Posted on: 12th Jan, 2010 05:10 pm
I have a friend who just got foreclosed on her home, after 1 1/2 years where she walked away from the house. The unpaid principle was 62,000, and with accrued interest and fees, the final figure is now 78,000 and a public sale is scheduled for next month (Florida). She has made no attempt to contact the mortgage holder and did not attend her scheduled hearing. If say, the auction sale is for 40,000 - is she liable for a deficiency of 38,000, or is the deficiency based of the sale price versus the current assessed value? In any case, can be take possession of her vehicle and her motorcycle, and/or garnish her wages until the deficiency is paid off? What is her recourse at this point in time. The sale is in 5 weeks.
as I understand it, your friend would still owe 38K in the above scenario. In a situation like this, the house is sold to cover the debts against it, if there is a deficiency, the remaining debt is still payable by the former owner.
He/She could discharge this debt by either liquidating other assets, or filling for CH7 bankruptcy.
He/She could discharge this debt by either liquidating other assets, or filling for CH7 bankruptcy.
Hi Guest,
Your friend will responsible for the deficiency from the foreclosure. Deficiency is the difference between the sale price and the mortgage owed on the home. Thus, your friend will be liable to pay off a deficiency of $38k, if the current mortgage balance is $78k and the home is sold at $40k.
The lender can sue your friend if she does not pay off this deficient amount. He can get a deficiency judgment against your friend and can take away her cars and other assets. He can also garnish her wages to recover the deficiency. However, she can talk with the lender and settle the deficiency for an amount less than what she actually owes.
You can also refer to the following page to know about deficiency judgments in Florida:
http://www.mortgagefit.com/florida/deficiency-judgment.html .
Your friend will responsible for the deficiency from the foreclosure. Deficiency is the difference between the sale price and the mortgage owed on the home. Thus, your friend will be liable to pay off a deficiency of $38k, if the current mortgage balance is $78k and the home is sold at $40k.
The lender can sue your friend if she does not pay off this deficient amount. He can get a deficiency judgment against your friend and can take away her cars and other assets. He can also garnish her wages to recover the deficiency. However, she can talk with the lender and settle the deficiency for an amount less than what she actually owes.
You can also refer to the following page to know about deficiency judgments in Florida:
http://www.mortgagefit.com/florida/deficiency-judgment.html .