Deficiency Judgments From Attorney's Perspective
Another attorney weighs in on the issue of mortgage deficiency judgements. An attorney friend of mine who does substantial real estate litigation told me of his recent conversation with an attorney from the Law Offices of Marshall C. Watson. The Watson law firm is one of the biggest foreclosure firms in Florida. www.marshallwatson.com. Their client list includes the biggest banks and mortgage lenders, and the lawyers practice at the center of the real estate and mortgage recession. The Watson attorney stated that his firm has received no requests from its many clients to pursue deficiency judgments after mortgage foreclosure. In this attorney's opinion, a change in policy to go after personal liability for mortgage foreclosures is not on his clients' radar screens. Some cementers to this Blog have expressed the opinion that lender policy will eventually change to pursue or assign deficiency liability. We will see.
If I purchased an pre-construction investment home in Homestead Florida in 2005 for $320,000 and it is currently worth less than $180,000 it went down 140,000 in value, I owe that Bank $280 K. A RE Attorney told me that this is very common today. The home is still new. Soon I will not be able to pay for it. If I have to do a foreclose, will my negative equity increase the chance of a deficiency judgement being filed against me, or is this still really uncommon?
I have another home and do not want to have to hide my equity and or other assets for 4 years.
The decision as to whether to pursue a Deficiency Judgement depends on whether the individual has any real assets worth pursuing. In Florida, getting a defic jdgmnt is not hard, and in some cases, is almost automatic (with the amount being the only real issue to be determined). However, most Lenders, Investors, and PMI companies don't spend the $ to seek such judgements unless they have a reasonable expectation of recovery. Average Joe homeowner is not a high-percentage candidate, but real estate investors are another story. If someone has been through a completed foreclosure and owns other real estate, they should be very concerned. The statute of limitations for pursuit is generally 1 year (there are exceptions) and the judgement lien can stand for 7 years, but can be redeemed for more (in FL). The jdgmnt lien can be adjudicated to the county where your real property is located as well (even in other states). FNMA (for example) has foreclosure law firms like MCW perform asset searches in making such determinations.
I have 3 properties in Fl all currently upside down 100+ including my primary I have 100k liquid assets. What course of action would be best for me so I am not liable for the negative equity short sale or forclosure?. I had a heloc on my primary over the course of 1.5 yrs I spent the equity line on home upgrades credit card debt along with loans to family who needed my help the equity line is now 0 how do i protect what little assets i have left? Also I just had a judgement enforced by the courts can I protect my assets against this judgement please advise?
in florida, i have a first mortgage and also a 2nd and 3rd mortgage held by wachovia ... ( $45,000 + $45,000 ) ...
the loss mitigation dept. indicated that these 2nd and 3rd mortgages would be treated as consumer loans and not your normal type mortgage loans. This would give Wachovia the ability to charge off the loans in a short sale with a subsequent judgement to follow. We want to short sale the home, but they indicated they would not forgive debt, they would only release the liens.
If we signed a mortgage and a note can they now clasify these as consumer loans? This sounds like we are in a worse position regarding a deficiency because of the consumer loan classifications.
I'm wondering, would a short sale or a forclosure be better?
Any comments?
My husband lost his job in November and we are now 3 months behind on our mortgage. We had already put the property up for sale so the lender won't do anything to help us. We don't have negative equity, we just haven't been able to sell it. The lender has also indicated to me that they will come after us for all incurred costs and deficiencies. If that is true we will be looking at bankruptcy. I am trying to determine whether there is any benefit in our situation in trying to short sale the house.
As of March 2009, is it still rare for a 1st mtg or HELOC holder to pursue and try to collect a deficiency judgement?
I have a 1st and a HELOC with Wells Fargo. The foreclosure sale will occur in the next few months and in todays market the value is about 20K under the 1st mtg balance. The HELOC is 25K.
I am wondering what the odds are that either will come after me for the deficiency. I am over 60, unemployed, have no major assets, own no real estate, owe 8K on credit cards and only have about 9K in my IRA to live on. I am trying to hold on until I can collect Soc Sec next year. Should I try and negotiate a settlement on the HELOC or wait and see what they do? What is a common negotiated payoff %?
Thanks
If a bank accepts a short sale on a property and refused to place language in the approval letter specifically dealing with the deficiency issue can they still pursue a deficiency judgment and if yes what is the statue of limitation on it?
It looks as though a bank assigned their interest to a company that wants to get a deficiency judgement against my parents on their vacant lot that was foreclosed on in Florida. The defeciency judgement is for $192,000. Any thoughts or concerns or recommendations?
I'm trying to do either a short sale or deed in lieu. the bank started forclosure in court on 5/8/09. There's a PMI company involved. If the bank accepts either the short sale or deed in lieu and agree's not to pursue a defiency judgement and I just get the 1099 tax form. Can the PMI company still pursue a deficiency judgement.
If the bank of the second mortgage approves the short sale only if owner signs a deficiency letter and to make regular payments. Should the owner sign the letter only to close on the property, but doesn't have the money to pay on the deficiency, or can they refuse to sign the letter and request a 1099? These are confusing and changing times. Thank you for your response.
We recently completed a short sale with a Credit Union.
They satisfied the mortgage and note and months later sent us a notice that we need to pay the defiency.
Please let me know if this is legal.
Norma