered Spousal Maintainence due to polio, which can be taken from me? Will contact Mortgage Co to req DIL in days.
My husband lost his job in Nov. 09 and we're almost 90 days past due on our mortgage. I have PMI on my loan and my mortgage company has sent me a letter letting me know of my options. If I do a deed in lieu and my lender waives the deficiency judgment, do I have to worry about the PMI coming after me for the deficiency judgment? I have no assets, only debt. Also, if I get a 1099C from my lender to file taxes can PMI still come after me if I've already filed the 1099C, however I would qualify for the debt forgiveness act that has been put in place?
jamielwilliams, If the lender waives the judgement they are doing so with approval from the pmi company. You wont have to worry about them coming after you at all. Have you thought about a modification or a short sale. I would at least attempt one of these options before handing over the property. Also I know its not the moral thing to do but right now with all the foreclosures you can probably live in the home for free for quite some time and try to save some cash. Just a thought.
Upon the seller's receiving a settlement letter in which the mortgage holder states: "Mortgagor, and/or the investor and if applicable, the mortgage insurer has agreed to accept less than the total amount due (a.k.a. Short Sale) on the above referenced account," is is still possible for the mortgage holder to come after the seller seeking a deficiency judgment?
It is unless it has a statement saying that the debt is considered settled.
Hi Bradley,
Thanks for the reply. I am trying a Modification but they only lowered my payment by 179.00 so I still cannot afford it and they said I have to make 4 mths trial payments and if I miss a payment or am short it terminates the modification process. I called a non profit counseling number and they worked up a budget for me and basically if I drop some of my other bills and they lower my payment by the 179.00, I am still short. They said that most likely they will not go any lower. Now I am getting a letter talking about Short Sale and DIL, it says the longer you wait to contact us the fewer options you will have. So I am wondering how long or how many months you have to be behind on your mortgage payment before they start to foreclose? I was told it's 90 days, if they start to foreclose does the Short Sale and DIL come off the table?
Thanks for the reply. I am trying a Modification but they only lowered my payment by 179.00 so I still cannot afford it and they said I have to make 4 mths trial payments and if I miss a payment or am short it terminates the modification process. I called a non profit counseling number and they worked up a budget for me and basically if I drop some of my other bills and they lower my payment by the 179.00, I am still short. They said that most likely they will not go any lower. Now I am getting a letter talking about Short Sale and DIL, it says the longer you wait to contact us the fewer options you will have. So I am wondering how long or how many months you have to be behind on your mortgage payment before they start to foreclose? I was told it's 90 days, if they start to foreclose does the Short Sale and DIL come off the table?
Hi jamie,
Lenders generally start foreclosure proceedings once you are delinquent on your mortgage payments for 3-4 months. If the lender initiates the foreclosure proceedings on your home, they may not accept a short sale or a deed in lieu.
If the lender is offering you the option of deed in lieu, I think you should go for it. You will at least be forgiven the deficiency. You may have to pay taxes on the forgiven debt, but if you have used the property as your primary residence, you can claim exemption from taxes as per the Mortgage Forgiveness Debt Relief Act of 2007. Moreover, it is slightly better to have a deed in lieu on your credit than a foreclosure.
Lenders generally start foreclosure proceedings once you are delinquent on your mortgage payments for 3-4 months. If the lender initiates the foreclosure proceedings on your home, they may not accept a short sale or a deed in lieu.
If the lender is offering you the option of deed in lieu, I think you should go for it. You will at least be forgiven the deficiency. You may have to pay taxes on the forgiven debt, but if you have used the property as your primary residence, you can claim exemption from taxes as per the Mortgage Forgiveness Debt Relief Act of 2007. Moreover, it is slightly better to have a deed in lieu on your credit than a foreclosure.
Just recieving a letter from Bank Of America (BOA) stating there is a defiency on the loan in the amount of $107.831.60. During my short sale process no monies were ever talked about i had a Realtor at the time according to Remax he is in the TOP 100 realtors in all florida recived awards and you would think he would have negoiated the 2nd loan for the defiency there is nothing on the HUD-1 my question through the process was will i owe either bank when and if it closes and was always told (NO) i was to trusting with my realtor because his credentials were above excellent. i am guilty of signing a letter that was thrown in the pile with no explanation in which City Title told me they explain all of the papers that the consumer signed would you not think if that was the case i would have never signed it being under stress of loosing my home that paper was slipped in the pile the day of closing as i said no monies were ever talked about in the process. My realtor told me no one knew it was there and that they have a tendency to throw things in their at the last minute and the title company says every piece of paper is explained, the piece would have surely stood out no wonder my loan was done so fast i believe that it was not done legally from all the reading i have been doing lately which i should have been reading before the sale but if you dont know then you dont know but that is what the Realtor get paid for. i need help