If your property was recently foreclosed, you may be surprised to find that you may still owe money on the property and that the ordeal is far from over. When a mortgage lender is unable to recover the entire loan balance after a foreclosure sale, homeowners are often still held responsible for the difference.
Whether through a short sale or foreclosure, when a property sells for less than the balance owed on the mortgage, the difference is called a deficiency. Homeowners facing foreclosure in the state of Florida should know that lenders have the legal right to file suit in order to hold borrowers accountable and recover losses. This is what is referred to as a deficiency judgment.
Though there are cases in which lending institutions wrongfully pursue deficiencies, ignoring or not responding to a deficiency judgment may only make things worse and even result in the loss of assets and garnished wages. It’s important to contact your lender and explore your options; if you make any deals (short sale, deed-in-lieu, etc.) be sure to make the release of any deficiencies part of your contract. Additionally, if your home has already been foreclosed and you are now fighting to catch up with a deficiency, bear in mind that deficiency judgments are unsecured debt; bankruptcy can help eliminate your personal liability to repay them.
Deficiency laws are complex and generally do not allow lenders or related parties to flippantly harass borrowers once a foreclosure’s taken place. If you are on the line for a deficiency judgment, don’t lose another minute; reach out to a respected foreclosure assistance organization in your community, or consult with an Attorney to help you determine the validity of the deficiency judgment and work out the best course of action for your unique situation.
Stephen K. Hachey, a Florida real estate attorney can help your wade through this process and determine a positive solution. Contact him at 866-200-4646.
The opinions in this post are solely those of the author. The author takes full responsibility for the content. Like all blog posts, this is offered for general information purposes and does not constitute legal advice.
This post was written by Stephen Hachey. Follow Stephen on Google