Mortgage Deficiency Judgments In Florida
More and more calls and emails are coming from people in trouble with investment real estate. The typical person is concerned about his personal liability and vulnerability of assets in the event one or more of his real estate investments is foreclosed by mortgage lenders. A deficiency judgment refers to a lender's judgment against the borrower for the difference between the outstanding balance of the mortgage note, plus costs and attorneys fees, and the value of the property foreclosed. The property value is determined on the date of the foreclosure sale. In Florida, a foreclosure does not automatically result in a deficient judgment. The mortgage lender has to file a motion for a deficiency after the foreclosure sale, and the court holds a separate hearing on the lender's request for deficiency liability.
The mortgage lender has to show the court evidence that the property's value was less than the note balance. The borrower has the opportunity to present his own evidence that the property value was equal to or exceeded property value. If the property was worth more than note balance on sale date the court will not give the mortgage lender a deficiency judgment against the borrower. During the real estate boom deficiency judgments were uncommon because increasing real estate values brought home values above note balances of defaulting mortgages. In the current real estate recession, we may see more lenders pursue deficiency judgments against borrowers who they believe are collectible.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
hi everyone,
I earn good money on houses located on the suburbs with little renovation.
I came to know that rehabbing can fetch me Real estate investing. This is awesome.
Jonathan,
Are most mortgages in FL nonrecourse if a deficiency judgment is not automatic?
I have a friend (really, it's not me) who has received a $40,000 1099-C from a foreclosure of a rental property. Adjusted basis is about $190,000, mortgage balance was $200,000, and the amount the lender took as full payment of the mortgage was $160,000.
Does he have a $30,000 loss? Or a $10,000 gain with $30,000 of COD income?
Thanks
i think that not fair abou to sue the borrowe fore the differetn because, bussiness is a bussiness,the borrower loss the bank should, why the bank do not avised on the new what would happen if somebody lost his or her job and the bank foreclosure and then come after the borrowe i think everybody should know about the consecuency before buy a house not after thank you the poor people become more poor and the rich(the bank ) more rich
Hi everyone,
I am in a deep problem. I mistakingly bougth 5 rental properties in fl 3 years ago. they wen vacant oct 2007 and haven't been rented since. I can not handel the negative any more but i am concerned about the deficiency. I have no assets. are the banks going to pursue the deficiency or is it better to file for bankruptcy ?
Please help me what are my options
thanks
i have the solution,dont buy anymore property,i was planning to buy one but after i read a bunch of story about people getting sue after foreclousure, i start think and i say not,is better for me to save that money keep on the bank for future economic crash thank you
I have an, and i use this term loosely, "investment property" in ft lauderdale, i live in north carolina. we are at a loss of near $60,000 including monthly loss, taxes, down payment, repairs and cannot handle the loss any longer. we are prepared to stop paying and go into foreclosure---ruining our near perfect beacon scores. with this being said, can they come after us for monies owed either from the mortgage co or the HOA???
I was told that most of the states do foreclosure throug a non-court process which will not result in deficiency dugement. But Florida is a state with judicial foreclosure. This means that lender will get a dificiency judgment after the foreclosure in FL. Can you confirm if this is ture in FL?
Thank you.
Johny
I have parents that had a piece of land foreclosed on in Florida and the bank is seeking a deficiency judgement against them. They have a home in Az and MI. What should they do to defend themselves?
I PURCHASED 2 LANDS IN FT MYERS, FL BACK IN 2006 FOR $50,000 EACH. THEY ARE WORTH BETWEEN $3500 AND $5000 NOW. IF I LET GO OF THOSE PROPERTIES (LET THE BANK FORECLOSE), CAN THE BANK COME AFTER MY CURRENT RESIDENCE, MY 401K OR GARNISH MY WAGES.
Why on earth would a bank not pursue a deficiency judgment? You are sticking them with bad debt. You gambled and lost, pay your tab. If your property value had doubled, would you be looking to reward your bank for taking you on as a risk? If you lent a neighbor 100K, and they stopped paying you back, what would you do?