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.
After a short sale, the lender will have the rights to sue you for the deficient amount. He will be able to get a judgment from the court and sue you in order to recover the balance amount.
what problems can a private mortgage holder create in bankrupcy proceedings wanting payment on a deficiency judgment, stoppet by this filing-with the trustee, judge?
If you've already filed bankruptcy and if it's accepted by the court, then the private lender will not be able to take any actions against you. There will be an automatic stay on all your creditors. However, the lender can apply for the removal of automatic stay and then foreclose the property.
can a lender get a deficiency judgement if an appeal has been filed after the sale
Hi ag,
After a foreclosure sale, the lender has the rights to collect the deficient amount from you. If you are unable to pay the dues, then you will have to contact the lender and negotiate for the same. It will be the lender's discretion whether or not he would forgive the dues.
Thanks
After a foreclosure sale, the lender has the rights to collect the deficient amount from you. If you are unable to pay the dues, then you will have to contact the lender and negotiate for the same. It will be the lender's discretion whether or not he would forgive the dues.
Thanks
I had 2 mortgages for 200k each, where the 2nd was a loc. The 1st sold at auction for 150k (surprisingly) since the property was valued at 250k. The 2nd mortgage holder sent a check to the rep at the courthouse steps, but the check for 200k did not get there in time for their bid to come through.
Now the 2nd mortgage holder are coming after me for the 200k. I will claim and show proof that they messed up by not getting the check there in time and therefore forefit their right to recover. Dont they have an obligation to me to get as much as possible for the property as well?
Now the 2nd mortgage holder are coming after me for the 200k. I will claim and show proof that they messed up by not getting the check there in time and therefore forefit their right to recover. Dont they have an obligation to me to get as much as possible for the property as well?
hi gmitch,
the second mortgage lender has the rights to come after you for the loan. if you do not pay off the dues, then the lender will sell your account to collections. i would suggest you to contact them and negotiate with them in regards to a payment plan.
take care.
the second mortgage lender has the rights to come after you for the loan. if you do not pay off the dues, then the lender will sell your account to collections. i would suggest you to contact them and negotiate with them in regards to a payment plan.
take care.
my husband was previously divorced and the home was awarded to his ex wife and was quit claimed over to her. The home was not refinanced as it was put up for sale during the separation and agreed to sell it. Since then she defaulted on the association fees and took the home off the market. The association foreclosed on the home and then purchased it at auction. They were issued the certificate of title. Now the first mortgage company wants to foreclose on the home and has filed against my husband, his ex-wife and association. Didn't the association inherit the lien for the first mortgage company since they purchased the home at auction ? Everything I have read states to do research as you will be responsible for any outstanding liens on a home you purchase at courthouse auctions. Since then the association has rented the home. Currently the renters are still there. This is a Florida foreclosure.
If your husband's name is on the mortgage of the property which his ex-wife owned, then he will be responsible for the loan though the property has been sold off. The lender has the rights to sue him for the loan balance.
his divorce decree has an indemnification clause regarding liability brought on by the other party. Due to her not following the court ordered agreement she is the one who caused this liability. Will this help regarding the judgement ? What good is a property settlement agreement which is signed off by a judge ? The first mortgage company can't go after the association since they are in possession of the home ?
Welcome ml,
If the mortgage is in both names, then both of them will be liable for the payments. I don't think it will help much in case of a judgment. If a judge signs the property settlement agreement, then that agreement will come into effect. The first mortgage company has the rights to recover the dues. They can come after the borrower to get back the dues.
If the mortgage is in both names, then both of them will be liable for the payments. I don't think it will help much in case of a judgment. If a judge signs the property settlement agreement, then that agreement will come into effect. The first mortgage company has the rights to recover the dues. They can come after the borrower to get back the dues.
florida btw - bought a condo before i was married in 05, then bought a house with my wife in 09. we live in teh house and it is our homestead. the condo is about 100K upside down. has 2 mortgages on it (80/20 loan). i cant afford the condo anymore, nor do i want to pay it anyways as its just a terrible investment. question is - can they put any sort of lien on our house after its foreclosed and sold for probably 100K less than the mortgage note? also can the HOA do anythign to my current house since im not paying them either? thanks
The lender will be able to come after you for the deficiency judgment after the foreclosure sale is over. If you are unable to pay the deficient balance, then the lender will be able to place a lien on your primary property. The HOA can also file a lawsuit against you and place a lien on your property.
we refinaced our homesteaded property in the state of florida to be able to pay off debts we incurred for our attorney. subsequently we lost the lawsuit and had a judgment put against us. we filed bankruptcy after the lawsuit because we could not afford the judgment. now the attorney for the other side is trying to get any monies left over from the lawsuit. is this legal since this is homesteaded property we refinanced?
As you've filed bankruptcy, I don't think the attorney will be able to come after you for any money.