Some Mortgage Companies May Be Planning Deficiency Attacks
The mortgage deficiency debate continues. A prominent creditor's collection attorney named Mitch Dinkin from South Florida reports by email that in the past two weeks he has been contacted by two small to mid-size mortgage lenders regarding his representation to pursue mortgage deficiency judgments. His prospective clients express an aggressive policy to go after defaulting homeowners. Mitch's opinion is that the small lenders, rather than the larger national mortgage banks, are most likely to go after deficiency awards. He explains that if the larger lenders decide to do anything with deficiency claims they would likely sell their claims as a package to collections firms.
Although we have not seen significant deficiency claims to date, if Mitch Dinkin is correct, some lenders may be adopting a more aggressive policy as foreclosures increase and bank's financial losses mount. Maybe some banks believe that they need to pursue personal judgments in order to stem the flow of homes being abandoned by people who think the mortgage company will passively accept full responsibility for the decline in their home's valuation.
posted by Jonathan Alper, asset protection and bankruptcy attorney, Orlando, Florida
Thank you for this great web site...I have one question. My husband is in forclosure on an investment property.I am not on the loan or deed.Can the bank come after me? Thank You! Gloria
Not directly. However, if you two are titleholders on other real estate property and they get a defic jdgmnt from the foreclosure, all bets are off. If such a jdgmnt lien attached to your jointly owned homestead, then there it will sit until it expires (they can't force recovery) or until you settle it. But if it's attached to investment prop or a 2nd home, liquidation/recovery efforts could be pursued.
First bank is hell bent on getting there money even if we get laid off or have wage cuts. They refused loan mods and short sale even when there was a buyers making offers. Now the deficiency judgements is agianst us and they want to take our primary residence and garnish our wages. I spoke with banks attorney and he was saying they just wanted a fraction the difference between the loan amount and what they paid for the home, but not necessarily the entire deficiency
If your second home or income property was placed in an LLC and it was done previously as to no represent fraudulent Conveyance the debtor cannot pursue a judgement or pierce the veil of the LLC. Also if a "friendly lein" is placed on the property absorbing most of the equity the first lein takes presidence over any other lein.