Tag Archives: deficiency judgment

What YOU Need to Know About Foreclosure Deficiency Judgments

Many homeowners that contact us for help with their foreclosure action do not understand how or when a deficiency judgment applies to them. If you are “underwater” on your home and considering a short sale, offering a deed in lieu of foreclosure or defending a foreclosure action, it is imperative that you understand how deficiency judgments work because it can apply in one of these situations.

Home being sold

A deficiency is the amount that is left due and owing after your home or other property has been sold. Pursuant to the promissory note you signed, it is likely that your lender has the legal right to pursue a deficiency judgment against you because you legally obligated yourself to pay the full amount. However, whether or not the lender decides to pursue the deficiency is another matter.

We have had considerable success in defending foreclosure actions and/or reaching a settlement. We frequently are able to negotiate with a lender to waive their right to collect the deficiency. Of course, the lender does have the ability to report the cancelled debt to the IRS as potentially taxable 1099 income.

When is a lender likely to pursue a deficiency judgment? There are numerous factors that play into a lender’s decision. If there is private mortgage insurance (PMI) involved, the lender will look to the insurance company to be made whole. Insurance companies do not pay the balance of a claim if the insured has agreed to accept less, so if PMI is involved, the lender is more likely to pursue a deficiency judgment.

In Florida, a lender has one year from the date of the foreclosure sale to seek a deficiency judgment based upon the foreclosure action.

If you have questions regarding foreclosures and deficiency judgments, call the knowledgeable attorneys at Faro & Crowder to schedule a free consultation.

Contact a Brevard County Bankruptcy Attorney at Faro & Crowder, PA

If you have been served with a deficiency judgment, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

Foreclosure Deficiency Judgments in Florida

Florida has one of the highest foreclosure rates in our country. If you are facing foreclosure, it is important to be mindful that there are certain companies purchasing a large number of mortgage foreclosure judgments in the State. Once they are the owner, the company sues you for a deficiency judgment after the foreclosure of your home is finalized. Losing your home is difficult, but facing a judgment against you for a large sum of money can be devastating.

Foreclosure Deficiency Judgment | Brevard County Foreclosure Defense

There are two main steps involved in the foreclosure process. First, the mortgage lender or servicer files a foreclosure lawsuit seeking a judgment from the court granting the lender the authority to foreclosure and sell your home. This judgment may include the ability of the court to enter a deficiency judgment after completion of the foreclosure sale if the house is sold for less than the judgment amount. The deficiency balance is usually a significant sum.

Florida residents who have had their home foreclosed can obtain some relief under the “Florida Fair Foreclosure Act.” Among other things, this Act significantly reduced the statute of limitations and a creditor’s ability to pursue a deficiency judgment from five years to one year. The Act also increased the pleading requirements the plaintiff must meet in order to pursue a deficiency judgment, and it in some cases it may reduce the deficiency balance. However, because the Act makes the process move faster, it can inhibit a homeowner’s ability to investigate and discover valuable defenses. Thus, if you believe a lender will pursue a deficiency judgment against you, it is imperative to obtain legal assistance as quickly as possible.

If you are delinquent on your mortgage payments or you have a foreclosure action pending against you, contact us for a free consultation to learn how filing for bankruptcy could help. Filing a personal bankruptcy may allow you to discharge the full amount of the deficiency balance left after your home is foreclosed.

Contact a Brevard County Foreclosure Defense Attorney at Faro & Crowder, PA

If you are interested in learning more about how a deficiency judgment will affect you, contact Faro Crowder, PA to schedule an appointment. We are located in Melbourne, Florida on Sarno Road and serve residents and businesses of the Space Coast and Brevard County.

Services Areas

We provide services throughout Central Florida including: Melbourne, Titusville, Palm Bay, Merritt Island, Cocoa, Cocoa Beach, Satellite Beach, West Melbourne, Cape Canaveral, Viera and Eau Gallie.

Get In Touch with Faro & Crowder, PA

Faro & Crowder, PA
Phone: 321-784-8158
Address:
1801 N. Sarno Road, Suite 01
Melbourne, FL 32935
Email: info@farolaw.com

The information on this blog or any blog is not intended as, and should not be taken as, legal advice.

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