Oppenheim Law’s most popular videos and blog posts are on the topic of deficiency judgements. So, by popular demand, we will continue to provide news and insight on this topic.
Understanding deficiencies and the Florida rules which pertain to them are key to avoid getting a deficiency judgment.
What is a Deficiency?
The unpaid mortgage debt associated with a residence is a deficiency. A bank can foreclose and force a judicial sale of a home if the mortgage borrower fails to pay the associated mortgage debt. The deficiency is the difference between the proceeds from the sale and the remaining mortgage loan balance. A deficiency can also result from a short sale, which is an alternative to foreclosure.
What are the Florida ‘Rules’ on Deficiencies?
The rules pertaining to deficiencies differ from state to state. A deficiency judgment is when the bank is granted a court order against the borrower to collect on the deficiency amount. In Florida, if the bank is successful in obtaining a deficiency judgment, it will be recorded in the public records and collectable for up to twenty years. Until the remaining debt is paid, the bank can garnish your wages, bank accounts, and even collect against your estate after you die.
However in other states, all a bank can do is foreclose on your house. Although your credit score will be lowered, in these states they can’t come after you for the deficiency.
If you live in Florida or any state where assets can be seized, it’s crucial to get ahead of the situation. So what should you do?